We promote energy efficiency; develop and operate low- and zero-carbon energy infrastructure; and embrace energy innovation. These activities position us for continuing success and are consistent with our responsibility to the broader world.
In December 2015 at the United Nations Climate Change Conference in Paris, nearly 200 countries reached an historic agreement to combat climate change. This accord intends to spur action to limit global temperature rise to less than 2 degrees Celsius this century. Each signatory agreed to set and achieve a Nationally Determined Contribution to reduce greenhouse gas emissions.
In addition, some investors are evaluating their investment decisions based on a company’s carbon dioxide emissions. Some communities are adopting policies, often including climate action plans, to reduce greenhouse gas emissions. And some customers are also changing the way they live, work and travel to reduce their greenhouse gas footprint in response to climate change concerns.
Sempra Energy’s business strategy accounts for these factors. While we work to reduce our impact, we also realize that increasing demand for lower-carbon sources of energy holds long-term promise and opportunity for our companies. Our low-carbon business strategy is outlined below.
Our subsidiaries operate electric transmission and distribution lines; natural gas-fired power plants and LNG facilities; and natural gas pipelines and storage. They also purchase electricity generated by other companies to deliver to their customers. And those customers use natural gas in their homes and businesses. All of these activities create or result in the creation of greenhouse gases. For information on how we work to reduce these emissions, continue reading below.
Since 2006, we have publicly disclosed our greenhouse gas emissions to CDP, an organization that publishes the greenhouse gas emissions of major corporations. In 2015, we received a transparency score of 100 out of 100 on CDP’s annual climate change survey and were named to its Carbon Disclosure Leadership Index.
Sea level rise – an impact assessment
San Diego Gas & Electric’s service territory spans more than 80 miles of coastline that, according to many projections, may be impacted by rising sea levels in the years to come.
The utility’s planning process for new coastal facilities has taken the probability of sea level rise into account. This includes the South Bay Substation along the San Diego Bay, which was designed and constructed on an elevated pad 21 feet above sea level.
However, certain low-lying substations and underground facilities built before sea level rise projections were well-accepted face increasing risk of flooding, particularly during storm surges and high lunar tides. Moreover, accessibility issues caused by an inundation could result in crews being unable to make quick repairs, leading to prolonged outages.
SDG&E is working to identify, prioritize and act to protect its system from these potential impacts.
The utility is also collaborating with the U.S. Department of Energy and 17 other utilities through the Partnership for Energy Sector Climate Resilience to improve the resilience of energy infrastructure against extreme weather and climate change impacts.
Demand for lower-carbon sources of energy continues to rise.
Sempra Energy’s low-carbon business strategy is designed to meet this demand: we promote energy efficiency; develop and operate low- and zero-carbon energy infrastructure; and embrace energy innovation. These activities position us for continuing success and are consistent with our responsibility to the broader world.
- Natural gas is the cleanest fossil fuel and it is increasingly available and affordable. When liquefied and delivered to countries with oil- or coal-based economies, it provides them with a much cleaner alternative. Natural gas-fired power plants also serve as a source of “always-on” electricity which is critical, given the intermittency of solar- and wind-based energy.
- Renewable energy costs have fallen significantly in recent years; solar and wind will contribute significantly to the energy mix in years to come.
- Energy-efficiency efforts result in our subsidiaries’ customers saving hundreds of thousands of megawatt-hours of electricity and tens of millions of therms of natural gas each year. Improving energy efficiency is one of the easiest and lowest-cost ways of reducing overall energy use and reducing greenhouse gas emissions.
- Innovative new technologies are having significant impacts on the way our customers think about and use energy. With a smart grid – and the addition of smart meters and smart devices such as thermostats, home energy management systems and electric vehicle charging stations – we are able to more precisely deliver energy when and where it is needed. And with power-to-gas technology now being piloted, we might be able to use renewable energy to make hydrogen gas, maximizing the utility of wind and solar plants – and of our natural gas distribution systems.
Changing the game with a new type of engine
Air pollution is a concern, particularly for those living near major transportation corridors in Southern California. Heavy-duty diesel trucks are the biggest polluters in California’s transportation sector.
SoCalGas is working with engine manufacturers and various public agencies to deliver a near-zero-NOx-emissions heavy-duty engine fueled by natural gas. This engine, which should be available by 2018, is expected to reduce NOx emissions by 90 percent and may also be used in off-road, rail and marine applications.
As a pioneer in supporting natural gas vehicle (NGV) technology, SoCalGas supports the development of alternative-fuel and NGV infrastructure, including compressed natural gas (CNG) refueling stations. SoCalGas also has an extensive NGV program that provides information, education and support to customers who use, or would benefit from using, clean-burning natural gas as a transportation fuel.
Using renewable energy to create carbon-free gas
SoCalGas, in collaboration with the U.S. Energy Department’s National Renewable Energy Laboratory (NREL) and the National Fuel Cell Research Center (NFCRC), is developing a demonstration project to test the first-ever power-to-gas system in the U.S.
The system will create hydrogen (a carbon-free gas) using a process called electrolysis. This hydrogen gas could be stored in utility natural gas distribution systems or used as an energy source to power cars and trucks, micro turbines or fuel cells.
Public policy position
Sempra Energy is actively engaged in the dialogue on climate change, and our position has been consistent for many years. We continue to advocate for sensible U.S. federal climate and energy policies to regulate greenhouse gas emissions. We believe that establishing a predictable price for carbon, coupled with a long-term commitment to energy efficiency, renewable energy, and a transition from coal to lower-carbon fuels like natural gas, will lower greenhouse gas emissions, stimulate investments in new clean energy technologies and create new business opportunities. Our position on U.S. federal carbon regulation is based on these principles:
- We support federal standards for energy efficiency, renewable energy and emission performance standards for generation facilities that encourage the use of cleaner-burning fuels such as natural gas. States should be able to adopt more stringent standards.
