new building electrification & natural gas bans
TRANSCRIPT
Richard Meyer
Managing Director
Energy Markets, Analysis, and Standards
December 7, 2020
New Building Electrification & Natural Gas Bans
The American Gas Association (AGA) represents companies delivering
natural gas safely, reliably, and in an environmentally responsible way to
help improve the quality of life for their customers every day. AGA’s mission
is to provide clear value to its membership and serve as the indispensable,
leading voice and facilitator on its behalf in promoting the safe, reliable, and
efficient delivery of natural gas to homes and businesses across the nation.
Committed to utilizing America’s abundant, domestic, affordable
and clean natural gas to help meet the nation’s energy and
environmental needs.
A look at the residential heating market
Natural gas is the primary source for
heating in homes
Residential natural gas use accounts
for only 4% of U.S. greenhouse gas
emission
57.7
40.9
10.8
Natural Gas Electric Propane and FuelOil
US Heating Systems by Fuel(Millions of Housing Units)
Residential natural gas
consumption plus share of
methane4%
Residential electricity CO2 plus share of methane
10%
Remaining GHG86%
EPA Inventory of Greenhouse Gas Emissions & Sinks 2019, data for 2017
Residential gas methane share based on gas consumption
Residential electricity methane share based on gas for electricity consumption & residential electricity sales, EIA
Department of Energy: Natural gas is the lowest-cost residential energy source
Source: U.S. Department of Energy, Energy Conservation Program for Consumer Products: Representative Average Unit Costs of Energy
Gas remains the most affordable way to heat a home
Source: AGA Analysis Comparison of Energy Use, Operating Costs, and Carbon Dioxide Emissions of Home Appliances
The natural gas system delivers a tremendous scale of energy on days homes and businesses need it most.
1,739 TBtu
766 TBtu
WINTER (JANUARY 2014) SUMMER (JULY 2011)
US Residential Monthly Winter & Summer Energy Consumption, Top Months 2010-2016
Source: EIA Monthly Energy Review
• Winter requires much
more energy than
summer
• Must evaluate peakenergy requirements
7
• Will policy-driven residential electrification actually reduce greenhouse gas emissions?
• How will policy-driven residential electrification impact natural gas utility customers?
• What would be the impacts on the power sector and on electric transmission infrastructure requirements?
• What would be the overall cost of policy-driven residential electrification?
• How do the costs compare to other approaches to reduce emissions?
• How will energy reliability and resilience be affected?
• What are the effects on the local economy, including jobs, wages, and tax revenues?
Key Questions
➢Incremental generation capacity requirements and transmission system upgrade costs$155 to $426 billion
➢Overall US GHG emissions reduced by1% to 1.5%
➢Total cost of policy-driven residential electrification$1,060 to $1,420 per year per converted household increase in energy costs
➢Cost of carbon dioxide emissions reductions:$572 to $806 per ton
Key Findings
https://www.aga.org/research/reports/implications-of-policy-driven-residential-electrification/
Emerging Gas Technologies
Can Make Substantial and Cost-effective
Contributions to GHG Reduction
Goals
Two studies by the American Gas Foundation
Key Findings
1. Highly efficient, emerging
direct use technologies could
reduce natural gas CO2
emissions by 40% in residential
sector by 2050
2. Identified an RNG resource
potential equivalent to the 95%
of current residential natural
gas use with the majority of
RNG to cost between $7-$20
per MMBtu.
Deployment of advanced natural gas technologies and
renewable natural gas resources provide
cost-effective pathways to emissions reduction.
Richard MeyerManaging Director,
Energy Markets, Analysis, and Standards
202.824.7134
@richardmeyerdc
The American Gas Association, founded in
1918, represents more than 200 local energy
companies that deliver clean natural gas
throughout the United States. There are more
than 74 million residential, commercial and
industrial natural gas customers in the U.S., of
which 95 percent — more than 71 million
customers — receive their gas from AGA
members. Today, natural gas meets more than
one-fourth of the United States' energy needs.
www.aga.org
TrueBlueNaturalGas.org
AGA_naturalgas
naturalgas
aga_natgas
Proposals to reduce greenhouse gas emissions take many forms
Studies may assume
electrification of
building energy
loads to be a
pathway to
decarbonization
Illustration of Energy Delivery of an Electric Heat Pump and Natural Gas Furnace
Electrifying the entire residential sector could nearly
double the US electric grid’s peak hourly demand
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Historical Winter PeakElectric Demand
Residential Gas Load Potential Peak ElectricDemand
Incremental Peak Demand Growth
Impact of 100% Electrification of Residential Natural Gas
Peak Winter Hourly Demand (GW)
Costs associated with a widespread policy-driven approach to electrifying residential space & water heat
615
145
319
107
1,186
-
200
400
600
800
1,000
1,200
1,400
$2
01
6 B
illio
ns
Total Cost of Renewables-Only Case by Sector
$1,990
$910
$510
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Average U.S. Annual Costs Per Converted Customer
Incremental Power and Tx Costs
Incremental Direct Consumer Costs
Average Energy Costs Before Elec.
71% Increase
Source: Implications of Policy-Driven Residential Electrification, 2018
Costs do not include
• Local electricity distribution upgrades
• Impact to electric or gas rates
• Fixed costs shifted to gas distribution customers remaining on the system
Source: Implications of Policy-Driven Electrification of Residential Gas Use, AGA, July 2018
Policy-driven residential electrification would be a more
expensive approach to greenhouse gas reduction
relative to many of the other options being considered.
Comparison of Cost Ranges
for Greenhouse Gas
Emissions by Reduction Mechanism