Our Low-Carbon Approach
At Sempra Energy, our business strategy is influenced by the fact that lower-carbon sources of energy are playing an increasingly important role in the world. We believe that natural gas, energy-efficiency, renewable energy such as solar and wind, and technological innovation will be the key pieces of this low-carbon future. We understand the special responsibility we have to deliver reliable energy while reducing our emissions. In fact, our plan is to invest nearly $15 billion from 2011—2015 to bring cleaner energy to market.
Natural Gas
Natural gas is widely available today (see story below) and according to the U.S. Environmental Protection Agency, produces approximately 50 percent fewer carbon emissions than coal. As more intermittent renewable sources of power such as solar and wind are added to the nation’s energy mix, we believe natural gas will serve as the clean, round-the-clock generating fuel of choice.
Industry Issue: Hydraulic Fracturing
Hydraulic fracturing is the process of using pressurized fluid to fracture rock formations and extract natural gas or oil. The use of hydraulic fracturing has expanded in recent years, attracting considerable attention in media and public policy circles.
Sempra Energy’s business units focus primarily on the storage, transportation and distribution of natural gas. On a limited basis, one of our business units has utilized hydraulic fracturing as the most efficient method to enhance storage field performance and service to customers.
We support the establishment of rules and regulations to ensure that all producers are operating to an appropriate standard – one that protects consumers and preserves our nation’s access to an abundant domestic supply of energy. Safe and reliable extraction, storage, transportation and delivery of natural gas to consumers must remain the first priority for all natural gas industry participants.
Our business units are engaged in nearly the entire natural gas supply chain including liquefied natural gas receipt terminals; storage, transportation and distribution; and natural gas-fired power generation.
LNG
Our Sempra LNG business unit operates two LNG receipt terminals in North America: one in Baja California, Mexico and one along the U.S. Gulf Coast in Hackberry, Louisiana. Together, the two terminals are capable of receiving, storing and re-gasifying enough LNG to produce 2.5 billion cubic feet of natural gas per day. About two-thirds of the capacity of these terminals is contracted through 2029. To learn more, click HERE.
Planning for Severe Weather
The Gulf of Mexico is an area that can be drastically affected by hurricanes and flooding. This risk has impacted everything from facility design and operations, to emergency planning and business resumption procedures.
Our LNG facilities are built to meet or exceed the most stringent national and international safety standards, which include full containment storage tanks, multiple gas detectors, infrared fire detectors, closed-circuit cameras, stringent security measures and advanced safety training. Our equipment-design specifications are rigorously reviewed to protect operational integrity. For example, our full-containment, top-loading storage tanks have a 9 percent nickel-steel inner tank that is surrounded by a steel-lined, reinforced outer concrete tank for added safety.
Gas Storage, Transportation and Distribution
In 2010, our Sempra Pipelines & Storage business unit acquired pipeline and gas infrastructure assets in northern Mexico, complementing our other gas infrastructure assets in this growing region. This business unit also added 12.5 billion cubic feet of natural gas storage through its new Mississippi Hub gas storage facility and its Bay Gas facility, doubling its storage capacity.
Our business unit SoCalGas safely operates more than 100,000 miles of natural gas pipelines and four active natural gas storage facilities in Southern California.
Electricity from Natural Gas
Our business units’ five natural gas-fired power plants have a maximum generating capacity of more than 3,000 megawatts of power, employing the latest clean-burning technologies to keep emissions low. In 2010, 19 million megawatt-hours of energy were generated from natural gas at our business units Sempra Generation and SDG&E. This same amount of energy generated using coal instead of natural gas would have produced about 9,600 more metric tons of CO2, according to the U.S. Environmental Protection Agency.
Back to Top [↑]Energy-efficiency
The State of California – where our two largest utilities operate – has been promoting energy-efficiency for more than 30 years. As a result, the state’s per capita electricity usage has remained nearly unchanged while it has increased in the rest of United States by about 50 percent. California’s success with energy-efficiency stems from smart decisions made by state utility regulators to “decouple” utility profits from the amount of energy used by utility customers. Under this policy, rather than earning profits based on increased sales of electricity or natural gas, utilities receive incentives for developing efficient energy infrastructure and encouraging energy conservation.
