 This is Paul Guiado from U.S. Embassy Brasilia, Brazil. I have the pleasure today to begin our web chat with Angelina Galateva of the California Independent Systems Operator Board as well as Renewables 100. This web chat is hopefully the first of a series of web chats with renewable energy experts from the United States who have been participating in a climate partners campaign with State Department through the Mission Brazil and only U.S. Embassy Brasilia, but also our consulates to bring U.S. renewable energy, energy efficiency, expertise, policy, backgrounds, lessons learned to Brazil so that Brazil can also develop its renewable energy sector and hopefully to the benefit of the greater climate and induction of carbon emissions. Again, as by means of introduction, Angelina was a guest of ours here in Mission Brazil in November 2015. She visited both U.S. Embassy Brasilia as well as Consulate General Ezefan and had a series of substantive meetings, largely discussing her role in a series of reforms in California, which have led to a very rapid introduction and explosion, rather, of solar photovoltaic wind and other distributed energy sources within the state of California. In her role as part of the California Independent Systems Operator Board, Galateva has been a leader in promoting renewable energy as well as reduction of carbon emissions through the state that's truly a global leader in that area. So without further introductions, I'd like to turn over the platform to Angelina. Thank you so much, Paul. This is great and I enjoyed coming to Brasilia as well as Recife. It was a lot of fun. We had opportunities to learn from each other and realize what mutual collaboration can lead to and why it is so important to have a platform where all of us are working together towards renewables. This is not a one-time event. We actually had the fortune of following up with the meeting with Sergio Xavier from Pernambuco, the environmental secretary in Paris, where we outlined some initiatives of working together. Pernambuco also signed the Under 2 MOU, which is a subnational initiative that California launched and Pernambuco has become a member of it. I will talk about that a little bit later in the presentation. And we're going to be moving forward, hopefully with projects that can showcase the abilities of U.S. companies to deliver renewables as a solution to Brazil as well. And this is very much a collaborative effort that was followed up by a visit from a delegation here in California, where we had the fortune of talking to some U.S. companies such as City Solar, Tesla and others in terms of Stanford and universities, UCLA, water companies and water agencies having an interest in implementing renewables, energy efficiency and water programs for Brazil on a collaborative basis. So hopefully this will be a continuous effort where there can be mutual learning and certainly the desire is there, the similarities are there, and we hope that this will be something that we can brag about on a global scale very soon. So let's start with the presentation as a follow-up on what we had done with the visit in Pernambuco and Brasilia. Do we have the presentation up? Great. OK, so the explosion of renewables has happened not only on a very local level here in California and other areas, but also on a global scale. Next slide, please. The total investments in renewables and technologies for 2015 has been overwhelming. It has surpassed the investments in fossil fuel energies, specifically led by solar, 1.5 trillion dollars went into solar, large scale, utility scale projects, and interestingly enough, 2.2 trillion went into distributed energy, which is also a very large part and a large portion of what we're delivering onto the grid and making sure that customers have access to clean renewable energy and are empowered to make choices and nothing empowers customers more than having control of their own energy use and energy systems on their roof. Renewable energy also, next slide, represented 65 percent of new US electric generation capacity in 2015. So renewables are overtaking investments over fossils on a scale, not only internationally, but what we see here in the US as well. The presentation will focus on some of the global initiatives, the national initiatives, then in California, how we're implementing and where we think the future is as well. The future for coal is not looking so bright. The next slide, the value of the top US for US companies has declined 99 percent since 2011, which is a pretty massive number. And some of the other larger projects, and we can click through this in terms of next slide, in terms of what has happened to coal companies overall. Peabody filed for bankruptcy this April, which was a surprising move, but not in the context of where all of these other companies, please click through. Disappearing over time have demonstrated that this is a situation where fossil investments is basically a divestment by value destruction. As you can see, only the index for renewable energy is looking positive between 2013 and 2015, which is the year today. Now, not only are prices of renewables coming down, we've seen that happen. Next slide. But we see what countries have achieved today, which, although it's not very impressive, next slide, with the goals to 2040 is a substantial market. So we've got predictability of investment based on regulations, which is very important, having a regulatory scheme that is transparent, long term and consistent enables us to foresee from a financial perspective where the market is going. So the huge decline in energy prices in terms of renewables, which is over 80% for solar in the last three years alone, can continue as a boom globally. Now, let's go back to California. Next slide. You need to have the regulatory system. SB 350, the Clean Energy and Pollution Reduction Act of 2015, is the regulatory structure that actually frames the future of the California grid. We have had the portfolio standard, which is 33% by 2020. We've exceeded that. Actually, I got an email from the ISOGrid operator a couple of days ago, basically saying we're operating at 33% now. We're going to be doubling the energy efficiency in building. We're going to be focusing on electric transportation. And most importantly, and you're on the right slide, we're going to start looking at a West wide grid. This is the situation that we have now in the United States. California is on the West side and it's one of nine grid operators in the US. As you can see, most of them are focused in the middle and the East side of the country, then there's a big empty space and then there's the California ISO. In order to have benefits from renewables, you need to have regional integration. I was at the Bloomberg New Energy Finance Forum in April and Secretary John Kerry made a presentation and he referenced this slide, basically saying, what's going on? Why do we have this big empty hole in the middle and you should be doing something about it? So yes, we are. And hopefully we will have an integrated West wide market soon emerging in California and throughout the West led by the ISO. Next