Transcript No Slide Title
Nebraska Workshop: Models for Wind Power Development
Ed DeMeo Renewable Energy Consulting Services, Inc.
DOE-NREL Liaison to UWIG and NWCC (EPRI Renewables Programs, 1976 - 1998) November 12, 2002 Lincoln, Nebraska
Objectives and Schedule
Overall Objective: Develop models to spur the development of Nebraska’s wind energy resources, either for in-state consumption or for sale to others
Native American/Tribal Model Large Public Power District Model Single Rural Electric System Model Multiple Small Municipal System Model
Objective for Today:Discuss background and initial ideas; obtain input from Nebraska stakeholders
Schedule: Nebraska Wind Development Models Report by 12/31/02 (draft) and 3/31/03 (final)
Working Group meeting November 12 Draft models distributed to working Group by December 6 Working Group meeting December 12
Items to Address
Financing methods
Statutory issues
Governance issues
Potential federal legislation impacts
Non-customer consumption issues
Cost analysis; closing the gap
Possible problems or barriers
Electric Power in Nebraska
Publicly owned system
Degree of public control?
Contrast with investor-owned utilities and state PUCs
Reliable electric power at lowest cost
How is cost defined?
Primarily coal (from Wyoming)
About $200 million/year to Wyoming for coal About 6% hydro from WAPA
No privately owned generation
No access to tax credits
How are needs for new power being addressed?
Personal Perspective
Nebraska: Legacy of electric-power leadership
Job done well historically
Many IOUs in other states have similar history
Public had been content to leave job to electric utilities
Major change initiated in early 1990s
Public questioning of the power business; heavy PUC input Restructuring movement initiated; jury still out Most IOUs weakened in stature and financially
Public power least affected so far; Nebraska probably least so
Public power decisions still being made by top management
Weak connection to the public; no PUC, no city council
Citizens need stronger connection to the power sector!
Public Opinions on Renewables in Nebraska
NPPD Customer Poll: strong support for adding renewables to the generation mix
NPPD top management reports that customers not interested in renewables
Explanation of discrepancy?
Response to green power programs
Marginal. Why?
How can customer attitudes be accurately determined and have an impact?
Where Does Wind Make Business Sense?
Texas: careful public polling convinced utilities and regulators of customers’ desire for clean energy
Legislature passed renewables portfolio standard in 1999 2000 MW new renewables by 2009; 900+ MW wind already
Minnesota: state mandate of wind (825 MW) as condition for nuclear waste storage
Colorado: green priced product (about 30 MW), followed by 152 MW rate-based at direction of PUC as lowest cost option in an all-source bid
Iowa: legislative mandate for 100+ MW of wind
Total now exceeds mandate Tremendous support in the farming community Currently limited by transmission constraints
Where Does Wind Make Business Sense?
Wyoming: Terrific winds coupled with regulatory support
Pennsylvania: successful restructuring resulting in retail competition for electricity
Several plants in (about 50 MW); another 100+ MW nearing installation Substantial customer base for green power
North Dakota: property tax incentives; initiative from legislators reflecting public interest
Kansas: 100+ MW, property tax exemption by state law
Developers make voluntary payments to communities
How Can Wind Make Business Sense in Nebraska?
Policies that reflect public wishes without being fiscally irresponsible
These have gotten the ball rolling in most states with wind development
Allow wind-plant ownership by entities that pay taxes
Take advantage of Production Tax Credit (1¢/kWh over 30 years) Legislation required?
Broaden definition of cost of electrical energy
Include allowance for health costs, diversity, security,etc.
Sell environmental attributes in green-tag markets
Fledgling markets developing, values around 2¢/kWh today
Include credit for in-state economic development and revenue retention
Institute a Nebraska Renewable Portfolio Standard (RPS)
Spread transmission costs over all customers
Straw-man Scenario
Add a new combined-cycle power plant
CC plant has gas (combustion-turbine) and coal (steam-turbine) sections Use of CT waste heat in steam cycle increases overall plant efficiency Requires capital investment in both gas and coal equipment Payments for fuel leave the state
Alternative approach: Add wind plus CT
Coal plant investment avoided No coal fuel payments leave the state Capital investment in wind instead; rural economic and tribal benefits No out-of-state fuel payments for wind CT efficiency reduced somewhat; gas still imported CT can compensate to a degree for wind fluctuations CT may already exist in the system Re-dispatch the entire system to optimize with the new mix
Don’t force the wind plant to fit into a conventional box; analyze the new system as a whole