DECARBONIZINGBUILDINGS

Merrian Borgeson, Senior Scientist

TOP THREE DEEP DECARBONIZATION STRATEGIES: 1) CUT ENERGY USE; 2) CLEAN UP THE GRID; 3) ELECTRIFY

2

BUILDINGS MUST DO MORE THAN THEIR “SHARE” OF THE WORK

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Buildings 40% of global GHG emissions1

Need 95% building GHGs reduction from EIA baseline by 20502

0

1,000

2,000

3,000

4,000

5,000

6,000

2010 2020 2030 2040 2050

MM

T C

O2e P

er

Year

U.S. GHG Emissions NRDC Pathway to 2050

Transportation& Industry

Buildings2,000 MMT

CO2e/y

112 MMT

CO2e/y

(1) Global Alliance for Buildings and Construction, 2018 GLOBAL STATUS REPORT(2) NRDC, “America’s Clean Energy Frontier: The Pathway to a Safer Climate Future”, Sept. 2017

Game Changer: Modern Heat Pump Technology

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GHG Emissions by Type of Water Heater

(California Grid)

Brockway A., Delforge P., The Electricity Journal, Nov. 2018

Heat Pumps and High-Performance Envelopes as “Thermal Batteries”

Shed load on peak

Charge off peak

NRDC and Ecotope, ACEEE Aug. 20185

CHANGE THE CONVERSATION

The move toward all-electric buildings must start to feel inevitable.

Examples:

• All-electric preferred or required building codes in 35 local jurisdictions

• Key state leaders acknowledging that this is the future

• Understanding health implications

• Early action in every major policy forum (CPUC, CEC, legislature, CARB)

• Active stakeholder development and coalition work

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SUBSTANTIAL, SUSTAINED INCENTIVESIn California, we have successfully implemented a “finger in every pie” strategy (i.e. redirect $ that is most easily available):

• Opened EE $ for fuel substitution

• $ for HPWH from the Self-Gen Incentive Program

• Legislation to direct $200 million in GHG allocations to new programs• BUILD = $80M for NEW affordable housing

• TECH = $120M statewide market transformation program for space and water heating

• New Muni, Regional and CCA programs!

• Pushing for electric tech in the low-income programs

• Proceeding on whether to extend gas lines is now about all-electric retrofits

• Gas proceeding plans to address gas transition questions; possible $ for fuel sub?

These are good initial steps, but we need bigger $ and a long-term commitment.

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AB 841

Electrify

Schools??

IMPROVE THE ECONOMICS

Market experience + Favorable economics = Ripe for regulation!

• Upfront costs → reduced with market experience (and incentives)

• Operating costs → rate design (gas vs electric)

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Yes

in… • New construction

• Efficient buildings(solar helps too)

• Replacing heating + cooling

• Electrification-friendly electric rates

• Incentive programs

Not yet, b

ut s

oon…

• Older buildings

• Central systems

• Tiered rates

• More incentives, tax credits…

IF WE LEAVE PEOPLE BEHIND, WE WILL NOT WIN

410,500

679,259 796,249

912,102

1,166,724

1,406,245

367,706

540,053 688,081

40,759

540,971

13,104

2,083,674

89,356

271,385

5,217 0

500,000

1,000,000

1,500,000

2,000,000

Northern Coast Central Valley Southern Coast Southern Inland Northern Coast Central Valley Southern Coast Southern Inland

Single Family Large Multifamily

Resi

dent

s

Fig 18. Tenure Status: Low Income Residents of Single Family & Large Multifamily Buildings

Extremely Low Very Low Low

CA’s Low-Income Weatherization Program (LIWP)

• Funded with GHG $

• Efficiency + electrification + solar

• Slashed GHG emissions while reducing energy bills by 30 percent.

• 10,000 low-income renter households have already or will soon be upgraded

• Needs more funding! Waiting list of 18,000+ units.

CA’s San Joaquin Valley Pilots

• Utility customer $$

• All-electric conversions from propane and wood

• FREE new appliances paid for households

• Bill protection and service guarantees

• Will serve about 1,600 households

• Anticipated to save participating households about $1,500 in energy costs each year, while also slashing local air pollution and greenhouse gas emissions.

LOCK IN WINS

• Building codes

• Building performance standards

• Appliance standards (NOx regulation)

• Directly fund a significant share of the transition for housing serving low-income people

• New norms

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KEY ISSUES + CHALLENGES

• Many (but not all) markets are in the very early stage of development (few products, little experience, almost no “natural” demand)

• Electric service not sufficient in some older homes (same problem for EVs) can be expensive to upgrade panel and service to building

• Low income households and renters could get left behind without focused advocacy and attention

• Gas industry is actively working to undermine progress due business threat

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THANKS!

Merrian Borgeson

mborgeson@nrdc.org

KEY POINTS

Decarbonize through 1) efficiency, 2) clean grid, 3) electrify

Buildings are fundamental to 2050 climate targets

Heat pump technology is a game changer

Changing the conversation is a VITAL first step

Substantial, sustained incentives needed to spur demand

Policy can enable improved economics

Equity is REQUIRED for success

Lock in wins with codes, standards, and new norms

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Electric Resistance Water Heater Load Shape vs. Utility Marginal Costs

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Average of Res50Electric resistance WH

+ Uncontrolled HPWH

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Average of Res50

Average of AOS50BC

Electric resistance WH

Heat pump WH, unmanaged

+ Controlled HPWH

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Average of Res50

Average of AOS50BC

Average of AOS50OP

Electric resistance WHHeat pump WH, unmanagedHeat pump WH, managed

Most of the peak reduction value comes from EE,but significant additional load shifting value

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Average of Res50

Average of AOS50BC

Average of AOS50OP

Electric resistance WHHeat pump WH, unmanagedHeat pump WH, managed

Efficiency

Load shifting