Transcript Preliminary Inputs for Wisconsin RPS Analysis

Renewing America’s Economy
From Crisis to Opportunity
Steve Clemmer
Research Director, Clean Energy Program
Union of Concerned Scientists
www.ucsusa.org
The Southeast & Mid-Atlantic
Regional Wind Summit
Raleigh, NC
September 19, 2005
The problem:
Surge of new natural gas plants…
Annual Additions to Electric Generation Capacity
by Fuel, 1950-2002
80
70
50
40
30
20
10
20
00
19
90
19
80
19
70
19
60
0
19
50
Gigawatts
60
Coal and Other Fuels
Oil and Gas
Source: EIA, Annual Energy Outlook 2004
While US gas productivity declines…
28% Decline in 2003
Source: Richard Levitan: IHS Energy, Petroleum Information Corp., EOG Resources
Daily price history of 1st-nearby
NYMEX natural gas futures contract
NYMEX
natural gas
futures strip
from 09/13/2005
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
Source: LBNL
13
12
11
10
9
8
7
6
5
4
3
2
1
0
 8.8 Bcf or 17% of U.S. natural gas production capacity initially lost
due to Hurricane Katrina
Nominal $/MMBtu (Henry Hub)
Hurricane Katrina
13
12
11
10
9
8
7
6
5
4
3
2
1
0
1990
Nominal $/MMBtu (Henry Hub)
…Helping to drive gas higher & higher
High gas prices are hurting
the economy
 EIA: 52% increase in total consumer natural gas
expenditures this upcoming winter
– 71% increase in gas home heating bills for the Midwest
– 31% increase in fuel oil costs for the Northeast
– 17% increase in residential electricity bills for the South
 Cut U.S. economic growth by 2.1% a few years ago
– Federal Reserve Bank of Dallas
 Forcing industrial users like the petrochemical
industry to move their operations overseas.
– U.S. chemical workers lost ~78,000 jobs between 2000-2004.
– Wall Street Journal, 2/17/04.
 Farmers are also feeling the pain because natural gas
accounts for 90 percent of fertilizer costs
Increasing dependence on
gas imports from overseas…
U.S. Natural Gas Net Imports, 1990-2025
History
5
Projections
LNG
4
3
Canada
2
1
Mexico
0
1990
1995
2000
2005
2010
2015
2020
2025
-1
Source: EIA, Annual Energy Outlook 2004.
New LNG terminals and tankers will
increase our vulnerability
Leading to new coal plant proposals
and higher carbon emissions
 17 advanced
IGCC plants
 No plans to
capture and
store CO2
 Economic
risk of future
CO2 limits
Coal has other important
fuel cycle impacts
 Mountaintop removal mining in West Virginia
Coal mining jobs declining…
http://www.eia.doe.gov/oiaf/aeo/figure_105.html
Source:
EIA
Coal imports a drain
on many state economies
Expenditures for imported coal for electricity
*
$>1 billion
$601 million
- $1 billion
$201-$600
million
0-$200
million
*Data not available
Source:
EIA
Myth: The Southeast isn’t windy
Wind Power Class at 80m
Class 7
Class 6
“The greatest previously uncharted reservoir of wind power in the
continental United States is offshore and near shore along the
southeastern and southern coasts”
Source: Archer C, Jacobsen M, 2003
North Carolina has significant
wind potential
Offshore Wind Technical Potential
New England
Mid Atlantic
California
Pacific NW
300,000
250,000
MW
200,000
150,000
100,000
50,000
0
shallow
deep
5-20 nautical miles
shallow
deep
20-50 nautical miles
Total – Shallow: 97,975 MW (8.0% U.S. electricity)
Deep: 809,725 MW (66.0%)
Source: Musial W, Butterfield S., 2004
Offshore Wind Costs are Falling
Source: NREL/DOE Wind Program????
Renewable Electricity Standards
Nevada: 20% by 2015,
solar 5% of annual
New York:
Minnesota: 19% by 2015*
24% by 2013
Wisconsin:
Iowa: 2% by 1999
2.2% by 2011
Illinois: 8%
Montana:
by 2013**
15% by 2015
Maine: 30%
by 2000
MA: 4%
by 2009
RI: 16%
by 2019
CT: 10% by 2010
NJ: 6.5% by 2008
DE: 10% by 2019
Maryland:
7.5% by 2019
Washington D.C:
11% by 2022
Pennsylvania:
8% by 2020
California:
20% by 2017
Arizona: 1.1% by
2007, 60% solar
New Mexico:
Texas: 5,880 MW
10% by 2011
(~4.2%) by 2015
Colorado:
10% by 2015
Hawaii: 20% by 2020
21 States +
D.C.
*Includes requirements adopted in 1994 and 2003 for one utility, Xcel Energy.
**No specific enforcement measures, but utility regulatory intent and authority appears sufficient.
Most New Wind Capacity Installed
in States with Renewable Standards
New Wind Capacity, 1998-2003 (MW)
283
66
537
235
0.2
283
53
44
0.2
634
223
207
1
129
470
14
48
2
3.6
50
66
114
176
1,264
0.1
2
 74% (3,620 MW)
in states with RES
1
Source: UCS & AWEA
Renewable energy
expected from state standards*
42,000
36,000
24,000
California
CO2 reductions: 77.1 Million Metric Tons
Equivalent to:
- 3.7 billion more trees
- 11.5 million less cars
18,000
12,000
6,000
0
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Megawatts
30,000
New renewable energy supported:
- 32,000 MW by 2017
Hawaii
*Projected development assuming states achieve annual RES targets.
