Transcript ACCELERATED RENEWABLE ENERGY DEVELOPMENT …

California Energy Commission
California’s
Renewable Energy Program
Kate Zocchetti
Renewable Energy Program
California Energy Commission
October 18, 2007
California Energy Commission
California’s
Energy Sources
in 2005/2006
PETROLEUM (2005)
NATURAL GAS (2005)
ELECTRICITY (2006)
Source: www.energy.ca.gov/html/energysources.html
April 2007
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California Energy Commission
Renewable Energy in California
 For decades, California led the country and the world in
renewable energy procurement
 From its peak in early 1990s, renewable generation
declined amid market uncertainties
 In 1996, AB 1890 placed surcharge on electricity sold
by IOUs to be used to fund public interest programs,
including renewable energy
 Energy Commission designed Renewable Energy
Program, a subsidy mechanism to support renewable
development in a market environment
 This method for supporting renewables, however, was
impacted by the energy crisis of 2000 and 2001
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California Energy Commission
From the Energy Crisis to the
Renewables Portfolio Standard
California’s move to a restructured electricity
market and resultant energy crisis prompted
policymakers to pursue a new method to
encourage development of renewable power:
Renewables Portfolio Standard
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California Energy Commission
California’s Renewable Energy Goals
Estimated Statewide Renewables GWh/year
(Excluding Large Hydro)
120,000
33% by
2020
100,000
80,000
20% by 2010
60,000
20% by 2017
40,000
2006 10.9%
Renewables
20,000
2002 11.0% Renewables (RPS begins)
1983
1988
1993
1998
2003
2008
2013
2018
Year
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California Energy Commission
California’s Energy Action Plan
The energy crisis further underscored California’s economic reliance on
a stable energy market. Consequently...
 California’s energy agencies adopted the Energy Action Plan I in
2003 and EAP II in 2005 to guide energy policy decisions and
actions for CA’s growing energy demand.
 Top priorities in California’s loading order policy for electricity are:
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Increasing energy efficiency and demand response
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Meeting new generation needs first with renewable and
distributed generation resources.
 Governor Schwarzenegger’s energy policy promotes adequate,
affordable and reliable energy supplies and technologies that
protect and improve economic and environmental conditions. He
strongly supports the EAP’s loading order.
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California Energy Commission
Renewables Legislation
GOAL: Pursue investments in renewable resources to achieve
self-sustaining renewable energy supply for California.
1998 - 2006
 AB 1890 and SB 90 created the Renewable Energy Program and
directed the large investor-owned utilities to collect $540 million
from 1998 – 2001.
 AB 995 and SB 1194 extended collection of $135 million per year
through 2011.
 SB 1038 authorized the Renewable Energy Program to use funds
collected from IOU ratepayers from 2002 - 2006.
 SB 1078 established the Renewables Portfolio Standard that
requires IOUs to increase renewable purchases by at least 1% per
year to serve 20% of their retail sales by 2017.
 SB 704 required the Energy Commission to allocate $6 million to
electricity-generating facilities that increased their use of qualified
agricultural biomass during fiscal year 2003-2004.
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California Energy Commission
Renewables Legislation (cont’d.)
 SB 67, AB 200, and AB 2189 modified RPS eligibility
requirements.
 AB 135 authorized the use of an additional $60 million of future
Renewable Energy Program funds for the Emerging Renewables
Program.
 SB 1 statutorily authorizes and establishes guidelines for the
$3.35 billion California Solar Initiative (CSI), a solar installation
incentive program.
 SB 107 requires retail sellers of electricity to increase renewable
energy purchases by at least 1 percent per year with a target of
20% renewables by 2010.
 SB 1250 authorizes the Renewable Energy Program to use funds
collected from IOU ratepayers from 2007 – 2012.
 AB 32 requires that the state’s global warming emissions be
reduced to 1990 levels by 2020. Renewable energy plays a
significant role.
