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2020 Strategic Plan Update Board of Directors Meeting June 10, 2020 Item 3 PRESENTATION SILICON VALLEY CLEAN ENERGY

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Page 1: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

2020 Strategic Plan Update

Board of Directors Meeting

June 10, 2020

Item 3PRESENTATION

SILICON VALLEYCLEAN ENERGY

Page 2: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

SVCE Mission Statement

•providing carbon free,

•affordable and

•reliable electricity and

•innovative programs for the SVCE community

Reduce dependence on fossil fuels by

Item 3PRESENTATION

Page 3: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Adapt & Rebalance

• Cost & Risk has increased

Buying Clean Electricity is 90% of

our expenses & mostly mandatory

• But, has the greatest potential to bend the carbon curve downward

Programs are 2% of our expense & discretionary

Item 3PRESENTATION

Page 4: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Strategic Plan Updates Since Formation

2017 June –

Approved

2018 July –Revision Approved

2018 December –Revision Approved

Established 2025 & 2030 GHG

Reduction Targets and

Decarbonization Strategy

2019 June –Revision Approved

Direct Access challenges allow SVCE opportunity

to enhance product offerings

Balance procurement of

RPS resources with in-state bundled

renewables (PCC1) and out-of-state

bundled renewables (PCC2)

Achieve Investment Grade

credit rating by end of 2020

Item 3PRESENTATION

Page 5: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Discussion of Strategic Financial and Power Supply Issues In Last 12 Months

June – August 2019

• Adoption of FY2020 Budget

Sep – October 2019

• Two IRP Workshops

February 2020

• Clean Energy Procurement

• Changing Landscape & Strategic Plan plus Work Plan Update

April 2020

• Rate Update, including COVID impacts

Item 3PRESENTATION

Page 6: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Strategic Planning & Work Plan

June 2019

Board approved Strategic Plan

Sep. 2019

Board sets CEO Priorities

Sep. 2019

Board approved FY2020 Budget

Jan. 2020

SVCE Staff Work Plan for 2020

April 2020

Mid-Year Budget & Updated

Rates

2020

Q3 2020 –Update Strategic Plan and FY2021

Priorities

Sep. 2020

CEO Evaluation

Sep. 2020

Adopt Revised Strategic Plan

FY2021 Budget Adoption

Item 3PRESENTATION

Page 7: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Next Steps for a Revised Strategic Plan and Updated Work Plan

May – July

Revise Strategic Plan

• Move detailed tactics to Work Plan

PEST & SWOT Analysis

• Update Strategic Plan Document

July/August

Present to Executive

Committee at Special Meeting

August

Present Revised Strategic Plan to

Board

September

Recommend Approval of

Revised Strategic Plan

Item 3PRESENTATION

Page 8: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

REFERENCE FROM PAST PRESENTATIONS

Item 3PRESENTATION

Page 9: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Community GHG Reduction Goals

9Note: Electricity emissions calculated using annual GHG emissions accounting methodology

Item 3PRESENTATION

Page 10: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Overarching Approach

• Procure & maintain a sustainable, affordable and carbon-free power supply

• Electrify the built environment and mobility

• Promote energy efficiency & successful grid integration

Item 3PRESENTATION

A kA k

A kkiki

j kPower Supply

V

A kkEnergy Efficiency &

Grid Integrationi

ii

J

BuiltEnvironment Mobility

Page 11: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Project delays

and financing issues

due to COVID-19

SUPPLY

15% load loss for C&I

customers, excess

supply, contribution

impacts in 2H 2020

LOAD LOSS

Customer defaults,

payment issues

due to COVID-19

PAYMENTS

Potential for

additional DA

market expansion

DIRECT ACCESS

Uncertainty, Risk, and COVID-19

RESERVES

Central buyer, PG&E BK,

Transparency, PSPS,

Long-duration storage

L&R ISSUESPCIA

11

PCIA uncapped

later in 2020, 10+M

reserve call in 2021

Item 3PRESENTATION

Page 12: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

01Building up cash reserves. Remain competitive with pricing

Achieve a credit rating in 2020Manage PCIA volatility

02Created Programs department and adopted Programs Roadmap

Bend the Carbon Curve

03 Procure Carbon-Free electricityBalance procurement of RPS resourcesIRPCentral buyer legislation

04SB 237 passes. Direct Access cap is raised.

