California Formalizes Big Energy Efficiency Step - Now the Hard Work Begins

The state's climate leaders gathered today for the signing of climate action legislation that will bolster California's efforts to clean our air and save Californians even more money and energy through improved energy efficiency.

The Clean Energy and Pollution Reduction Act of 2015 (Senate Bill 350) authored by Senate Pro Tem Kevin de León and Senator Mark Leno, includes numerous provisions to ensure California has the cleanest mix of energy possible by 2030, such as doubling energy efficiency achievements across the economy, reaching 50 percent renewable energy resources, and ramping up the number of vehicles on the road that drive on clean electricity rather than petroleum.

This legislation puts into law key goals that Governor Jerry Brown announced at his inaugural address earlier this year and clarifies the amount of energy efficiency savings we need to reach the goal of doubling energy efficiency. Just last month (based on the most up-to-date information we had at the time), our report - California's Golden Energy Efficiency Opportunity: Ramping Up Success to Save Billions and Meet Climate Goals - estimated a slightly higher target than what is in the legislation. But the fact remains we have a lot of work to do to get there.

Some of the numbers that follow might make your eyes cross, but they are really important for how we plan our energy future and ensure we are using energy smarter to avoid the pollution and waste that occurs when we use fossil fuel-fired power plants to keep our gadgets powered and houses warm rather than rely on energy efficiency. In sum:

  • The new law requires a doubling of energy efficiency based on the 2014 approved demand forecast for California energy use and the publicly owned utilities' energy-saving targets (updated in their 2015 energy efficiency status report), which will yield nearly 89,000 gigawatt-hours of electricity savings and more than 1,300 million therms (MMth) of natural gas savings (based on the most recent natural gas forecast) over the next 15 years.
  • These savings are equal to the amount of electricity needed to serve all of the 2013 households in California or the amount of electricity required to brew about 5 trillion cups of coffee annually (that's 400 cups per Californian per day) - and equals the amount of natural gas required to provide about 13 billion hot showers every year.
  • Reaching the goal of doubling our efficiency is also expected to meet more than 25 percent of our expected electricity demand and 10 percent of our natural gas demand in 2030 (based on the 2014 demand forecast projections extended out to 2030).
  • California's projected electricity demand in 2030 - after accounting for the doubling of energy efficiency - is expected to be 10 percent lower than all of the state's 2014 electricity consumption.
  • While electric vehicle deployment will likely increase electricity demand by at least 14,000 GWh, that is only about one-seventh of the expected electricity savings from SB 350, ensuring that Californians will still receive substantial benefits (like increased comfort and lower bills) from doubling our energy efficiency savings by 2030 while also avoiding paying for more costly gasoline at the pump.

This is undoubtedly another great milestone in California's history books to scale up clean energy and support a growing economy. But to make sure that these goals are achieved, the state needs to address the issues that have been standing in the way of expanding clean energy. This includes making sure we are confident in our energy-saving achievements, being strategic about where and when we target efficiency programs to minimize the need to spend money on steel in the ground and wires to keep the electricity flowing, and enabling innovative efficiency programs and ways that efficiency can compete with other energy options (like renewables or storage) to meet energy needs. See our report for a full list of our recommendations.

While the challenge is significant, California has the benefit of strong leadership from the legislature in passing SB 350, the California Energy Commission with the adoption of California's Existing Buildings Energy Efficiency Action Plan, and the California Public Utilities Commission setting forth a new plan for ongoing energy efficiency program planning, relying more on local energy resources, and challenging the utilities to provide comprehensive plans for how they serve customers' needs.

Now is the time for decision-makers, advocates, and other stakeholders to work together, coordinate efforts across the state, and be thoughtful about how to successfully implement policy and programmatic changes to reach the goals in SB 350. Making the law a reality will help ensure that all Californians breathe cleaner air, save money on their energy bills, and help continue to grow the state's clean energy economy.