Each year our California utilities – SDG&E® and SoCalGas® – provide millions of dollars in rebates and incentives to encourage consumers and businesses to implement energy-efficiency programs. These programs have helped customers save nearly 480 million therms of natural gas and 4.3 million megawatt-hours of electricity since 1990. This has resulted in net savings to our customers of more than $1.2 billion and saved enough energy to supply nearly 1.8 million homes for a year.
Energy Savings Assistance Program
Through the Energy Savings Assistance Program, SDG&E installed energy-saving weather stripping and made other improvements to one customer’s home:
“My home was cold and drafty and the work you did made my home more comfortable and warm. I have not had to use my heater as much because my home is no longer cold and drafty. It was easy to participate in the program and everyone was so friendly and helpful. This program was a gift from heaven for an 87-year-old woman who needed help. It arrived, thanks to my prayers.”
-Phyllis Nollet, National City, CA
Another customer received assistance from SoCalGas:
“I recently went through some tough times financially and thanks to SoCalGas and the CARE program, they were able to give me some relief on my monthly bill. I am grateful for the assistance that we’ve received because we can now make our budget.”
-Gwendolyn Allen, Antelope Valley, CA
Nursery Shows How To “Do Right” With Energy-Efficiency
Dudley Davis, owner of Do Right’s Plant Growers in Santa Paula, California, has a “do right” attitude toward all things green – including energy-efficiency. His nursery saves more than $33,000 per year in energy costs because of investments it made in energy-efficient equipment. While some nurseries have infrared film or greenhouse heat curtains, Do Right’s has both. In another energy-efficiency move, Davis bought four high-efficiency boilers that provide hot water that circulates around his plants through a system of pipes. SoCalGas has provided the nursery with more than $34,000 in energy-efficiency rebates and a $100,000 loan at 0 percent interest. “I’ve been running this nursery for 30 years and I never got a deal like that,” Davis says. The loan, offered through the On Bill Financing Program, helped Davis pay for his greenhouse heat curtains. “The loan allowed me to buy a lot more of the curtains,” he says. “My energy savings basically cover the loan payment.”
Through the On Bill Financing Program, our California utilities SoCalGas and SDG&E provide five-year, interest-free loans to eligible commercial and government customers that participate in energy-efficiency rebate or incentive programs. The loans range from $100,000 to $1 million and are calculated so the monthly loan installment is offset by the energy savings. Since 2007, more than 800 retrofits have been completed with another 200 in the queue totaling approximately $27 million.
Energy-Efficiency Pays Off Big For Company
In May of 2010, Teradata Corporation, an information technology company, received a $250,000 incentive check for its aggressive energy-efficiency program. Teradata worked closely with our SDG&E business unit’s customer service team to identify different ways to conserve energy. The company reduced its energy use by replacing older servers and storage systems, eliminating or replacing energy-consuming monitors, replacing more than 4,000 fluorescent lamps with high-efficiency lamps and installing more efficient heating and cooling systems. As a result of these conservation efforts, Teradata saves 2.5 million kilowatt-hours of energy annually—enough to power more than 200 homes for one year.
The Sustainable Communities Program (see story below) integrates energy resources, such as solar, into innovative, highly energy-efficient, sustainable buiding projects.
Sustainable Communities
There are now 25 Sustainable Communities projects across the San Diego region providing locally generated renewable energy to the community. These systems generate enough energy at peak production to supply more than 1,900 homes with electricity, eliminating more than 2,800 metric tons of carbon emissions annually.
San Diego’s nonprofit Urban Corps provides job training and educational opportunities to young adults, with a focus on the fields of conservation, recycling and community service. Through its Sustainable Communities Program, SDG&E collaborated with Urban Corps to create an energy-efficient campus, which features an SDG&E-owned solar system, rooftop garden, recycling center and sustainable car wash facility that captures and filters water for reuse. The campus is also home to SDG&E’s first “SDG&E Sustainable Experience” kiosk. This kiosk is a touch-screen exhibit that provides information on the facility’s green features, monitors solar production and educates visitors about energy-efficiency, green buildings and renewable energy.