Implement customized rate options to compete with ESP’s

Acceptance of lower margins

05 PG&E BankruptcySVCE will have to adapt to the final outcome

Current State Future State (Vision)VS

CHANGING LANDSCAPE

12

Item 3PRESENTATION

Page 13: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Now Transition through 2025 2025 and beyond

Renewable & Carbon-Free Resources

Heavy reliance on existing and short-term renewable (RPS) resources

Out-of-state hydro resources

Implement long-term, additive renewable resources

Deploy strategic local renewables

Longer-term hydro contracts, both in-state and out-of-state

Additional long-term renewables

Increased deployment local renewables

Less dependence on large hydroelectricity

GHG Accounting

Resource Adequacy & Reliability

DER & Grid Innovation

13

Pathway to 2030 Item 3PRESENTATION

Page 14: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Now Transition through 2025 2025 and beyond

Renewable & Carbon-Free Resources

Heavy reliance on existing and short-term renewable (RPS) resources

Out-of-state hydro resources

Implement long-term, additive renewable resources

Deploy strategic local renewables

Longer-term hydro contracts, both in-state and out-of-state

Additional long-term renewables

Increased deployment local renewables

Less dependence on large hydroelectricity

GHG Accounting

Annual - The Climate Registry

Power Content Label (PCL) includes GHG

Annual transitioning to hourly

Evaluate cost/strategy for Carbon-Free (CF 24x7

Carbon-free 24x7 to meet community and customer specific needs

Resource Adequacy & Reliability

DER & Grid Innovation

14

Pathway to 2030 Item 3PRESENTATION

Page 15: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Now Transition through 2025 2025 and beyond

Renewable & Carbon-Free Resources

Heavy reliance on existing and short-term renewable (RPS) resources

Out-of-state hydro resources

Implement long-term, additive renewable resources

Deploy strategic local renewables

Longer-term hydro contracts, both in-state and out-of-state

Additional long-term renewables

Increased deployment local renewables

Less dependence on large hydroelectricity

GHG Accounting

Annual - The Climate Registry

Power Content Label (PCL) includes GHG

Annual transitioning to hourly

Evaluate cost/strategy for Carbon-Free (CF 24x7

Carbon-free 24x7 to meet community and customer specific needs

Resource Adequacy & Reliability

Short-term RA procurement (up to 3 years) based on rules

Short-term RAStand-alone & hybrid batteriesNatural gas tolling agreements and long-term RA purchasesDER & VPP increase

Short-term RAStand alone & hybrid batteriesReduce dependence on natural gas DER & VPP increase

DER & Grid Innovation

15

Pathway to 2030 Item 3PRESENTATION

Page 16: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Now Transition through 2025 2025 and beyond

Renewable & Carbon-Free Resources

Heavy reliance on existing and short-term renewable (RPS) resources

Out-of-state hydro resources

Implement long-term, additive renewable resources

Deploy strategic local renewables

Longer-term hydro contracts, both in-state and out-of-state

Additional long-term renewables

Increased deployment local renewables

Less dependence on large hydroelectricity

GHG Accounting

Annual - The Climate Registry

Power Content Label (PCL) includes GHG

Annual transitioning to hourly

Evaluate cost/strategy for Carbon-Free (CF 24x7

Carbon-free 24x7 to meet community and customer specific needs

Resource Adequacy & Reliability

Short-term RA procurement (up to 3 years) based on rules

Short-term RAStand-alone & hybrid batteriesNatural gas tolling agreements and long-term RA purchasesDER & VPP increase

Short-term RAStand alone & hybrid batteriesReduce dependence on natural gas DER & VPP increase

DER & Grid Innovation

Background research & stakeholder engagement; design and launch of flagship pilots

Leverage 100kW-10MWs of Demand Flexibility via flagship pilots

Leverage 10-100MWs Demand Flexibility by expanding flagship pilots into broad-based programs

16

Pathway to 2030 Item 3PRESENTATION

Page 17: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Now Transition through 2025 2025 and beyond