slide. So ISO by the numbers. This is by far the largest ISO, one of the largest in the world, very similar to the European ones. And we collaborate with the Europeans closely as well. We cover 80 percent of the state and we are starting through a very innovative energy balance market to start working in our neighboring states as well. Next slide. Our role basically is first and foremost to maintain reliability. You could be 80, 100 percent renewable, but if you have blackouts or brownouts, that's a big problem. So reliability is key. Then implementing state policy, which is now the 50 percent goal, 50 percent renewables by 2030. And keep in mind, very importantly, that 50 percent goal does not include large scale hydropower and it does not include rooftop solar. So that's an additional 15, 20 percent. So technically, the 50 percent is more like a 65 or 70 percent goal. And the 33 percent is more like a 50 percent goal overall, which we have achieved. Next slide. Critical balance between deploying renewable energy resources, making sure that you are not being prohibitively cost expensive and keeping indeed a downward pressure on costs. And interestingly enough, renewables are helping us do that. And of course, maintain reliability, which is the top goal. Next slide. This is the famous duck chart. And every time we talk about California, every time we talk about high percentages of penetration of renewables on the grid, you need to be aware of the duck chart. The duck chart is basically solar coming online in the middle of the day, suppressing prices. And towards the end of the day, 6 p.m., you have a huge ramp of about 10,000. We expect it to be 30,000 megawatts by 2020 for a two hour period. Now, this demonstrates that you need to have diversity and flexibility in your fleet. You can have the renewables, but in order to have them efficiently, you need to be able to handle the duck chart. Put the duck on a diet, make sure that you shrink the belly to the extent that you can, and lower its head down so it's as flat as possible over the day. The next slide. So what we've seen is that the midday low drops of 22,000 megawatts. We didn't foresee this five years ago. This is quite a new phenomena. And we were thinking about electrifying the transportation sector and kind of decided that we want to push electrification of the transportation sector to start charging at night. Now what we need to be doing is charging those cars in the middle of the day and zapping them when the peak used to occur in the middle of the day around noon or 2 p.m. Now what we're seeing is that the peak is no longer at 2 p.m. It's 6 to 8 p.m. So we need low shifting and that presents some challenges, but also opportunities. And with the steep ramps, we need to make sure that we're able to operate. Can you implement renewables fast? What is a great success story? And in terms of bringing resources online and bringing them on fast, you need to be able to realize that you can bring a lot of megawatts online very, very quickly. In 2010, we started with only 85 megawatts. That is large scale transmission online in California, which is not an impressive by any means number at all. And we had about 3,000 megawatts of wind. Wind actually had more of a success in the beginning in California because the resources were cheaper and the renewable portfolio standard worked for it better. By 2015, because of the regulatory framework, because of the goals and the transparency, we had 6,000 megawatts online, which is the equivalent of building three nuclear power plants very quickly. And we had 5,000, almost 6,000 megawatts of wind. Again, wind is not a very great resource in California, but we do want the diversity so we are building it. As we move forward towards 2030, there is a debate about how much renewables we'll have. That's the next slide. But overwhelmingly, all the studies show that it's going to be between 70 and 80 percent of variable resources, which means wind and or solar. So we've got to be able to figure out how do we balance those resources? How do we provide grid stability? How can renewables balance renewables and make sure that we can still continue to invest in these low cost and increasingly lower cost resources cost effectively? Because what is becoming very clear is if you go lowest cost with your RFPs, while you're at 2030, maybe even 40 percent penetration of renewables, that's OK. You can integrate it. You probably see predominantly wind and predominantly solar installations. In California, we saw almost 80 percent of solar installations and solar bits. But as you move beyond the 50 percent, it becomes a new game ball. A new game all together. And you've got to change the play in diversification and make sure that you have flexibility and diversification and a very strong grid that can back up penetration. Next slide. And you also need to be working with the distribution sector. Traditionally, the transmission and distribution sector haven't coordinated as closely, but now we need to, because as you see that big red bump above the grid, above the green on this slide, this is curtailment. This is over generation in the middle of the day. You don't want to be shutting down wind and solar plants, producing cost-effective energy and kind of wasting it because you don't have abilities to store it. So storage becomes very critical. The ability to move that power becomes very critical. And having the know how not to be wasting it, but incorporating it, becomes very critical as well. Next slide. What's interesting also is efficiency programs have had a very, very strong effect in California. So if you see from 2005 to 2014 and 15, we've had more or less a flat demand by the yellow line in terms of how demand has grown. But as you look at the need for transmission between 2010 and 2030, it's an exponential investment that has to take place. And that is something that we need to be aware of as we move and transition towards a much more heavy renewable dependence system. The grid becomes very critical, especially the regional integration in the grid starts to play a larger role, the larger the geographic horizontal footprint, the better, the larger the vertical visibility into the distribution grid all the way to the customer becomes critically important so that you can forecast because forecasting becomes key in terms of how you're able to allocate resources throughout the grid. And actually we've taken forecasting to an extreme where the ISO right now has two full-time weather metrologists on staff and they claim that they're better than the weather channel. They can predict when the sun will be shining and where there will be cloud cover and where and when the wind is blowing and how. So we have pretty good predictability on the grid. Variable resources are indeed variable, yes, but they're also very, very highly predictable and in that sense, very reliable because we can count on the sun shining and the wind blowing every day. Next slide. So it's become increasingly clear again, as I said, that regional collaboration is key and we didn't want to go through a regulatory scheme and demand data to do