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California Energy Commission
California’s Electricity Supply in 2006
In-State Generation and Estimated Energy Imports by Fuel Type
Natural Gas
41.5%
Nuclear
12.9%
Wind
1.8%
Renewables
10.9%
Large Hydro
19.0%
Coal
15.7%
Solar
0.2%
Biomass
2.1%
Small Hydro
2.1%
(Includes Energy Imports)
Geothermal
4.7%
Source: 2006 Net System Power Report, Energy Commission Publication, #CEC-300-2007-007.
www.energy.ca.gov/2007publications/CEC-300-2007-007/CEC-300-2007-007.PDF
California Energy Commission
Renewable Energy Program Goals
Goal: Achieve a self-sustaining renewable energy supply for
California.
 Optimize public investment and ensure that the most costeffective and efficient investments in renewable resources are
vigorously pursued.
 Increase the quantity of California’s electricity generated by
renewable resources, while protecting system reliability,
fostering diversity, and obtaining the greatest environmental
benefits to the state.
 Identify and support emerging renewable energy
technologies with the greatest near-term commercial promise
that merit targeted assistance.
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California Energy Commission
Renewable Energy Program Goals
(cont’d.)
Renewables Portfolio Standard Goals
New Renewable Facilities Program
RPS goals inform the
policies of the other
elements in the
Renewable Energy
Program.
Existing Renewable Facilities Program
Emerging Renewables Program
Consumer Education Program
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California Energy Commission
Renewable Energy Program
2002–2006 Funding Allocations
$675 Million*
New Renewable Facilities
and RPS
51.5%
($348 M)
Existing Renewable Facilities
20%
Consumer Education
($135 M)
2%
($13 M)
Emerging Renewables
26.5%
($179 M)
*Dollars collected are estimated at an average of $135 million per year for five years. The total amount collected each year
is adjusted annually at a rate equal to the lesser of the annual growth in electric commodity sales or inflation, as defined by
the gross domestic product deflator.
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California Energy Commission
Renewable Energy Program
2007-2011 Funding Allocations
$750 Million*
New Renewable Facilities
and RPS
51.5%
($386 M)
Existing Renewable Facilities
10%
Consumer Education
($75 M)
1%
($8 M)
Emerging Renewables
37.5%
($281 M)
*Dollars collected are estimated at an average of $150 million per year for five years. The total amount collected each year
is adjusted annually at a rate equal to the lesser of the annual growth in electric commodity sales or inflation, as defined by
the gross domestic product deflator.
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California Energy Commission
New Renewable Facilities Program
Goal: Accelerate the addition of new renewable capacity to
meet California’s growing demand for electricity.

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Currently provides production incentives to 59 “new” instate renewable generating facilities.
Incentives capped at 1.5 cents per kilowatt-hour.
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Of the 59 active projects, 47 have been completed and are
producing electricity representing 489 MW of capacity.
More than $69 million in incentive payments has supported
about 7,545 gigawatt-hours of generation.
When completed, all 59 facilities will bring 809 MW of new
renewables capacity to California’s electricity grid.
Under RPS, will provide supplemental energy payments
(SEPs) for above-market costs of procuring renewable
energy.
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California Energy Commission
Existing Renewable Facilities Program
Goal: Encourage economic viability of existing renewable
projects.
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Provides production incentives to existing renewable
generation facilities.
Payments tied to market prices.
Eligible technologies: solid-fuel biomass, solar
thermal, wind.
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Has helped 273 existing renewable facilities remain
competitive or return to service by paying more than $249
million for 4,400 MW of renewable energy capacity.
Provided $6 million for 2004 Agriculture-to-Biomass
Program to improve air quality in CA’s agricultural areas.
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California Energy Commission
Emerging Renewables Program
Goal: Reduce costs and accelerate market acceptance through high
volume production of emerging renewable technologies.