Renewable & Carbon-Free Resources

Heavy reliance on existing and short-term renewable (RPS) resources

Out-of-state hydro resources

Implement long-term, additive renewable resources

Deploy strategic local renewables

Longer-term hydro contracts, both in-state and out-of-state

Additional long-term renewables

Increased deployment local renewables

Less dependence on large hydroelectricity

GHG Accounting

Annual - The Climate Registry

Power Content Label (PCL) includes GHG

Annual transitioning to hourly

Evaluate cost/strategy for Carbon-Free (CF 24x7

Carbon-free 24x7 to meet community and customer specific needs

Resource Adequacy & Reliability

Short-term RA procurement (up to 3 years) based on rules

Short-term RAStand-alone & hybrid batteriesNatural gas tolling agreements and long-term RA purchasesDER & VPP increase

Short-term RAStand alone & hybrid batteriesReduce dependence on natural gas DER & VPP increase

DER & Grid Innovation

Background research & stakeholder engagement; design and launch of flagship pilots

Leverage 100kW-10MWs of Demand Flexibility via flagship pilots

Leverage 10-100MWs Demand Flexibility by expanding flagship pilots into broad-based programs

17

Pathway to 2030 Item 3PRESENTATION

Page 18: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Questions?

Item 3PRESENTATION

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Page 19: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

SVCE 2020 IRP Update

Board of Directors MeetingJune 10, 2020

1

Item 4PRESENTATION

SILICON VALLEYCLEAN ENERGY

Page 20: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

• Inform the Board of next steps required to file SVCE’s IRP compliance document

Purpose

2

Item 4PRESENTATION

SILICON VALLEYCLEAN ENERGY

Page 21: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

California’s GHG Reduction Goals are Extremely Ambitious

3

2030: 40% below 1990 levels

2050: 80% below 1990 levels

2020: Back to 1990 levels

SB 100: Renewable and carbon-free energy sources must supply 100%

of retail electricity demand by 2045Figure courtesy of California Climate Change Scoping Plan: https://ww3.arb.ca.gov/cc/scopingplan/scoping_plan_2017.pdf

Item 4PRESENTATION

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Page 22: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Electricity’s Role: 46 MMT by 2030

4Figure courtesy of California Climate Change Scoping Plan: https://ww3.arb.ca.gov/cc/scopingplan/scoping_plan_2017.pdf

2030 Statewide GHG goal: 260 Million Metric Tons (MMT) of CO2

equivalent

The electricity sector’s portion of this statewide total is

46 MMT,or 18% of allowable emissions in 2030. However, for CA to be on

track to meet the SB 100 goals in 2045, that total drops to

38 MMT.

Item 4PRESENTATION

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Page 23: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Electricity as Part of a Whole

5

Figure courtesy of the California Air Resources Board: https://ww2.arb.ca.gov/ghg-inventory-data

The electricity sector’s 46 MMT portion of the statewide 2030 GHG goal is based on its estimated

contribution to statewide emissions.

The most recent emissions inventories show electricity making up about 15% of California’s

emissions, similar to the 18% the sector is allotted in 2030.

Item 4PRESENTATION

Emissions by Economic Sect

9% • Electricity/ IN STATI

6% •Electricity24% • Industrial

8% •Agriculture

7% •Residential

Bi 5% •Commercial

41% •Transportation

424.1 MMTC02e2017 TOTAL CA EMISSIONS

SILICON VALLEYCLEAN ENERGY

Page 24: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

• Integrated Resource Planning (IRP) -ensures that the electricity sector is on track to meet its portion of California’s 2030 GHG reduction targets:• 46 MMT Scenario• 38 MMT Scenario – More Aggressive

reductions to meet 2045 Carbon-free

IRP: How We Get There

6

Item 4PRESENTATION

SILICON VALLEYCLEAN ENERGY

Page 25: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

• SVCE represents 2.3% of California’s total energy needs• SVCE received two benchmarks - maximum amount of GHG emissions

allowed in 2030

SVCE’s GHG Reduction Targets

7

46 MMT Scenario(designed to reach CA’s 2030 GHG

reduction goal)

38 MMT Scenario(designed to put CA on track for

steeper SB 100 goal in 2045)

SVCE 2030 GHG Benchmark 0.814 MMT 0.673 MMT

Item 4PRESENTATION

SILICON VALLEYCLEAN ENERGY

Page 26: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Out-of-State Wind on New Transmission

Solar

Wind

Battery Storage

Pumped Storage

While solar and battery storage dominate the new build in both scenarios, wind plays a relatively larger role in the 38 MMT scenario.