it, but the ISO decided, why don't we take our software and our incredible IT capabilities and make them available to our neighbors across the West where they can take part in a five-minute energy imbalance market, five-minute ahead. It's a regionally diverse fleet. All we're doing is optimizing the system and dispatching their system for them and being able to optimize the existing assets and utilize those savings to be able to build up the grid for Western collaboration. Completely voluntary. You can come in or leave at any point in time. You don't have to give up your autonomy. We are just making sure that you can take maximum benefit from the system that you already have. And why is that necessary? Next slide. That big empty hole that we saw in the middle of the West, that's actually 38 separate balancing authorities. Separate balancing authorities are extremely inefficient because everybody has to carry reserves and everybody has to make sure that they are islanded. And in case of an emergency, they can operate independently, which leads to huge inefficiencies across the West. And it's very, very difficult to be able to incorporate a comprehensive renewable system if you have separate balancing authorities throughout the West. So each balancing authority, balancing load and generation is very, very difficult. If you're able to match the generation with the load, that would be the next slide. Instead of everybody having to do that separately, if you do it from a centralized system through the energy imbalance market, you have the diversity of the balancing resources, you increase flexibility, you decrease the need for reserves, which is very, very important because that is economically efficient. And you decrease integration costs for everybody. And everybody benefits from participating in the market. It's a very economic decision. Next slide. So what we're doing technically is combining all of the balancing authorities and all these entities that you see there, Puget Sound Pacific Core and the Energy Arizona Public Service have already joined the energy balance market. And we launched it in actually November of 2014. It has operated for a little bit over a year with tremendous success already. So you've got automated dispatch, which results in balance and avoids congestion. It's completely voluntary, as I said, with the exit fees. And it allows resources to be centrally dispatched. Next slide basically shows the entities that are participating and that are interested in being a part of the market so that they can take advantage of this optimized system. Next slide. In order for that to succeed, again, you need to build up transmission. And these are all the transmission interconnections that have already been beefed up or that have been incorporated in order to make sure that you can move power back and forth east and west. And although California has always been a net energy importer, what we are seeing now is that California is also exporting power, which had never happened before, and we were able to do it. The success story. Next slide is also something that happened this April with Berkshire Hathaway. Berkshire Hathaway owns Pacific Core, which joined the energy imbalance market that you saw above, but Berkshire Hathaway also owns Mid-American, which is a power company in the middle of the country, which participates in the MISO territory, another integrated market. And they actually operate in Iowa. And the next slide, it was very interesting. I had never known about Berkshire Hathaway, not known to be the most environmental company on the face of this earth. And I, as part of Retoble's 100, never knew that they had a 100 percent renewable energy, a wind power goal for Iowa. But indeed they do. And they announced actually on April 13th their latest project, which brings them up to 85 percent when it's completed of powering Iowa with wind power. This would not have happened if they did not have an integrated market. So Pacific Core is one of the first ones to join the energy imbalance market in California, because Berkshire Hathaway had that ability to know that in Iowa and in other places, they were able to integrate renewables very cost-effectively, move to a predominantly renewable system and keep their prices as one of the lowest in the United States. They are the seventh lowest in the US. They're not going to ask for any rate increases to do that. And they're going to follow a similar scheme in California as well. And they already unveiled at the end of 2015 the largest solar project on the face of this earth, the Solar Star Project, which is 700 megawatts and it's here outside of Lancaster, which our delegation from Vernon, who actually incidentally visited, they were the first international visitors, actually the first visitors to visit that site. And we were told that the day before they had had war in Buffett and Bill Gates toward the site, so we missed them by a date. But that's what this project is like. It was very quiet. It was very neat. They didn't brag about it. I'm glad they bragged about Iowa, but we're looking to see more renewables come online from traditional energy companies moving away from fossil towards renewables on an economic basis. And there's nothing wrong with making green from green power. That's all OK. Next slide. The benefits from the EIM are very much economic. And you can see from this slide where your initial startup costs of let's take Pacific core of 20 million are paid back in the very first year where they're making between 21 and 129 million, depending on how close they're integrating and their annual costs are going to be three million a dollar, three million dollars, and this is going to be repetitive year after year. So the argument is not if we join the EIM, but why not join the EIM and realize those benefits for our customers if we are an energy generator in the West? Next slide. Again, huge success story launched in November of 2014. The EIM has already realized more than 45 million dollars. And it looks like the first quarter is doing OK as well. If you go to the next slide, because it's expensive to invest in transmission, even if nobody else were to join, but just Pacific core over a 20 year period, we are going to have a combined benefit without any additions or changes to the system just from the efficiencies alone of three point four to nine point one billion dollars. So that's going to pay for the transmission upgrades in and of itself. And it's a voluntary system, basically maximizing operational efficiencies, which is a beautiful thing. You don't need regulations. You don't need anybody coming in and telling you what to do. You can come or you can leave as long as it's a benefit to you. Next slide. The one thing we didn't anticipate, which was very interesting was governance, that you have to change the governance because all of our Western neighbors, even though they love California, would like to have a representation. And they would be very happy if the West wide grid was not called the California independent system operator, because the Arizona folks and the Idaho folks don't view themselves as