SMUD releases a plan to eliminate greenhouse gas emissions from power supply by 2030

by Paul Ciampoli
APPA News Director
April 6, 2021

California’s Sacramento Municipal Utility District (SMUD) has released a plan to eliminate greenhouse gas emissions from its power supply by 2030.

“Our 2030 zero carbon plan is a road map with the flexibility needed to adjust to changing technology and customer preferences to completely eliminate the use of fossil fuels in our electricity production by 2030,” SMUD said in an executive summary of the plan.

“With the clean energy technology in our power supply today, we expect to be able to reduce our carbon emissions by 90%, without compromising reliability or our low rates. Eliminating the last 10% will be more challenging and will require SMUD to take bold actions and pioneer new game-changing technologies,” the utility said.

To achieve zero carbon, SMUD is focused on four main areas.

One area is natural gas generation repurposing. Eliminating greenhouse gas emissions from SMUD’s power plants is essential to reach the goal of zero carbon, SMUD said. “We’re focused on reimagining our existing generation portfolio to eliminate greenhouse gas emissions through retirement, re-tooling and using renewable fuels,” SMUD said.

“We believe our gas power plants can continue to play a vital role to support reliability without emitting greenhouse gases. By retooling two of our plants from constant operations to become more flexible peaking units, we can drastically reduce their use and carbon emissions while maintaining most of their capacity. We’re targeting operating them on biofuels such as renewable gas from landfills, biodiesel or other renewable sources when they’ll need to operate for reliability,” SMUD said.

The utility said its Campbell and McClellan gas plants are located in areas already affected by air pollution.

SMUD said modifying or retiring those plants will bring air quality benefits to these historically under-resourced communities because they’re located in areas of SMUD’s territory with some of the highest environmental sensitivity scores. “Based on our studies to date, we believe we can retire McClellan in 2024 and Campbell in 2025 and replace them with proven clean technologies.” Final decisions about the retirement of these plants will be based on additional reliability studies and discussions and engagement with the community.

A second area is proven clean technologies, which are carbon-free technologies available today, including solar, wind and geothermal energy and battery storage. “We’ll significantly expand our investments in these technologies and adjust our plan as we progress in the other three areas,” SMUD said.

Along with reimagining its natural gas power plants, SMUD said proven clean technologies are the foundation of the plan “and we expect they’ll help reduce our carbon emissions by about 90% by 2030, far exceeding the regulatory and legislative mandates in place today.”

The zero carbon plan “includes a significant increase in investments proven clean technology over the next nine years, by SMUD and our customers.”

SMUD listed the following utility-scale investments (2021-2030):

• Local solar: 1,100 to 1,500 MW
• Local battery storage: 700 to 1,100 MW
• Wind (various locations): 300 to 500 MW
• Geothermal (various locations): 100 to 220 MW

These utility-scale investment ranges are based on current and expected market conditions and costs for new technologies, “recognizing market conditions can change quickly, impacting resource availability and costs,” SMUD said.

“External market factors such as changes in California and western U.S. electricity market rules also play an important role in resource adoption, as do legislative and regulatory changes.”

If emerging technologies develop faster than expected, “we will adjust our proven clean technology strategy accordingly. Similarly, if costs for new technologies decline slower than expected or if promising research areas don’t yield the expected results, we may need to scale up our investments in other areas.”

SMUD listed the following for customer-owned adoption of solar and storage (2021-2030):

• Customer rooftop solar: 250 to 500 MW
• Customer battery storage: 50 to 250 MW

SMUD said it recognizes its customers’ investment in rooftop solar and battery technologies depend to a large extent on costs as well as overall customer sentiment about zero-carbon technologies.

“Investment estimates are based on today’s forecast of probable adoption rates and the ranges reflect the uncertainty of costs associated with these systems over the next decade,” the utility said.

“To safeguard reliability, it’s also important that SMUD maintains a diverse resource portfolio that reflects different generation technologies and geographic diversity. So, our plan includes intermittent renewable energy such as wind and solar as well as energy storage and geothermal resources that support reliability.”

A third area is new technologies and business models, which are technologies that are either currently unknown or are not ready for large-scale adoption due to price, reliability or other factors. SMUD said it will launch pilot projects and programs to test and prove new and emerging technologies and develop paths for prioritizing technology adoption and scaling.

Emerging technologies play a critical role in the plan, specifically to eliminate the remaining 10% of carbon emissions.

SMUD said it will look to emerging distributed energy resource options and large-scale new technology innovations. This includes focusing on new applications for customer-owned distributed energy resources by assessing the attractiveness, costs and reliability of emerging technologies and business models.

After launching and evaluating pilot programs and projects SMUD will evaluate, prioritize and scale the technologies and programs it expects will have the largest impact reducing carbon in its 2030 resource mix, especially in terms of short duration generation capacity.

To that end, SMUD is focused on four main areas of technology: (1) electrification; (2) education and demand flexibility; (3) virtual power plants and vehicle-to-grid technology and (4) new grid-scale technologies.

“Taken together, we expect customer-owned resources and SMUD customer-focused programs will contribute between 360 and 1,300 MW of capacity to our grid by 2030, depending on the rate of customer adoption and the success of the programs and technologies we develop.”

The fourth area is financial impact and options. “We’re focused on making sure achieving our zero carbon goal is possible at a reasonable cost that minimizes rate increases for our customers. We’ll do that by identifying savings and pursuing partnerships and grants that support the plan.”

Paul Lau, SMUD’s CEO and General Manager, discussed the plan in a recent episode of the American Public Power Association’s Public Power Now podcast.

SMUD is seeking comments on the plan by April 16 and additional details are available here.