**Assumes regulatory enforcement of voluntary RES.
Nevada
AZ & NM
CO & MT
Texas
Minnesota
IA & WI
Illinois**
Maryland
Pennsylvania
DC & DE
New Jersey
New York
CT & RI
MA
Maine
Texas Wind Spurs New Jobs
and Rural Development
 Texas standard resulted in 913
MW of new wind in 2001
 supported 2,500 jobs
 $11.7 mil./yr in tax revenues to
school districts in 10 counties
Source: Virtus Energy
Source:
Research
Virtus,Associates,
2003
2002.
Wind Power Creates
New Manufacturing Jobs
 90 companies in 25 states currently
mfg wind turbine components
 Southeast & Mid-Atlantic have
potential to create 38,260 new jobs
– Assuming 50 GW of wind capacity in US
– 9 states in top 20
 Foreign companies are building
wind turbine mfg plants in US
• Spanish company Gamesa is building new
plant in PA, creating 1,000 new jobs over
next 5 years & $40 mil. in new investment
• Gamesa CEO credits PA renewable
standard, creating market for up to 3,600
MW of new wind
 GE manufactures blades in
Pensacola FL and has office in
Greenville, SC
New Jersey,
2,920
Florida, 3,371
Pennsylvania,
7,622
Virginia, 3,386
South Carolina,
4,964
Georgia, 3,532
Alabama, 3,571
Tennessee,
4,233
REPP, 2004
North Carolina,
4,661
Wind dominates under national
renewable electricity standard
Wind Capacity under a National Renewable Electricity Standard
160
140
20% by 2020 RES
 Wind
generation =
6-10% of US
electricity use
by 2020
10% by 2020 RES
Gigawatts
120
100
80
60
40
20
0
2005
2010
2015
2020
2025
Source: UCS, using EIA model
Renewable Energy Creates Jobs
Renewable Energy vs. Fossil Fuel Jobs, 2020
(20 percent by 2020 RES)
20% by 2020 RES
400,000
10% by 2020 RES
200,000
355,390
150,000
197,910
200,000
Jobs
Jobs
300,000
190,180
98,960
100,000
50,000
100,000
0
0
Renewable Energy
Fossil Fuels
Renewable Energy
Fossil Fuels
 Nearly twice as many
jobs as fossil fuels
Source: UCS, using EIA model
Renewable energy conserves
natural gas supplies
16
Trillion cubic feet
14
12
20% by 2020 RES
10% by 2020 RES
10
= 1/4 of
residential
gas use
8
6
4
2
0
2005
2010
2015
2020
Source: UCS, using EIA model
Renewable energy saves electric &
natural gas consumers money
Cumulative Natural Gas and Electricity Bill
Savings (10 percent by 2020 RPS)*
30
$22.8 billion electricity savings
EIA: 10% RES
saves $23 billion
20% RES saves
$49 billion by 2020
Natural Gas Bill Savings
25
Billion 2002$
$5.4 billion gas savings
Savings in all
customer classes:
Res.: $7.9 bil
Comm.: $11.3 bil
Ind.: $9 bil
Electricity Bill Savings
20
15
10
5
0
2005
Source: UCS, 2004.
2010
2015
2020
*Excludes Transportation.
All regions of the
country save money
Cumulative Energy Bill Savings* by U.S. Census Region,
(10 percent by 2020 RES)
New England:
$1.4 billion
Northwest:
$1.7 billion
West North
Central:
Mountain:
$1.8 billion East North
Central:
$6.1 billion
$2.8 billion
California:
$4.3 billion
East South
West South Central:
$1.6 billion
Central:
Mid-Atlantic
$4.0 billion
South Atlantic:
$4.0 billion
$10.5 billion
Total cumulative savings = $38 billion by 2025
Source: UCS, 2004.
Renewable Energy Reduces Emissions
and Compliance Costs
Carbon Dioxide Emissions, U.S. Power Plants
Million Metric Tons of CO2
3,500
3,000
2,500
2,000
1,500
Business as Usual
1,000
Reduces growth
in U.S. CO2
emissions by 59%
20% by 2020 RES
500
0
2005
2010
2015
2020
Source: UCS, using EIA model
More votes for renewable fuels vs.
electricity standard
Both policies require a percentage of energy from renewable sources…but they have received
different levels of support at the federal level:
Senate votes to amend the 2005 Energy Bill:
RFS* - 70 Votes
RES** - 52 Votes
*Votes in favor of the Domenici
amendment.
Two Votes
**Votes in favor of the
Bingaman/Coleman amendment.
One Vote
No Votes
The RFS by 2012 was passed with the final Energy Bill. The
RES was rejected by the House in conference committee.
Conclusions
 Wind and other renewable energy sources can conserve natural
gas supplies and provide a hedge against future prices increases
and supply shortages
 Wind power can provide insurance against future limits on
greenhouse gas emissions
 Wind power can provide significant energy diversity and security
benefits
 Wind power can strengthen the US economy and rural areas
 Renewable energy can meet a significant portion of US electricity
needs and save consumers money
 Efficiency AND renewables = best combination. UCS Clean
Energy Blueprint: up to 31% less natural gas; 27% reduction in
gas price
 Any policy evaluation of RE should extend beyond the power
sector, to include gas sector impacts as well