STUDY RESULTS
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Additionally, more users relying on clean fuels for decarbonization will result in overall increased demand for those fuels. Therefore, the investment needed to catalyze and grow the market to produce clean fuels – e.g., investment in carbon sequestration and electrolysis – could scale more rapidly in a High Carbon Sequestration or High Clean Fuels where there are assumed to be more fuels consumers in 2050, as compared to a Resilient Electrification case, where it is presumed that energy consumers can electrify. Because costs of a clean fuels network are more widely shared with high modeled demand, there is potential for increased investment to rapidly scale clean fuels. Consequently, the High Clean Fuels and High Carbon Sequestration scenarios are rated as green in the evaluation matrix above (Ex. 3.1), with the Resilient Electrification scenario rated as yellow specifically for the hard-to-abate sectors.
3.3 Customer conversion challenges As decarbonization progresses, large scale energy transitions will likely require changes to many customers’ homes and businesses – such as enhanced insulation, more energy efficient appliances, and fuel-switching from natural gas appliances to electric and/or hydrogen equipment. Some of these changes could be driven by customer choice, to technologies that are more cost effective, or that better support their lifestyle or business. Some of these changes will be driven by policy – local, state, or federal, accompanied by conversion costs. Customer conversion challenges present prospective disruptions that could be experienced in homes or businesses to align their on-premise appliances and equipment to operate on the available energy sources for their particular premise. For example, this could include industrial customers switching to hydrogen-fueled processes (such as in the High Clean Fuels scenario), or installing carbon capture technologies (such as in the High Carbon Sequestration scenario), or necessary upgrades in homes and businesses to accommodate higher electric load (such as in the Resilient Electrification scenario). Managing this conversion is one of the most substantial implementation challenges associated with decarbonizing California’s economy. The Resilient Electrification scenario assumes levels of electrification that may result in higher customer conversion challenges, as 100% of residential and commercial appliance and equipment sales are assumed to be electric by 2035, compared to 50% in the High Clean Fuels and High Carbon Sequestration scenarios. While some customers may be able to convert to full electric, achieving 100% electric sales by 2035 will entail transitioning all buildings with the requisite electric supply and distribution capabilities.
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