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Provides rebates for purchasing and installing eligible
renewable energy systems to offset electricity needs at
homes or businesses.
Reduces up-front costs for customers.
Through 2006, eligible technologies were solar photovoltaic,
small wind, fuel cells using renewable fuels, solar thermal
electric. Effective 1/1/07, only small wind and fuel cells are
eligible.
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Provided $374 million for distributed PV and wind energy systems installed
on 25,680 homes and businesses, providing 113 MW of capacity.
Encumbered $49 million for 3,493 additional systems under construction, to
provide 18.2 MW.
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California Energy Commission
California Solar Initiative
GOAL: Move California toward a cleaner energy future by creating a
sustainable solar market in California.
Beginning 2007:
 California Solar Initiative, largest solar program of its
kind in the country, part of Governor Schwarzenegger’s
Million Solar Roofs Initiative
 $3.35 billion effort by CPUC, CEC and POUs
 Residential and nonresidential customers
 3,000 MW combined POU/IOU goal
 Solar industry self-sufficiency in 10 years
 Emphasis on energy efficiency
 High performance installations
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California Energy Commission
California Solar Initiative (cont’d.)
CPUC Program
Commercial,
Industrial, Existing
Residential
CEC Program Publicly-Owned
New Residential Utility Programs
Eligibility
Construction
Requirements
(NSHP)
under Development
$2 Billion*
$400 Million
$784 Million
*Additional $100 Million for Solar Thermal and Solar Water Heaters plus
$50 Million for Solar R&D
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California Energy Commission
New Solar Homes Partnership
GOALS:
 400 MW installed capacity by end of 2016
 All solar systems must be highly energy efficient and high
performing
 Solar on 50% of new homes
 Incentive of ~$2.50/watt or more based on
expected performance
 Provides assistance to builders
 Requires 15% higher energy efficiency than
state building standard (Title 24)
 New residential construction only: new
homes/developments, Affordable Housing
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California Energy Commission
Consumer Education Program
GOALS
 Raise consumer awareness about renewables and their benefits
 Increase purchases of emerging technologies
 Develop renewable energy education partnerships
 Track and verify renewable energy procurement
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Provides information to California consumers to
help build a market for renewable energy.
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Supports market development of emerging
renewables technologies.
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Provided over $7 million for market research,
21 outreach and demonstration grant
projects, and 3 public awareness campaign
contracts.
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California Energy Commission
What is WREGIS?
Western Renewable Energy Generation
Information System
 A voluntary, independent renewable energy registry and
tracking system for the Western Interconnect region that:
– Uses verifiable renewable energy generation data
– Creates renewable energy certificates (WREGIS certificates)
– Accounts for transactions involving certificates
– Supports voluntary and regulatory markets for certificates
 WREGIS launched June 2007
 Retail sellers and renewable facilities participating in the
California RPS will be REQUIRED to register with and use the
WREGIS by January 1, 2008.
– WREGIS fees are being waived for 2007!
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California Energy Commission
Attribute Tracking Systems
NEPOOL GIS
MRETS
NY GTS
NJ SRECS
RRC
WREGIS
PJM GATS
ERCOT
Source: Center for Resource Solutions, 2006
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California Energy Commission
California’s
Renewables Portfolio Standard (RPS)
GOAL: Increase the diversity, reliability, public health and
environmental benefits of California’s energy mix.
 RPS signed into law in 2002 assigning roles to
Energy Commission, CPUC, and POUs.
 Current legislative goal of 20% of retail sales from
renewables by 2010, with increase by at least 1%
per year.
 Governor Schwarzenegger’s expanded goal to
33% by 2020.