Californians. They would like to have it be called grid West or something else or Western operators system or West wide operating system. And of course have representation on the board and on the governance. So we are going through a governance study and how we make that happen. Is everybody equal? Does everybody have equal votes? Is it different? How do we change it? It's kind of an exciting process. Lots of arguments that we didn't force here coming up. But as you can see from this slide, we have to complete it by the end of this quarter in order to move forward. So we're moving very quickly to make sure that that actually happens. The ISO governance is going to be the big sticky wicked. And I think we'll work it out. It's looking like we would. But it's the small stuff that overturned the cards. So the study impacts from the regional market have come back. They're overwhelmingly positive and we are looking at making sure that we've got a good governance structure that's proposed and acceptable to all. So what you're seeing here next slide in terms of regional transmission organizations and the big empty space in the middle on the on the map with the nine operators, that would be the next slide. What work the Federal Energy Regulatory Commission, which is the slide after that did foresee in 2000, but were unable to implement because it had to be a voluntary compliance and the West, of course, said, no, we're independent. We will not have a large scale operator was actually a West grid, a Midwest, Southeast and Northeast grid. And why Urquhart, Texas is in and of itself alone as a purple entity. We don't know, but that's what they did see. It's important to have that regional collaboration next slide as our friends from Europe also showed us towards the single European market. The price coupling regions are also a voluntary market that actually took place in Europe with seven grid operators from different states. What is very important, of course, is next slide transmission again. European transmission integration was critical for all of these countries to be able to participate and actually interconnecting to Norway's large scale. Hydro reserves was critical because Norway's hydro balances everybody else's renewables, and that is actually a role that Brazil could play into the future as well. We saw next slide on May 5th, a same price in the whole market, which is what they were aiming for. And of course, the next slide, you can see how the Norwegian hydro balances the wind from Denmark in order to be able to allow Denmark to go to a very high percentage of wind integration into their portfolio. Solar is also very important. Next slide, I had shown these slides before, but they're impressive because we had a big drought here in California in 2012 to 2015, which actually still continues. So our hydro resources as a result of the drought were diminished. What we also had in 2012 was 2000 megawatts disappearing from a large nuclear power station because there was a nuclear leap. So that plant was shut down. And what this slide, as well as the next slide, demonstrate is that the installation of solar, those 5000 megawatts that took place, actually made up for the loss of the hydro reserve as well as the nuclear reserve. And the slide after that shows the net difference that we would have experienced rolling blackouts had it not been for the solar coming online. So it was actually solar that saved the day. The next slide demonstrates something that's closer to home, but is basically new projects applying for interconnection in Chile. We're seeing very much the same scenario that we saw here in California, overwhelmingly renewable and overwhelmingly solar based. And that is what you will see in the beginning because that is the lowest cost. And the auctions are actually working. So the next slide basically says the growth is fueled by new energy policies, encouraging clean energy, time block auctions, stable economy and great resources. The average PPA prices are also very, very attractive of seventy nine dollars a megawatt hour or seven point nine dollars a kilowatt hour, which is within the bandwidth of what most resources would be costing as as the result of new installations, probably on a lower scale, operational costs are low and you have no emissions as well. Next slide. So we've got an energy of plenty because there's plenty of energy around and an energy of competition between renewables. And then the next slide basically showing that a lot of subnational initiatives are taking place to go to 100 percent. We're seeing that very much on a subnational level. The next slide, the under two MOU, which was an initiative that California took with Buttonwood work together, it was one initiative that actually was very prominently featured at the COP this year as one of the subnational targets towards renewables and towards a comprehensive reduction of greenhouse gases. California took this initiative because it's the sixth largest economy in the world. The government abuse, this is a moral imperative that we have to move forward and make sure that we have a leadership role together with other nations focusing on under two degree temperature growth. And of course, the other two, which is important is two tons per capita of CO2 emissions. And actually, if you look at per capita emissions between California and Brazil, Brazil is at a lower per capita goal. So actually, we wanted to make sure that our partners would be able to achieve those goals with us as well. Next slide. UNESCO focused on 100 percent renewables and we've got all UNESCO sites committing to go to 100 percent renewables, the COP cold for 100 percent renewables. Next slide, the G7 cold for 100 percent renewables because if we're decarbonizing our economies, certainly the energy infrastructure is 100 percent. Next slide. What is the future? Clearly, it's decarbonized and clearly it's decentralized with a huge role for the customer to play. Next slide. We're going to be seeing the customer and a very much more customer focused system, which incorporates your rooftop solar, your electric vehicles, your consumer control of storage, rates and signals that help you participate in the market, whether it's through your vehicle, whether it's through your storage system, whether it's through your generation. And each household is going to have the ability to participate in the market. Next slide. It's a complicated slide, but it's intended to show how the system is changing. And this came actually from the ISO to allow the markets to incorporate the individual customers as aggregated. So we can indeed go to that individual customer leader and control what happens on the grid, on the distribution and transmission side, so we can optimize the system vertically as well as geographically. Next slide. We need to expand energy efficiency. Energy efficiencies key advanced demand response in order to be able to incorporate more flexible resources on the grid. Next slide. Storage. Storage is going to be a game changer. Large scale renewables require large scale storage as well. So you're going to have ISO services, utility services, customer