Item 4PRESENTATIONNew Generation Resources Needed by 2030 to Meet CA

Climate and Clean Energy Goals35,000

Gas Capacity NotRetained222

1,605•:£30,000 978 Shed DemandResponse

2,394

2,44225,000 9,714222Pumped Storage973

20,000Battery Storage8,873

® 15,0002 11,995 Solar

10,00011,017 Out-of-State Wind

on New Transmission3,000

5,000Wind

5,2792,837(30)

(2,016) (2,046)38 MMTScenario

46 MMTScenario(5,000)

Page 27: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

9

SVCE’s Clean Resources vs. Needs to Meet Aggressive Reductions38 MMT

ResourceCapacity Currently

Contracted for in 2030 (MW)

Aggressive Reductions -38 MMT Scenario (MW)

2-hour battery storage 28 75

4-hour battery storage 95 52

Long-duration storage 0 62

Geothermal 36 0

Solar 333 184

Wind 0 235

Biomass 0 12

Biogas 0 5

Small hydro 0 19

Large hydro 4.1 187

Focus of Future Planning & Procurement: • Long-duration storage• Wind• Hydro• Shed Demand or

Distributed Energy Resources (not shown)

Item 4PRESENTATION

SILICON VALLEYCLEAN ENERGY

Page 28: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

10

Natural Gas is Needed for Reliability • California’s existing natural gas fleet will

remain essential for grid reliability.

• Currently SVCE meets almost 100% of it’s reliability (Resource Adequacy) through natural gas power plants

• Future - SVCE’s Renewable PPAs will help meet 25-30% RA needs with Clean capacity

• Demand Response RA will play an increasing role

Data courtesy of CPUC RA Market Report, January 2020: https://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=6442463739

Item 4PRESENTATION

Capacity Resources Procured for September 2020Across all CA LSEs Participating in the Resource

Adequacy Program

AA

AA

All OtherSources40.1%

Ai

NaturalGas

59.9%

SILICON VALLEYCLEAN ENERGY

Page 29: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Balancing Conflicting Forces –Conforming Portfolios with Local Goals

11

Conforming PortfoliosStatewide planning becomes more important as California approaches aggressive GHG

reduction deadlines and must maintain grid reliability.

SVCE’s Plan/PortfoliosStatewide planning becomes more difficult as the number of load-serving entities

participating increases.

Item 4PRESENTATION

SILICON VALLEYCLEAN ENERGY

Page 30: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Portfolios You’ll See in SVCE’s IRP

CPUC Portfolio A-2030 Conforming

Portfolio

CPUC Portfolio B –SB 100 Aggressive

Conforming Portfolio

Alternative C - SVCE Current

Procurement Plan 100% Clean Annually

Alternative D - SVCE High RPS

Procurement & 100% Clean

Annually

On top of contracts SVCE has already signed, net open

position is filled with the resource ratios from the 46 MMT

scenario 2030 portfolio

On top of contracts SVCE has already signed, net open

position is filled with resource ratios from the 38 MMT scenario

2030 portfolio

50% RPS through 2025, then tracking state

requirement of 60% RPS by 2030 with a 5%

buffer for long-term PPAs; non-RPS portion of open position filled with carbon-free, non-

RPS energy.

75% RPS by 2030 and 5-15% buffer for long-

term PPA over minimum. Potential

response to increased cost and/or decreased supply of large hydro

while keeping emissions at zero on a yearly

basis.

Meets GHG Benchmark?