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California Energy Commission
DSIRE: www.dsireusa.org
September 2007
Renewables Portfolio Standards
MN: 25% by 2025
(Xcel: 30% by 2020)
*WA: 15% by 2020
ME: 30% by 2000
VT: RE meets load
growth by 2012
ND: 10% by 2015
WI: requirement varies by
utility; 10% by 2015 goal
MT: 15% by 2015
OR: 25% by 2025 (large utilities)
☼ NH: 23.8% in 2025
MA: 4% by 2009 +
1% annual increase
RI: 16% by 2020
5% - 10% by 2025 (smaller utilities)
CT: 23% by 2020
☼ *NV: 20% by 2015
IA: 105 MW
☼ CO: 20% by 2020 (IOUs)
*10% by 2020 (co-ops & large munis)
CA: 20% by 2010
10% by 2017 - new RE
☼ NY: 24% by 2013
IL: 25% by 2025
MO: 11% by 2020
☼ NC: 12.5% by 2021 (IOUs)
☼ AZ: 15% by 2025
10% by 2018 (co-ops & munis)
☼ NJ: 22.5% by 2021
☼ PA: 18%¹ by 2020
☼ MD: 9.5% in 2022
☼ *DE: 20% by 2019
☼ DC: 11% by 2022
☼ NM: 20% by 2020 (IOUs)
*VA: 12% by 2022
10% by 2020 (co-ops)
TX: 5,880 MW by 2015
HI: 20% by 2020
State RPS
☼ Minimum solar or customer-sited RE requirement
* Increased credit for solar or customer-sited RE
¹PA: 8% Tier I / 10% Tier II (includes non-renewables)
State Goal
Solar water
heating eligible
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California Energy Commission
CEC-CPUC RPS Collaboration
CEC ROLE
 Certify renewable facilities as
eligible for the RPS.
 Design and implement
accounting system to track and
verify RPS compliance.
 Distribute Supplemental
Energy Payments.
CPUC ROLE
Oversight of IOU procurement:
 Approve procurement plans.
 Set baselines and targets.
 Develop market price referent.
 Develop least-cost-best-fit
process to evaluate bids.
 Set rules for flexible compliance.
 Standardize contract terms.
 Approve/ reject contracts.
 Ensure RPS competitiveness.
Oversight for other “retail sellers.”
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California Energy Commission
RPS Eligible Technologies
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Biomass
Biodiesel
Conduit hydro
Fuel cells using
renewable fuel
 Digester gas
 Geothermal
 Landfill gas
 Municipal solid waste
conversion
 Ocean wave, ocean
thermal, tidal current
 Photovoltaic
 Small hydro
 Solar thermal electric
 Wind
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California Energy Commission
Renewable Development Goals
and Statewide Potential 262,150 GWh/yr*
108,000 GWh/yr
56,160 GWh/yr
20% by 2010
33% by 2020
Technical Potential
*Estimated potential for other WECC states is 3.7 million GWh/yr
Source: Renewable Resources Development Report and Implementing California’s Loading Order for Electricity Resources
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California Energy Commission
IOU Progress toward
20 Percent Renewables by 2010
Percent Renewables
PG&E
SCE
SDG&E
IOUs
Combined
Total
Statewide
2001
2004
2005
2006
8.9%
14.8%
1.0%
11.6%
18.2%
4.3%
11.9%
17.2%
5.2%
11.9%
16.0%
5.3%
10.9%
13.9%
13.7%
13.1%
10.5%
10.1%
10.7%
10.9%
Note: IOU percentages based on retail sales; Statewide percentages based on generation.
Sources for 2001, 2004 and 2005 data: California Energy Commission, August 7, 2007, Renewables Portfolio Standard Procurement
Verification Report (Tables 7, 15, and 20), CEC-300-2007-001-CMF, located at www.energy.ca.gov/2007publications/CEC-300-2007001/CEC-300-2007-001-CMF.PDF. *2006 data was submitted by the IOUs in RPS Track Forms, to be verified in the forthcoming 2006
RPS Procurement Verification Report. Total statewide percentages include generation data from the three large IOUs, electric service
providers, small and multi-jurisdictional utilities, and local publicly-owned utilities. The data source for the total statewide percentages
is the 1983-2005 California Electricity Generation database located at www.energy.ca.gov/electricity/ELECTRICITY_GEN_19832005.XLS. Although the total statewide data is incomplete because some entities have failed to report, it represents data from entities
serving approximately 95 percent of total state retail sales.