services, all the way from 10 minute, very fast, very, very rapid discharges and charges to load shifting, which can be hours of charging and discharging through large scale pumped hydro projects. So and everything in between. And we're certainly seeing programs that encourage that. Electric transportation. Next slide is going to be very key as well, because that can shade the peak and stabilize the grid. Next slide. We're evolving and we're evolving very rapidly, just like the humans evolve. The energy system is evolving. It used to be the same for hundreds of years. Since the 1990s, we have seen a very rapid phenomenal shift towards a much more decentralized and a much more customer focused system. And that's the way it has to be. One that is dependent on grids, but one that is also dependent on micro grids and decentralized system and making sure that we are able to tap into every single resource most efficiently in order to be able to operate the grid. That is increasingly renewable based and decarbonized. Whether people tell us if we have the resources. Next slide, I just like showing the slide because to power the whole world with solar energy requests covering only 0.07% of the world land area. So we don't need that much land in order to be able to power the world. It's transmission. It's how you store it. It's how you deliver it. It's how you capture it and how you make it work. And if we can only capture two minutes of the solar radiation that hits the earth every day, we can power our world, including the 1.2 billion people that have no electricity for a year. So next slide. So if these guys don't convince you, that's the G7. I don't know why they have nine people here, but it's the G7 calling for action. And if the pope doesn't convince you, I was just in Argentina, so I just can't help it. Pope Francis was very popular and he has called for renewables. Then you know what? We don't have a planet B. We need a plan B. We need to be sure that we're decarbonizing as fast as possible in the most efficient way, sharing knowledge and experience across the board because we all have a lot to benefit from each other and we can make it work. So thank you very much. This is the presentation and I look forward to questions. Excellent. OK, our first question is from Luis and Lucife. And Luis is asking about high renewable energy penetration levels and their effect on instability and frequencies during their inter-intermittency with particular emphasis on winded solar. And so his question is how has California addressed intermittency from the system operator perspective? And we initially it's a learning curve and it's a learning process. Initially, the grid operators were saying, OK, 10 percent, maybe we can incorporate 10 percent renewables on the grid. 20 percent is going to be really tricky, but they incorporated 20 percent. It was fine. But 33 percent was going to be very destabilizing. So we had to learn a little bit from our European counterparts who had incorporated more and you need IT solutions. It's very much an IT solution. It's a forecasting solution and it's being able to to to incorporate more flexible resources that allow you to operate the grid efficiently. What also was kind of baptism by fire was the fact that we lost a very large, very stable resource in terms of the nuclear power station coupled with the 24 seven supply of hydro over a short period of time. So we had to quickly beef up the transmission system and the generation. And it was renewables that came to the rescue. So they learned how to operate the system. And as you can predict renewables, you can dispatch them much more efficiently. And if you have a larger geographic print, that certainly helps. We're looking into the future and needing to plan not in five or 10 year increments, but in 15, 20 and indeed 30 and 40 year increments. So looking long term is going to be very important. And diversity is important and flexibility is important. So if you know where you're going and you've got predictable goals like now we know we're going to 50 percent and that's a floor, not a ceiling. And we're going to be moving further beyond that as well. We are not going to be able to stop the incorporation of rooftop solar because what we are seeing on the distribution side as in is an installation of 8000 rooftops every single month in California. So huge amount of rooftop installations on the distribution side as well. And we need to be able to manage that grid. So we're doing it together with storage. We're doing it together with it solutions. We see the role of the customer increasing energy efficiency increasing as well. This is all cutting edge grid and it's exciting for anybody that wants to get in the field and the great operators are bragging about how good they've become incorporating renewables and that they can incorporate even more. So this is music to my ears. Excellent. No, that's we have another question which ties into the previous question and this is from Ricardo and he's essentially asking about the connection or connectivity of wind and solar farms with expansion of transmission lines. And the question is how are the system operators and project developers coordinating to ensure that there's adequate transmission prior to the construction of wind and solar facilities in California? Right. That is very, very key. And it's not only in California. This is an issue that exists everywhere that you have large scale projects being built and incorporated. I actually was able to visit one of the most beautiful wind farms I have ever seen and received and there was transmission lines that it was able to interconnect its the ability to the grid operators to coordinate with developers and what we've seen is identifying areas where there's capacity on the grid and identifying areas where there's a need and a lack of congestion kind of is the first step areas and saying if you develop in these areas, this is how much capacity we have and you could interconnect quickly and being able to provide adequate feedback to the developers. We made mistakes along the way. Everybody made mistakes along the way where lots of renewable development was taking place. Everybody wanted interconnection studies. We did the studies and, of course, you needed to increase and beef up the system. What we didn't account for is the ISO was that 80 or 90 percent of the projects would actually not happen and you didn't need to beef up the system, but that slowed down project incorporation. So very, very close coordination between the grid operators and the developers and indeed identifying for the developers the areas where you can incorporate more renewables very quickly is key in order to provide that synchronization between project development and interconnection. The last thing you want is what I've heard happening in some of the European states is they have a wind power project that has developed, not transmission with in which to interconnect. So they've got to have generators operating those wind turbines so that they're actually working in not to have them just sit idle there and rust. So that is not something you want to