Yes Yes Yes Yes

Recommended Portfolio

Item 4PRESENTATION

Page 31: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

I. Executive Summary

II. Study Design

• Objectives; documentation of PowerSimmmodeling methodology, approach, and assumptions

III. Study Results

• GHG emissions; local air pollutants; cost; analyses of rate and reliability impacts

IV. Action Plan

• Planned procurement activities; potential barriers to procurement of planned resources; planning for Diablo Canyon retirement

V. Lessons Learned

Submittal – Narrative Report

13

The Action Plan will be the focus of Planning, Evaluation & Procurement for the next two years

Other: One Clean System Power Calculator (calculates GHG emissions) and set of resource templates per portfolio submitted

Item 4PRESENTATION

SILICON VALLEYCLEAN ENERGY

Page 32: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

• Seek Board Approval August 2020 of IRP/Submittal:• Conforming Plan A - 46 MMT Scenario

• Conforming Plan B - 38 MMT Scenario – Aggressive Scenario

• Alternative Plan C – Current RPS Procurement & 100% Clean Portfolio

Next Steps

14

Item 4PRESENTATION

SILICON VALLEYCLEAN ENERGY

Page 33: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Thank You

15

Item 4PRESENTATION

SILICON VALLEYCLEAN ENERGYY

0SILICON VALLEYCLEAN ENERGY

Page 34: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Clean Energy Procurement Update Execute 20-Year Power Purchase Agreement with 8Minute Solar Energy - 91 MC 8ME, LLC (“Aratina”) for Renewable Solar PV Supply (PCC1) and Energy Storage (Action)

Monica Padilla, Director of Power Resources

June 10, 2020

Item 5PRESENTATION

Page 35: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Spring 2019 Request for Proposals

2

Issued Joint RFP

Shortlist & Exclusivity

Agreements

Evaluate, Scoring, Rank & Analyze

Negotiation of PPAs –Terms &

Conditions

April 2019 May - July 2019 July – August 2019 September 2019 - now

• Goals & Requirements• RPS Eligible Resources • Contract for Minimum of 10% of SVCE’s needs • Meet Long-term RPS procurement mandate for CP #4 26% • Diversify technology, location and suppliers• Contract start date no later than January 1, 2023

• Jan 2020: Approved Ormat Geothermal• Mar 2020: Approved Coso Geothermal• April 2020: Approved Rabbitbrush Solar + Storage• May 2020: Approved NextEra Yellow Pine Solar + Storage• June 2020: Seeking Approval of Aratina Solar + Storage

Item 5PRESENTATION

Page 36: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

3

2019 RFP Implementation Update

Project/ Technology ~ % of Annual load

Term (years)

Status

1 Ormat Geothermal 1.4% 10 Executed2 Coso Geothermal 9.6% 15 Executed

3 Rabbitbrush Solar+Storage 3.0% 15 Executed

4NextEra Yellow Pine

Solar+Storage4.0% 20 Executed

5 Aratina Solar+Storage 6.6% 20 Pending Approval6 Solar+Storage 1.4% 15 TBD

Total % of Annual Retail Sales

26%

Item 5PRESENTATION

Page 37: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

AratinaParent Company/

Counterparty 8Minute Solar Energy (8ME)/ 91 MC 8ME, LLC

1 Product New Solar plus Battery Storage

Bucket 1 (PCC1) Renewable Energy w/Resource Adequacy

2 Project Name Aratina Solar Center 1B

3 Expected Delivery Term 20 years June 30, 2023 through June 29, 2043

4 Location Kern County, CA

5 Average Annual Contract Capacity 80 MW Solar Photovoltaic (PV)

20 MW Battery (3-hour discharge duration)

6 Percentage of Retail Load Served 6.6% annually

7 Contract Price Structure Fixed price ($/MWh) for PV plus fixed battery capacity

payment ($ per kW-month). No escalator. Total amount not-to-exceed $174,000,000

Item 5PRESENTATION

Page 38: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Compliance with State MandateCompliance Period → 2021-2024 2025-2027 2028-2030

1. State Mandated RPS per Compliance Period - % of Retail Sales

40% 50% 57%

2. State Mandated % of Mandated RPS (Row #1) to be Contracted Under RPS Long-term Contracts 65% 65% 65%

3. State Mandated

Retail Sales % with Long-term Contracts (Row 2 * Row 1) 26% 33% 37%

4. SVCE Compliance with (Row #3): CURRENT 23% 29% 27%

5. SVCE Compliance with (Row #3): PROPOSED w/Aratina 25% 36% 33%

Item 5PRESENTATION

Page 39: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

6

2019 RFP ImplementationOverall Annual & Nominal Cost

Project/ Technology

~ % of Retail load served

Term (years)

Lifetime Nominal

contract Cost NTE (M$)