Education is also an important part of our energy-efficiency efforts. More than 40,000 people attended energy-efficiency educational seminars, workshops and expos at SoCalGas’ Energy Resource Center. In 2010, SDG&E announced the construction of its Energy Innovation Center which will provide a similar service in the San Diego area beginning in the latter half of 2011.
Back to Top [↑]Renewable Power
Our low-carbon approach includes targeted investments by our business units in renewable power generation – such as wind and solar – and in the transmission infrastructure (see story below) needed to deliver it to customers.
Update on the Sunrise Powerlink®
Producing renewable energy isn’t enough. Energy companies must be able to deliver it where it is needed. After nearly five years of study and planning, construction began on SDG&E’s 117-mile Sunrise Powerlink electric transmission line. The nearly $1.9 billion project – the largest in SDG&E’s history – will be capable of delivering up to 1,000 megawatts of renewable energy from the Imperial Valley and Baja California to where it is needed. It also creates up to 500 construction jobs. The project received the last of its major regulatory approvals in July of 2010, and construction began later in the year, with a scheduled completion date of mid-2012. When the power line is completed, it will provide a critical new pathway for solar, wind and geothermal energy to reach customers.
With policymakers raising renewable energy requirements nationwide, our business unit Sempra Generation has become a major developer of solar and wind power (see story below). Sempra Generation plans to develop 1,000 megawatts of renewable energy over the next five years with the potential of adding an additional 1,750 megawatts.
Major Developer of Solar and Wind Power
In 2010, our Sempra Generation business unit worked to meet the growing demand for renewable energy resources. They:
- completed construction of the 48-megawatt Copper Mountain Solar in Nevada, the largest photovoltaic solar plant in the United States;
- continued the permitting process for Auwahi Wind, a 21-megawatt wind farm in Maui, Hawaii, where operations are scheduled to begin in 2012;
- continued the permitting process for Energía Sierra Juárez®, a proposed wind project with the potential to produce up to 1,200 megawatts of clean power. The first 156 megawatts, enough to power up to 65,000 homes*, are scheduled to come online in 2013;
- continued permitting for Mesquite Solar, a photovoltaic solar energy generation facility in Arizona that will produce up to 700 megawatts of clean energy. The 150-megawatt first phase, scheduled for completion in 2013, could power up to 56,000 homes*;
- received permits for the construction of Rosamond Solar in California’s Antelope Valley, a facility that could generate up to 300 megawatts of power; and
- invested in Cedar Creek 2, a 250-megawatt wind farm in Colorado. Construction of the facility was completed in 2011.
*The number of megawatts per home varies depending on the location and type of the power generating plant.
Under California’s Global Warming Solutions Act, the state must reduce its greenhouse gas emissions to 1990 levels by 2020. To help accomplish this, the California Renewable Portfolio Standard required state utilities to obtain 20 percent of their electricity from renewable sources by 2010. Our SDG&E business unit complied with this requirement in 2010 through a combination of renewable energy deliveries (11.9 percent) and flexible compliance (8.1 percent). Flexible compliance allows utilities to withdraw renewable resources from the existing bank of past renewable energy purchases – or to earmark the future deliveries of already-executed renewable energy purchases to a given year. In 2010, SDG&E signed five renewable contracts for an additional 1.6 million megawatt hours per year of renewable electricity.
As part of its continuing commitment (see story below) to expand the use of renewable energy, SDG&E executed 14 renewable contracts from January through August 2011, adding 1,250 megawatts of capacity to its portfolio. Based on these and other executed contracts, SDG&E is close to meeting the 20 percent average required in 2011–2013 and above the 25 percent required in 2016.
SDG&E’S Local Solar Initiative
SDG&E is also working to increase the amount of renewable energy produced in its service territory through the local solar initiative. The initiative, which provides for 100 megawatts of photovoltaic solar energy within the SDG&E service territory, received regulatory approval in 2010. Under the initiative, 26 megawatts of utility-owned generation will be built on existing SDG&E property, while the remaining 74 megawatts will be purchased from independent power producers. The initiative could more than double the approximately 90 megawatts of solar power that was generated in the utility’s service territory in 2010.
