Climate Neutrality by 2025: Pathways to Fulfilling the UC President’s Initiative

1. Climate Neutrality by 2025: Pathways to Fulfilling the UC President’s Initiative California Higher Education Sustainability Conference Nick Balistreri 6/17/14

2. Carbon Footprint from Purchased Utilities ~78% of natural gas use is for on-site cogeneration Total UC Purchase Utilities Emissions: ~1.19 million/year (2012)

3. What is UC’s Motivation? • Presidential Initiative and Policy • Respond to students, faculty and staff concerns on climate change • Modify operations to address scientific findings of UC researchers • Act on behalf of California and its citizens • All ten UC campuses have signed the American College & University Presidents’ Climate Commitment to become carbon neutral • Economics • Control and manage future energy cost while reducing carbon emissions • Leadership • Demonstrate leadership through accomplishing the State’s key objective

4. UC Program Fundamentals • Develop a long-term vision & strategy • Utilize institutional longevity • Exploit UC’s financial strength and scale • Use economies of scale through wholesale purchasing • Determine value of “owning & controlling” energy assets vs. “offtake” agreements

5. Our Solution Climate Neutral by 2025 Off campus Renewable & Carbon Free Electrical Supply Large-Scale Biomethane Development Off-Campus Electrical Supply BiomethaneDevelopment On-Campus Demand Transition from natural gas to biomethane to fuel UC’s efficient electrical plant facilities Invest in energy efficiency and renewable generation to reduce campus load Enter the wholesale electrical market to control our supply On campus Energy Efficiency and Renewables

6. Energy Efficiency – Emission Reductions Primarily Due to Statewide Energy Partnership

7. Energy Efficiency – Cost Progression of Reducing Carbon Emissions

8. Wholesale Electricity – Multi-Step Process • First Step • UC to become Energy Service Provider; and • Serve load currently under direct access (~6 facilities) • Go live target is January 2015 • Next Step • Expand program by either: • Make case to become “wholesale customer” status (desired outcome), or; • “Carve out” legislation UC for additional direct access load (current IOU bundled accounts) First Step

9. Wholesale Electricity – First Step • Formed a Governing Board and procurement plan • UC is now registered as a ESP with all three IOUs • Selected “Schedule Coordinator” (public entity – The Energy Authority - TEA) • TEA is currently implementing their systems in conjunction with UC • In progress with a Power Purchase Agreement for renewable electricity supply

10. Biomethane – UC’s Drivers • The majority of UC’s carbon footprint is due to natural gas • The majority of UC natural gas use is to feed campus cogens • Biomethane is the only means that we have identified to reduce this significant portion of UC’s carbon footprint • It is anticipated both carbon and natural gas prices will rise from current low positions

11. Biomethane – Background Information • VERY LIMITED SUPPLY OF BIOMETHANE • There are three different ways you can place a value to biomethane – and they all produce different economics • In all three methods there is “regulatory risk” • Biogas developers will sell to highest cost off-taker (which typically excludes UC) • UC has unsuccessfully negotiated with several developers in the past • The biogas activity is starting to increase (what window of opportunity we had is quickly going away)

12. Achieving Climate Neutrality • Slow at first with big push toward the later years • Finding projects • Initiating process • Stakeholder buy-in • Building trust • Economic changes • Technological changes • UC will need some offsets to reduce its carbon footprint