% of Annual Supply Cost

Expected Board date

Ormat Geothermal 1.4% 10 $43 2% Jan-20Coso Geothermal 9.6% 15 $331 11% Mar-20

Rabbitbrush Solar + Storage 3.0% 15 $64 2% Apr-20

NextEra Yellow PineSolar + Storage 4.0% 20 $128 2% May-20

Aratina Solar+Storage 6.6% 20 $174 3% Jun-20

Solar + Storage 1.4% 15 $35 1% TBD

Total 26% $775 20%

2020 Joint RFO – Proposals due June 15, 2020

Item 5PRESENTATION

Page 40: 2020 Strategic Plan Update · Revised Strategic Plan Item 3 PRESENTATION. REFERENCE FROM PAST PRESENTATIONS Item 3 PRESENTATION. Community GHG Reduction Goals 9 Note: Electricity

Counterparty & Project Technology LocationTerm

(years)

Expected On-line Date

Capacity MW

Battery MW

% of Annual Retail Sales

Lifetime NTE $M

Board Action

RE Slate AmendedSolar + Storage (4 hrs) Kings Cnty, CA 17 Jun-21 93.0 46.5 7% $198 Oct-18

EDF Big Beau Solar + Storage (4hrs) Kings Cnty, CA 20 Dec-21 70.4 22 6% $196 Oct-18

Ormat Casa Diablo Binary Geothermal Mono Cnty, CA 10 Dec-21 7.0 1% $43 Feb-20Coso Geothermal Geothermal Inyo Cnty, CA 15 Jan-22 43.8 10% $331 Mar-20

First Solar RabbitbrushSolar + Storage (2.5 hrs) Kern County, CA 15 Jun-22 40.0 8 3% $64 Apr-20

Nextera Yellow PineSolar + Storage (4 hrs)

Clark County, NV 20 Dec-22 50.0 26 4% $128 May-20

8ME AratinaSolar + Storage (3 hrs) Kern County, CA 20 Jun-23 80.0 20 7% $174 Jun-20

Total 384.2 37% $1,134

Total Long-term Clean (RPS) Energy & Storage Resources

333 MW of New Solar w/123 MW of BESS & 51 MW of Geothermal

New 2020 Joint RFO – Proposals due June 15, 2020

Item 5PRESENTATION

SILICON VALLEYCLEAN ENERGY

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Request - AratinaAuthorize the Chief Executive Officer (CEO) to Execute Power Purchase Agreement (PPA) with 91 MC 8 ME, LLC in substantial form and any necessary ancillary agreements and documents with the following key terms:

• 80 MW of Solar photovoltaic (PV) supply with 20 MW of energy storage qualifying as Portfolio Category Content One (PCC1) renewable resource;

• 20-Year term power delivery – expected June 30, 2023 to June 29, 2043; and

• Total amount not-to-exceed $174,000,000.

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SILICON VALLEYCLEAN ENERGY

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Questions?

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i

SILICON VALLEYCLEAN ENERGY

iV'

I

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Resilience RFP UpdateJune 10, 2020

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Background• On Nov 5, four public agencies

jointly released RFP to support community resilience in response to PSPS events

• RFP to spur >30MW of batteries at homes and businesses

• Batteries form a “virtual power plant” to provide grid services when not in use for back-up power

• Received 19 proposals and 36 unique bids

• Evaluation criteria: pricing, experience, go-to-market plan

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Current Status • Entered into contract negotiations with 2

vendors: Enel X (C&I) & Sunrun (residential)

• Carrying out data analysis to refine customer segmentation, go-to-market plan, and bid price/volume

• Contract pro forma just received mid-May, resulting in delay in start of contract negotiations (all LSEs collaborating on contract form)

• Strong desire to move quickly, to install systems in advance of the peak of this year’s fire season, capitalize on higher federal incentive levels & deliver RA

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Staff Proposal

• Delegate authority to the Executive Committee to review and approve contracts with Sunrun and Enel X for RA from customer-sited storage systems that also provide community resilience

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SILICON VALLEYCLEAN ENERGY

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Decarb & Grid Innovation Programs Update

June 2020

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The “Programs Team”

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All SVCE staff make critical contributions to program design, development and implementation.