Increasing Renewable Energy in California
In 2008 SDG&E was the first utility in the continental United States to voluntarily commit to obtaining 33 percent of its customers’ power from renewable sources by 2020. SDG&E has increased the percent of retail sales of renewable energy from less than 1 percent in 2002 to nearly 12 percent in 2010.
Back to Top [↑]
Renewable Contracts Signed In 2010
| Project Name | Counterparty/ Developer Name |
Technology | Location | Capacity (MW) |
Generation (GWh/year) |
|---|---|---|---|---|---|
| Calpine Geysers | Calpine Energy Services, L.P. (Calpine Corporation) |
Geothermal | Sonoma and Lake Counties, CA | 25 | 212 |
| CELLC 7.5 MW Tehachapi | Coram Energy, LLC | Wind | Kern County, CA | 7.5 | 27 |
| CSolar IV South | CSolar IV South, LLC (Tenaska Solar Ventures) |
Solar photovoltaic | Imperial County, CA | 130 | 306 |
| Centinela Solar Energy | Centinela Solar Energy, LLC (LS Power Associates, L.P.) |
Solar photovoltaic | Imperial County, CA | 125 | 278 |
| Centinela Solar Energy (expansion) |
Centinela Solar Energy, LLC (LS Power Associates, L.P.) |
Solar photovoltaic | Imperial County, CA | 30 | 65 |
Innovation
The energy industry is in the midst of a period of significant transformation. It seems that every day there are new developments in renewable energy, lighting, equipment, electric vehicles and smart appliances. Ensuring that our customers can take full advantage of these changes will be essential to our continued success.
Smart Meters
With smart meters and a smart grid, customers will know what their electricity costs as they use it. They will also know how the costs change throughout the day. The result will be more customer control and knowledge, greater grid reliability and a cleaner energy mix. An additional environmental benefit comes from the reduction in miles driven by meter readers.
SDG&E is working today to transform the power grid into an intelligent system (see story below) of smart meters and communications sensors. SDG&E has replaced nearly all of its customers’ 2.3 million gas and electric meters with smart meters. For the electric meters, time-variant pricing options will provide the necessary tools and services so that customers can better understand and manage their energy use.
Ever Heard of a Microgrid?
Our business unit SDG&E received $7.5 million from the Department of Energy and $3 million from the California Energy Commission to develop a microgrid demonstration project. These funds are being used to implement a pilot program of sensors and communications and control equipment in Borrego Springs, California to provide clean, energy-efficient and cost-effective operation of the electric grid.
The project will help guide SDG&E’s Smart Grid efforts.
Project Highlights:
- Incorporate solar power generators on homes and small businesses
- Coordinate new peak load management technology
- Improve overall power quality
- Integrate and remotely control distributed generation storage devices to allow access to electricity in emergencies
In 2010, our SoCalGas business unit received state regulatory approval for its $1 billion advanced metering program and will start retrofitting its customers’ nearly 6 million meters with wireless communications devices in 2012.
Innovations in Renewables
Our business unit SDG&E tests, showcases and commercializes new technologies that can help meet renewable energy goals and reduce environmental impacts. In 2010, SDG&E installed two new solar power technologies at our El Cajon, California, operations center to help us determine how they would perform in a real-world application and to assess their potential on a utility scale.
- The PowerDish™, built by Infinia, is a mirrored disc, 15 feet in diameter, that concentrates and focuses the sun’s energy onto a compact Stirling engine that converts energy into electricity. Each PowerDish produces up to 3,000 watts of electricity, enough to power a typical home.
- Concentrator Photovoltaic Technology, built by SolFocus, uses a reflective optical system to concentrate sunlight 650 times onto very high-efficiency photovoltaic cells. The rectangular system is 24 feet wide, 18 feet tall and is capable of generating 8,400 watts, enough to power three typical homes.
These type of projects are crucial to research and development—and ultimately, the commercialization of innovative new technologies.
Alternative Fuel Vehicles
Given that nearly one-third of the greenhouse gas emissions in the United States come from transportation, vehicles that run on natural gas and electricity (see stories below) can be instrumental in improving the environment and enhancing domestic energy security. Our business units SDG&E and SoCalGas are helping to lead this transportation revolution.