happen. You want to have transmission and development happen hand in hand and make that as smooth and as predictable as possible. Well, this is also that's a question that leads to a further question from Allison in Bicife and Allison is asking if distributed energy would be a way for Brazil that you see the distribute energy solution, particularly rooftop solar as a means for Brazil to address some of its energy demand forecast into the future. And that's also at least your point regarding California and the installation over 8000 rooftop solar installations per month. How is California shifting or handling intermittency and the various issues related to distributed energy entering the system with such a rapid uptake of distributed systems? It's true and you can't stop it. I mean, a homeowner wants to install solar, they're going to install solar. You really shouldn't and you shouldn't be stopping this. We have an executive order that calls for all new construction on the residential side after 2020 to be zero net energy, which means every home will be generating electricity and that's OK. You also are going to have the same standard applied to commercial and industrial buildings starting in 2030. So new construction is going to shift towards incorporating energy and energy efficiency measures right from the get go. Like we incorporate super efficient windows, title 24, like we incorporate interconnectivity into the new construction now. This is something that I believe is key to developing worldwide. And especially in some Saharan countries or countries that have no electricity, the 1.2 billion people, if we're going to very quickly move them to an electrified system, it's probably not going to be necessarily a centralized grid right from the beginning, but a micro grid where solar on every roof, community solar, biomass, wind, storage, electric transportation, showcasing that in an island effect, you can achieve a quality of life, which of course brings then education in industry and enterprise much faster with distributed resources than centralized. So depending on pricing signals, Brazil is in a bit of a unique situation because over 90 percent of the country is already electrified. Prices are not very expensive. This is something that we saw in Argentina as well. So if you send the right pricing signals and the subsidies are not on what is being subsidized right now, the centralized resources, but some of the distributed resources, you're going to give people the incentive to not only self generate, but also utilize energy much more efficiently. So sending the right price signals in terms of what energy really costs the consumer has been a driver for the installation of solar in California. We don't see incentives playing such a big role now. When you're paying 30 cents a kilowatt hour for your energy, solar makes infinite sense. You're paying less. You're saving money. You've got energy efficiency. As you saw, energy efficiency is a huge player. We haven't had low growth since 2005. And even though the population has almost doubled, so it's actually a very key factor. So pricing signals are important. Availability of solutions are important. Financing is very key. And just incorporating the need for zero net energy into the construction portfolios and mandates is going to be something I think we're going to see increasing not only here, not only in the US and Europe, but worldwide. That's an interesting viewpoint, because I think one of the questions that would be interested to the Brazilian audience would be interested to notice what incentives have been most effective in California to encourage the rapid uptake, particularly of solar, given that that's the best resource in California. There's a great deal of interest in identifying whether those were state level renewable energy portfolio standards, where those federal incentives, such as federal tax credits, what do you see has been the biggest driver for renewable energy growth in the California system? It's a combination. Certainly the renewable portfolio standard initially, when renewables were more expensive alongside the feeding tariffs in Europe, was critical. We all paid a little bit more for the initial renewables that were developed and we all incorporated the resources, even though they were more expensive. But again, the beauty of a renewable portfolio standard or the feeding tariff and the beauty of renewable technology is that this is not a subsidy. Even though it's been called a subsidy, it's an incentive. The definition of an incentive is over time it's reduced or goes away. And that has happened. Incentives have been reduced by more than 90% worldwide and costs have been reduced by more than 80% as well correspondingly. So now renewables as a result of these incentives have become one of the cheapest alternatives and they have become an economic decision. One of the drivers in the US, of course, for large scale projects, as Berkshire will say, and other developers is the tax credit. The investment tax credit, of course, bring the cost down even more. So you can have power purchase agreements in California that are being signed at six cents and below, although the real price is more like the 7.9 cents that we're seeing in Argentina and other places. The price here is reduced by the tax credits and some of the efficiencies that we have as well, alongside the good resources in terms of solar. But the diversity is important. We do need to make sure that as we have incentives and we shape the incentives, it's not necessarily the lowest cost, but it's also the best fit. So you need to develop geothermal, you need to develop more hydro resources, more baseline resources than the renewable based. And you need to develop more storage, even if it's the most expensive storage, because if you're only using it two hours a day or two hours every other day, it makes sense to install a very expensive battery because it's still going to be cheaper to operate than a baseload power plant that you don't need to be operating 24 seven. So planning long term, integrating long term, working with our neighbors and working with the distribution systems is going to be very critical from here on after, because incentives and portfolios aren't going to be playing such a big role anymore. We are the lowest cost alternative. And whether you have a mandate or not in Iowa, they're transitioning to 80, 100 percent renewable energy just based on cost. We're going to see that happen on the West as well. And very interesting. And here in Brazil, as you know, they have the advantage of having over 70 percent of baseload power electricity generated by hydroelectricity. And so one of the questions you'd notice hydro conserved clearly is baseload. But in regards to energy storage, we received a question from Sife asking how energy storage, what is California doing in the world of energy storage and how is this California leading away in the cooperation of energy storage, particularly in non peak hours? Right. I mean, what Brazil has a huge advantage with the large scale hydro, because the large scale baseload hydro is also very flexible and