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Community GHG Reduction Goals

3Note: Electricity emissions calculated using annual GHG emissions accounting methodology

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Overarching Approach

• Procure & maintain a sustainable, affordable and carbon-free power supply

• Electrify the built environment and mobility

• Promote energy efficiency & successful grid integration

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C&I Clean Power Offerings

2021-012021-022021-032021-042021-052021-062021-072021-082021-092021-102021-112021-122022-012022-022022-032022-042022-052022-062022-072022-082022-092022-102022-112022-122023-012023-022023-032023-042023-052023-062023-072023-082023-092023-102023-112023-122024-012024-022024-032024-042024-052024-062024-072024-082024-092024-102024-112024-122025-012025-022025-032025-042025-052025-062025-072025-082025-092025-102025-112025-122026-012026-022026-032026-042026-052026-062026-072026-082026-092026-102026-112026-122027-012027-022027-032027-042027-052027-062027-072027-082027-092027-102027-112027-122028-012028-022028-032028-042028-052028-062028-072028-082028-092028-102028-112028-122029-012029-022029-032029-042029-052029-062029-072029-082029-092029-102029-112029-122030-012030-022030-032030-042030-052030-062030-072030-082030-092030-102030-112030-12

EVENING

Load matches carbon-free energy supply

Surplus of carbon-free energy

2027 2028 2029 2030

MIDNIGHT

2023 2024 2025 2026

MORNING

NOON

AFTERNOON

2021 2022

Deficit of carbon-free energy

In discussions with customers on three new offerings:

• EcoInvestment Discount

• GreenPrime Direct

• GreenPrime 24x7Example Analysis: 24x7 Carbon-Free 'Heat Map' by Hour and Month, 2021-30

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SVCE Community Building Stock Emissions

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Units: Metric Tons CO2

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The All-Electric “FutureFit” Home

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Reach Codes

• 9 of 13 member agencies adopted reach codes

• 3 agencies currently considering

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“FutureFit” CommunityItem 7PRESENTATION

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“FutureFit” Community

Virtual Power Plant

Power Grid= “FutureFit” Home

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VPP Pilot Roadmap

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VPP Pilot Roadmap

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Pilot 1: Solar+storage for capacity & resilienceTimeline: Summer 2020 launch

• Responsive to PG&E power shut-offs & customer desire to enhance resilience

• Arrangement:

• SVCE pays for capacity from solar+storage aggregation

• Capacity payment helps buy down system cost for end customer

• Customer can use battery for back-up during grid shut-offs

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VPP Pilot Roadmap

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Pilot 2: EV telematic smart chargingTimeline: Fall 2020 launch

• EV adoption in SVCE territory one of the highest in the nation & an important anchor load

• Arrangement:

• SVCE pays license fee to ev.energy for smart charging platform

• Customer charging optimized to lower bills, emissions

• Managed community charging saves supply costs, emissions

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Pilot concepts under consideration:

• Managed heat pump water heater fleet

• Whole-home connected community

• Comprehensive VPP platform agnostic to aggregator & end use

VPP Pilot Roadmap

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EV Infrastructure Ecosystem

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Regional Collaboration

Education and Technical Support

Incentives

Awards for Best Practices

Pilot Projects

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EV Infrastructure Ecosystem

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Regional Collaboration Highlight

• Quarterly meetings launched December 2019

• Growing stakeholder group

• Identifying and resolving barriers like long/confusing permitting or interconnection processes

• Jointly working to bring new funding to region

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EV Infrastructure Ecosystem

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Education and Technical Support Highlight

• Concierge support for multifamily and small/medium businesses – includes local gov't

• Interest list now open!

• Full launch in August

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eHub

New SVCE website to inspire, educate and enable customer adoption of all-electric living

• Electric vehicles

• Electric home appliances

• Solar + storage

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Data Analytics @SVCE

Note: Mock data shown

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Analyzing Equity in Service

Establishing Tools

Performing Analysis

Improving Processes

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Analyzing Equity in Service

CalEnviroScreen Disadvantaged Communities (DACS)

SocioEconomic Vulnerability Index (SEVI)

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Thank you! Questions?

Please note that regular programs updates are also included in the monthly CEO report & on a quarterly basis as an informational update to the Board.

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