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California Energy Commission
California IOU Renewable Progress
20.0%
18.0%
16.0%
14.0%
14.8%
Southern California Edison
12.0%
16.0%
11.9%
10.0%
Pacific Gas & Electric
8.9%
8.0%
6.0%
5.3%
4.0%
San Diego Gas & Electric
2.0%
1%
0.0%
2001
2003
2004
2005
2006
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California Energy Commission
IOU RPS Contracts by Technology (MW)
PG&E
SCE
SDG&E
Total
Wind
331
1,939-2,301
338
2,609-2,971
Biogas
50– 55
8–9
16
74 - 80
Biomass
45 – 65
44 – 69
20
109 - 154
Geothermal
242 – 370
80 – 220
20
342 - 610
Small
Hydropower
1
0
5
6
Solar Thermal
554
500 – 850
399 – 999
1,452 – 2,402
Solar
Photovoltaic
7
1
0
8
1,228 – 1,381 2,572 – 3,451
798-1,398
4,598-6,230
TOTAL
Source: California Energy Commission, Database of IOU Contracts for Renewable Generation, August 6, 2007 update,
www.energy.ca.gov/portfolio/IOU_CONTRACT_DATABASE.XLS.
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California Energy Commission
RPS Certification
 534 facilities are certified as RPS eligible representing
7,453 MW of capacity
– 71 facilities are pre-certified representing 7,654 MW of proposed new
capacity.
Fuel
Biogas
# of Facilities
MW
4
7
39
837
Conduit Hydro
8
16
Digester Gas
9
24
Geothermal
43
2,210
Landfill Gas
45
247
MSW
2
27
PV
3
0.023
254
1,246
9
379
118
2,460
Biomass
Small Hydro
Solar Thermal
Wind
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California Energy Commission
Barriers to Achieving RPS Goals
 Inadequate transmission infrastructure to
connect remotely-located renewable resources
 Binding 33% goal needed for all retail sellers
 Uncertainty regarding whether projects with SEPs
awards will be able to obtain project financing
 Complexity and lack of transparency in RPS process
 Insufficient attention to the possibility for contract
failure and delay
 Lack of progress in repowering aging wind facilities
 Unclear requirements for POUs
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California Energy Commission
Recommendations to Reach
20% by 2010
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Provide transmission access
Improve financeability of SEPs
Enforce penalties for noncompliance
Increase transparency
Incorporate risk of contract failures and delays
Require bilateral contracts at or below MPR
Use financial incentives
Use consistent natural gas price forecasts
Encourage repowering of aging wind facilities
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California Energy Commission
Long-Term Strategies to Reach
33% by 2020
California’s aggressive greenhouse gas reduction goals place
added importance on achieving 33% by 2020.
 Transmission: streamline process, improve CAISO
queue, cost allocation
 Integration of nondispatchable & intermittent renewables
 Capture full benefits of renewables in MPR and/or joint
CPUC-CEC process to consider feed-in tariffs
 Establish market-based mechanisms to value renewable
energy benefits; e.g., GHG adder
 Evaluate potential structural changes to SEP process
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California Energy Commission
Additional Information
Web Sites:
 Renewable Energy Program
www.energy.ca.gov/renewables/index.html
 New Solar Homes Partnership/California Solar
Initiative
www.gosolarcalifornia.ca.gov
 California’s Consumer Energy Center
www.consumerenergycenter.org
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California Energy Commission
Thanks for visiting California!
Kate Zocchetti
Renewable Energy Program
(916) 653-4710
or e-mail:
[email protected]
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