Transforming global energy use to create a clean, prosperous, and secure low-carbon future.

Carla FrischNovember 2019

PLMA

Beneficial Electrification & Building Decarbonization – You Cant Have One Without The Other!

2

Climate change is a threat that requires immediate actionacross all economic sectors

To meet the 1.5OC warming target, global emissions must peak by 2020 and decline precipitously 50% by 2030 and to net zero by midcentury

Source: IPCC

3

As we have reduced coal use in the U.S., natural gas is a larger contributor of total GHG emissions

0

500

1,000

1,500

2,000

2,500

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Coal Natural Gas Petroleum and other liquids

Source: EIA, 2019

U.S. energy-related carbon dioxide emissions by fuelMillion metrics tons CO2

4

Power generation is the major user of natural gas in the United States, but building use is nearly equivalent to industrial applications, or 82% of electric power

Source: EIAThese 3 end uses represent 91% of natural gas consumption

9,183

7,949 7,576

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Power Generation Industry Buildings

Natural Gas Consumption by SectorU.S., Bcf, 2017

5

Carbon pollution from buildings has not been declining – we need a new approach

0

100

200

300

400

500

600

700

800

900

2010 2011 2012 2013 2014 2015 2016 2017 2018Methane combustion (natural gas) Oil Propane Methane leakage

GHG emissions by building fuelResidential and Commercial Sectors, U.S., MMT CO2e

CH4 leakage = 2.9%, 100-year GWPSource: EIA, Rhodium Group, RMI analysis

174

7864

460

6

Most home energy consumption comes from space and water heating: electrifying these two end-uses would have a large impact

Source: EIA RECS 2015

End-use consumption shares by types of U.S. homes, 2015Percentage of total consumption

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

all homes

single-family detached

single-family attached

apartments, 2-4 units

apartments, 5+ units

mobile homes

space heating water heating air conditioning lighting refrigeration all other

7

And advancements in decarbonizing the electric grid mean that heat pump electrification will reduce emissions compared to natural gas in most states

-

500

1,000

1,500

2,000

2,500

2001 2005 2009 2013 2017

Average carbon intensity of U.S. electric systemslbs/MWh, 2001-2017

Heat pump electrification becomes lower carbon than natural gas

Breakeven rangelbs/MWh

Source: emissionsindex.org; RMI analysis; Mild climate modeled for Oakland, CA; Cold climate modeled for Chicago, IL

1,150 lbs/MWhCold climate

1,650 lbs/MWhMild climate

Today, heat pump electrification is an immediate solution that will reduce emissions in most states

8

Even with partially fossil-grid today, electrification reduces emissions

EPRI: an air source heat pump powered by natural gas electricity consumes half as much energy as an efficient natural gas furnace – even when accounting for upstream electricity generation and transmission losses

Source: EPRI, “Efficient Electrification”

Source: EPRI U.S. National Electrification Assessment

9

In addition to greenhouse gas emissions, burning fossil fuels leads to indoor air pollution exceeding outdoor air quality standards

Source: Brett Singer, LBNL

NOX released by natural gas cooking indoors often exceeds EPA ambient outdoor air requirements

• Airway irritant• Exacerbates asthma and other

respiratory diseases• May cause asthma and

increase infections• Asthmatics, elderly, young

children most susceptible

In addition, there is release of ultrafine particles, PM2.5, and VOCs

NO2 >100 ppb in kitchen

10

The solutions to electrify most end-uses are available today

Induction cooking

Air or ground source heat pumps

Heat pump hot water

11

And the trend toward all-electric is growing: now, more than 25% of U.S. homes use no fossil fuels indoors

Share of all-electric homes by census region Share of all primary residences

Source: EIA RECS 2005, 2009, and 2015

1.6

3.8

4.6

19.7

Northeast

Midwest

West

South

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2005 2009 2015

Number of all-electric homes by census region Millions of homes, 2015

WESTMIDWEST

SOUTH

NORTHEAST

U.S. Average

12

$11.5$13.7

N/A$11.5

$15.1N/A

$14.3$16.6

N/A$20.9

$28.0$9.6

$13.6N/A

Standard Heat PumpNatural Gas with New AC

Natural Gas with Existing ACStandard Heat Pump

Natural Gas with New ACNatural Gas with Existing AC

Standard Heat PumpNatural Gas with New AC

Natural Gas with Existing ACHeating Oil

PropaneStandard Heat Pump

Natural Gas with New ACNatural Gas with Existing AC

Oak

land

Hou

ston

Prov

iden

ceC

hica

go

$22.9$24.2

$16.1$19.0

$21.4$15.2

$25.6$24.1

$17.9$26.9

$39.2$19.3$19.2

$12.8

Heat pumps are already cost effective for new construction, and in some cases for retrofits

Net present value of home air heating and cooling 2018

Source: Rocky Mountain Institute, The Economics of Electrifying Buildings

New Construction Retrofit

Natural Gas

Heat pumps are less expensive in new construction in a wide variety of climate zones than the natural gas alternative.

Electricity

Oil/Propane

13

Cities across the United States have committed to accelerating building electrification

Source: Building Electrification Initiative

14

These trends unlocked 180,000 jobs in 2019, and 72-84% of employers said it was 'somewhat difficult or very difficult’ to hire new employees in 2018

Source: NASEO and EFI, The 2019 U.S. Energy and Employment Report

U.S. Energy Efficiency Sector Employment by Technology2018

5.8%

6.4%

7.7%

8.8%

8.9%

Manufacturing

Professional BusinessServices

Other Services

Construction

Wholesale Trade,Distribution, and Transport

U.S. Energy Efficiency Sector Expected Employment Growth Q4 2018– Q4 2019

128,896

207,780

370,562

440,118

582,108

595,331

Renewable Heating andCooling

Other

LED, CFL, and OtherEfficient Lighting

Advanced and RecycledBuildings Materials

Traditional HVAC

ENERGY STAR Appliances,including High

Efficiency HVAC

2018 2017

15

A range of studies show end-use electrification could increase electricity demand 2x, creating new opportunities

Source: NREL Electrification Futures Study

16

Electric space heating changes the timing and magnitude of peak demand

Source: NREL Electrification Futures Study

17Source: EPRI U.S. National Electrification Assessment

18Source: EPRI U.S. National Electrification Assessment

19

Example: A flexible heat pump water heater in Hawaii could shift a majority of energy use to mid-day solar period

Source: RMI

Appendix

30

Recommended Policy Actions

Build a vision and goals for reducing greenhouse gas (GHG) emissions from buildings

Ensure new buildings are all-electric

Build the market for heat pump retrofits

Direct the Public Utilities Commissions to work with utilities for a staged transition

Assess the medical and other costs associated with burning of gas