can be used to balance wind and solar resources. So incorporating 20, 30 or 40 percent of wind and solar on top of the 40 percent hydro is actually a very symbiotic relationship. What we're seeing here in California alongside, we love hydro. We love the ability to have hydro. What we count in our portfolio standard is only 30 megawatts and below of smaller hydro projects that are part of the renewables. But the large scale hydro certainly plays a role as well. It is influenced by drought, so that has to be taken into account. But when you do have it, it's a very valuable resources. We're also focusing on the customer site on the utility side. So what types of storage projects are going to benefit a system that runs predominantly on renewables and you do need to have those incorporated. And we realize that storage is probably 15, 20 years back behind renewables. And storage is more expensive and we do need to have a scheme to incentivize it. So California launched an initiative where all utilities have to purchase 1,300 megawatts of advanced storage. This does not include large scale hydro because we consider that to be already commercially viable. This includes all cutting new technologies, whether it's flywheels, low batteries, batteries in itself or other creative ways for storing energy. We even have one company that is proposing to run an empty train up and down a hill. Very much like Pond Hydro, but instead of water going up, it's a train going up and then train cars coming down. It's an exciting proposal and they actually want a contract. So the utilities, when they ran the RFPs, not only purchased what they were mandated by law, but they purchased double or triple of what they were mandated because in specific sites and with specific customers, even the expensive storage made sense and it made sense in offsetting distribution costs and it made sense in optimizing the distribution system. So yes, we are investing. We're making sure that utilities are incorporating more expensive storage into the grid, finding where it's cost effective as well. We're all learning in the process, but we believe that now we're transitioning from supporting renewables as a new resources with incentive and bringing the cost out to achieving the same result, hopefully even faster on the storage side, where we're supporting new cutting edge technologies, achieve market penetration and reduce cost through volume. Thinking of storage, we received a further question in which California is compared to Brazil in the sense of looking at the potential for large scale renewable growth with the possibility of that growth being far from population centers. So it's kind of a two part question. One is California looking at areas for large scale growth, particularly in desert California, southern, southeastern California, that might be far from population centers, such as in Brazil. And if so, then how does that add to additional costs and or finance for large scale transmission and the possibility of future possibility of storage? This is where integration becomes very key and this is where integration is important because right now storage is expensive on the large scale and it's easier to beef up or have additional transmission build and and and actually transport the excess energy from where you have the great wind conditions or the great solar conditions on site to where it's needed. So we see a lot of large scale project development happening out in the deserts and that needs to be brought to the loan centers on the coast and also transported to some of our neighbors as well when they need it because of the time difference. We can actually shift renewable resources and cost effectively bring them to our neighbors through the energy and balance market as opposed to having to curtail. So definitely where the resources are is not always where the load is, which is why centralized, very efficient transmission systems do need to be constructed and that's something that we see in Brazil. That's something that we see here in California and the West. It's something that we see in Europe and in Germany. The wind, the wind resources are in the north, but the load is in the south. So beefing up transmission becomes key and the renewables. Great initiatives, which is actually an NGO that is a partnership between civic society and grid operators for building transmission has become very key in making sure that pathways are identified for cost effective and optimizing transmission in Europe as well. We're going to need to do that here. It's something that's going to need to happen pretty much around the world. And as we develop wind in Wyoming, Wyoming doesn't have such a great load. But if we're interconnected through the markets with Wyoming, certainly California can be a market for either Wyoming or New Mexico wind and vice versa, Wyoming and New Mexico and Arizona can take California solar resources and we can optimize the system across the board. Brazil is already integrated, so that's a huge benefit. You already have large scale transmission in place. That can certainly be beefed up and that can certainly be utilized as well. And it's as you incorporate and you integrate closer with your neighbors in the north, south, that would be something that should be taken into account because incorporating with neighborhood countries that can benefit from the large scale hydro resources that Brazil has as a balancing. Brazil can become the Norway of South America, which is what Norway does. Norway is 100 percent hydro and it balances the renewable loads in the rest of Europe and everybody wants to interconnect Norway. So there's definitely lessons to be learned and what we have discovered is there's no need to reinvent the wheel individually. We should be collaborating. We should be working together because we have a lot we can learn from Brazil. There's a lot that Brazil can learn from us and the Europeans. And collaboration is going to be key. You know, the question regarding long range transmission of power, particularly here in Brazil, leads to a question of investment and how California has been able to attract investment, particularly in large scale photovoltaic projects, but also leads to a question from Louise. She's also interested in investment in solar thermal or concentrated solar power. And so which may be a little bit more cutting edge or perhaps a risk here investment, but wanted to two parts. First, how has California been able to attract investment, particularly in large scale, utility scale solar projects? And the second, we talked about battery storage, but could you also speak a little bit about the two forms of solar technologies that Lisa mentioned, solar thermal and concentrated solar power and the role they're playing in California's renewable energy. OK, so first we were able to attract investment because again, when you've got the elements of transparency, longevity and consistency, which we had with the renewable portfolio standard and you have a need for those resources to come online to meet regulatory mandates. People know that their investment is secure because it's backed up by a power