SoCalGas® Supports the Los Angeles Unified School District’s Largest-Ever Purchase of Natural Gas Vehicles
In 2010 the Los Angeles Unified School District purchased a replacement fleet of 320 natural gas-powered school buses with $48 million from the South Coast Air Quality Management District. The new buses more than doubled natural gas needs at the school district’s Gardena fueling facility. Our SoCalGas Pacific Region Field Services team helped to upgrade the District’s compressed natural gas infrastructure, more than tripling compression capacity and allowing it to support the massive influx of new natural gas vehicles. The facility can now refuel up to 300 buses–at the same time!
San Diego is EV-friendly!
SDG&E has partnered with Nissan® and ECOtality to launch the largest transportation electrification project in U.S. history. ECOtality – in coordination with SDG&E – is installing 1,510 public vehicle charging stations in San Diego. Starting in December 2010, approximately 1,000 fully electric Nissan LEAF® cars and 200 plug-in hybrid Chevrolet Volt® cars began arriving at San Diego-area auto dealers.
Integrating electric vehicles and the charging infrastructure is a key component of SDG&E’s smart grid initiative. Using future vehicle-to-grid technology, electric cars can serve as rolling energy storage systems capable of delivering electricity to the grid when it’s needed most. To learn how electric vehicles will integrate into a smarter grid, click here.
A Glimpse into the Future
In October 2010 Debbie Reed, Sempra’s then-executive vice president (and now CEO) spoke at a conference in Tijuana, Mexico, on the topic of innovation. She described the impact of energy innovation on a day in your life 10–15 years in the future.
Back to Top [↑]Did You Know?
Sempra LNG’s customers pay capacity fees in order to reserve the right to use our LNG terminals to import, store and re-gasify their LNG cargoes, but if market conditions aren’t right or supply isn’t available, they don’t always use the capacity.
Did You Know?
Our SoCalGas business unit is the largest natural gas distribution utility in the United States!
Did You Know?
By selling coal-fired generation and investing in efficient natural gas-fired power plants as well as new solar and wind energy facilities, Sempra’s business units have reduced the emissions intensity of their power plant fleet by one-third since 2005.
Did You Know?
In 2010, our business unit SoCalGas distributed $20 million in energy-efficiency incentives and rebates!
Did You Know?
Our employees are passionate about alternative fuel vehicles. More than 50 of our employees have joined together to create the “Alternative Fuel Vehicle Group.” Members meet monthly to discuss upcoming vehicle releases, the latest technology news and the day-to-day use of these innovative vehicles.
Did You Know?
LNG is simply natural gas that is super-cooled to minus 260 degrees Fahrenheit. At this temperature, the natural gas condenses into a liquid, taking up to 600 times less space. It can then be safely and cost-effectively transported around the world by specially designed LNG carriers.
Did You Know?
Time-variant pricing better reflects the actual cost of electricity at the time used – with prices higher during on-peak and lower during off-peak periods. With smart meters, customers will know when and how they use electricity and be able to reduce costs when they choose to use energy during times of lower demand. In Southern California, on-peak demand typically occurs in late afternoon during the summer and fall.
Did You Know?
California’s Renewable Portfolio Standard requires that 20 percent of the retail electricity sold by California utilities come from renewable sources by 2010. In April 2011, California’s governor expanded the standard when he signed a law requiring all energy services providers, including utilities, to obtain an average of 20 percent of their power from renewable sources from 2011–2013, 25 percent in 2016 and 33 percent in 2020.
Did You Know?
The Sustainable Communities Program integrates energy resources, such as solar, into innovative, highly energy-efficient, sustainable building projects.
Did You Know?
How much CO2 is emitted when 1 megawatt-hour of energy is generated? This is what we mean by “emissions intensity.” According to the U.S. Environmental Protection Agency, the answer depends on how that energy was produced. Under typical conditions, burning natural gas produces roughly half as much CO2 as burning coal to generate the same amount of energy. The main reason our business units’ emissions intensity is 40 percent below the national average is that we rely heavily on natural gas and renewable resources to generate power.