- Natural gas is a foundational fuel that emits 50 percent less carbon dioxide than coal, allows for integration of intermittent renewable resources and is abundant and affordable. With a nearly 100-year supply of natural gas, the United States should promote policies that expand the use of natural gas in the electric power and transportation sectors; allow exports to other countries to improve global air quality; and grow the U.S. economy.
- States such as California have already moved forward with aggressive energy-efficiency initiatives, renewable portfolio standards and emissions trading programs that have resulted in a reduced carbon footprint. It is critical that any federal carbon regulation take into account these investments in successful efforts to reduce greenhouse gas emissions.
In an era of carbon constraints, we believe lower-carbon natural gas and zero-emissions renewable energy should play a central role in U.S. climate and energy policy. Ongoing trends support this position: The U.S. Energy Information Administration projects that by 2040, worldwide demand for natural gas will increase 57 percent; U.S. coal use will drop 20 percent; and U.S. renewable energy use will double.
Actions to reduce emissions
In implementing our low-carbon business strategy, Sempra Energy and its subsidiaries decrease our greenhouse gas emissions and those of our customers. You can find more detail and data in the Emissions subsection of this report or at www.cdp.net. It is important to note that many of the activities described below represent opportunities for our company and subsidiaries.
We use natural gas instead of coal. In 2015, our subsidiaries’ natural gas-fired power plants generated more than 13 million megawatt-hours of electricity, emitting some 3.9 million metric tons of carbon dioxide equivalent – roughly half of what would have been produced if that power had been supplied by coal-fired power plants. Also in 2015, more than 35 percent of the energy our SDG&E subsidiary delivered to its customers came from renewable sources, surpassing the 2020 regulatory requirement a full five years in advance.
We develop renewable energy. Since 2008, our Sempra U.S. Gas & Power subsidiary, along with its project partners, has developed projects that produce nearly 2,000 megawatts of renewable energy. If all the power generated by these renewable power plants had been produced using traditional power plants, more than 10 million metric tons of carbon dioxide would have been emitted (based on the U.S. Energy Information Administration’s 2013 greenhouse gas emissions rate for power generation in the United States). An additional 422 megawatts of renewable power were under construction as of December 31, 2015.
We encourage energy efficiency. Energy efficiency efforts at our California utilities have helped customers save more than 649 million therms of natural gas and 6 million megawatt-hours of electricity since 1990. SDG&E and SoCalGas receive financial incentives for meeting or exceeding energy-efficiency goals: profits are not tied to the amount of energy sold.
Encouraging energy efficiency
Our California utilities work with their residential, business and industrial customers to determine ways they can save energy and reduce their energy bills through energy audits, incentives and rebates. In 2015 alone, these energy-efficiency programs saved approximately 331,000 megawatt-hours of electricity, enough to power 55,165 homes for a year; and 27.3 million therms of natural gas, enough to serve nearly 54,000 homes for a year.
In 2015, as part of this continuing effort to help customers reduce their energy use and lower their bills, SDG&E launched SDG&E Marketplace, a new online store where customers can shop for energy-saving products offered by third-party retailers. SDG&E is among the first utilities in the nation to launch this type of online tool, making it easy for customers to find products that will help them save electricity and money.
In Chile, Sempra International subsidiary Chilquinta Energía created an energy-efficiency program for its customers in the port city of Valparaiso. Customers can have advanced meters installed in their homes or businesses and can turn in older, inefficient refrigerators in exchange for a reduced price on a new, more efficient (A+ or A++ rated) refrigerator.
We build infrastructure that allows other companies to switch from coal or oil to natural gas. New natural gas pipelines in operation or under development by Sempra International in Mexico would make this cleaner fuel a viable option for manufacturers and power plants that now use fuel-oil. Additionally, at our Luz del Sur subsidiary in South America, a new hydroelectric plant began commercial operation in 2015 and now generates up to 100 megawatts of clean energy.
We explore the potential of new technologies. Our SoCalGas subsidiary launched a demonstration project in 2015 in partnership with the U.S. Department of Energy, which uses excess renewable energy to take the hydrogen out of water in a process called electrolysis. Adding this carbon-free hydrogen gas to SoCalGas’ natural gas distribution system could significantly reduce fugitive emissions as well as emissions from electricity generation in that company’s service territory.
These and many other actions demonstrate our implementation of our low-carbon business strategy. At Sempra Energy, we are aware of our responsibility to the broader world. By respecting the environment, acknowledging our impact and adapting to changing business conditions, we can continue to grow our business over the long term.
Capturing – and then using – dairy biogas
According to the California Air Resources Board, California’s dairies release approximately 19.6 million metric tons of carbon dioxide equivalent into the atmosphere each year. By capturing and conditioning this biogas, then putting it into the natural gas distribution system and delivering it to customers, we can offset a significant amount of greenhouse gas emissions. This also helps California meet its renewable-energy goals, as biogas is considered a renewable resource.
SoCalGas’ biogas conditioning service helps customers use biogas produced in their own operations. The company is exploring other ways to increase the supply of bio-methane in California.
New environmental policies and positions
In 2015, Sempra Energy released a set of environmental policies and position statements on a range of topics, including climate change, biodiversity, water and hydraulic fracturing.
The new policies clarify the company’s approach to minimizing environmental impacts across the enterprise. The position papers describe the company’s official position on key energy-related public policy issues.
You can read these and other policies and position statements at Sempra.com.