purchase agreement from a utility, which is a credit worthy entity. It has a 20 year contract. We don't see many merchant plans on the renewable side. We probably will see more. But this was fairly stimulated by PPAs and by options, which is what we're seeing happening in other parts of the world as well. The Europeans did it through a feed-in tariff and that, of course, gave stability the same way because it guaranteed interconnection and guaranteed implementation. And they don't have as much land area as we have here in California. Their systems are smaller and more distributed, but the amounts are very similar in terms of the incorporation of renewables. So having a stable regulatory framework is important and that really is key. Even though the prices are low and they have an economic edge, having that stability provides investors the comfort level to provide low cost investment and they feel that that investment is secure and it's long term. So it's it's bankable. So that is very key and very important. In terms of the resources, we've seen an overwhelming amount of solar photovoltaic come online because it's the cheapest and the most stable. We haven't seen as much solar thermal, not because solar thermal isn't as good a resource, it's just a little bit more expensive. And we actually did visit a solar thermal site here with the delegation from Recife geographically, it works in very specific areas. California is not necessarily ideal for solar thermal. It's a little bit more expensive. Brazil, some areas are OK. But if there's cloud covers, intermittent cloud covers that influences the systems as well. So it's a little bit more of a sensitive system and it doesn't work everywhere. It requires specific geographic locations. So for us, solar thermal and solar concentrators are just more expensive and not geographically as advantageous as solar PV, which is what we're seeing on the solar side. Excellent. You know, it's one of the questions that we've also received here in regards to various investments in the renewable sector in Brazil is how are renewable investors working with system operators, regulators to determine where to invest in California? Because a question here in Brazil is how do you make a determination where the solar resources or wind resources might be most attractive? And so that's a question that's asked how what is the role of government in and ensuring that the resources are properly identified and that way investment can be directed to those kind of optimal resources first. Or in California, as a reverse is the market taking a different approach as the government not been involved in identification of renewable resources. Initially, the government wasn't and we saw this here and we saw it in in Europe as well, but as you achieve higher penetrations and you don't want to have hazard development and you want to identify areas that you want to protect and you want to make sure that you're developing where you have the least impact in terms of resources, in terms of natural monuments, in terms of access to transmission, coordination between the government and the grid operators has become more important and it does make sense. I mean, if you're going to have large scale development and you want to make sure that your project is bankable, you want to develop it where you know that you're going to get interconnection. You know that that interconnection is not going to cost that much, or at least you have a credit predictable cost for the interconnection. So you know what your full cost is up front. The beauty of renewables is that the cost is up front. It's a technological investment and it's an upfront investment because your fuel is free and your maintenance costs are pretty low. So you want, if you're going to be making that upfront investment, it better be in a location that is the optimal location for that resource. Now, it may be where you're looking for the great solar installations, where you have the best solar insulation and you're close to the grid for a large scale project, certainly. But if you're an individual warehouse or you're an individual owner of a small scale facility, you have the landmass and you're avoiding high transmission costs, why not develop on site as well? So we've seen a mix. We've seen distributed generation develop on site where that makes sense for the individual customer and they're able to integrate it directly into their meters, whether that's a farm or a winery. Huge, huge amounts of solar going on wineries and on dairy farms as well. Or whether you're building a large scale 100, 200, 700 megawatt project and you're right next to the 500 wall transmission line and it's easy to build a substation and incorporate because there's room on that line that has already anticipated the construction of large scale projects. So Brazil identifying areas where it's advantageous to develop various resources, whether it's a good wind resource or a good solar resource and making those maps available to developers will actually make everybody's life easier, including the investors in having that predictability. And then what mix of technologies you're going to have is also going to be interesting if you can showcase to a demonstration as to where that mix can take place and I have to give a plug to Fernando Naronia, the island. And if you can bring up those slides where I receive them, we've got obviously a good audience from receive and this is an island that's close to receive as hard that is going to showcase moving to a carbon free system and be able to demonstrate the utilization of microgrids, advanced transportation, advanced generation, 100 percent renewables. It also happens to be a UNESCO site. So certainly UNESCO can be targeted as supporting the 100 percent renewable energy initiatives for all heritage sites. So this is going to be maybe a working laboratory and an action plan where we can showcase how California and US technologies can collaborate with the Brazilian environment to showcase a holistic approach on an island basis. Yeah, Fernando Naronia is a is certainly a jewel in Brazil and throughout the world. So I think that you should go visit. Absolutely, that David Nune from the National Renewal Energy Laboratory went and so we'd love to have increased work in Fernando Naronia in the future. And with that, Angelina, I wanted to to wrap the web chat and say thank you very much for supporting not only the web chat that the Climate Partners Brazil program through your visit and through your ongoing collaboration. And we will certainly look forward to remaining in close contact with you because California's leadership is definitely demonstrated not only to the Brazilian audience, but truly to a global audience that you can make rapid strides and renewable energy integration while maintaining grid stability and bringing costs down for consumers in a very short period of time. And so we certainly look forward to continuing this conversation. We encourage everybody to join the Climate Partners Brazil website. And with that, this is Paul Guiara signing off from the US Embassy in Brasilia and thank you again, Angelina.