Transcript FLORIDA INDUSTRIAL POWER USERS GROUP ANNUAL MEETING

FLORIDA PUBLIC SERVICE
COMMISSION
WORKSHOP ON RENEWABLE
ENEGY
On Behalf of
The Sierra Club, Inc.
PRESENTED BY:
E. Leon Jacobs, Jr.
Williams & Jacobs
January 19, 2007
FLORIDA ENERGY POLICY
● Driven More Prominently By Externalities
● Vast Scope Undefined Relative to Needs
● Challenged by Phenomenal Growth in
Demand
● Highly Vulnerable to Global
Markets In Disarray
FLORIDA’S ENERGY MARKET
● Explosive Growth in Consumption – As of
1/04
48,000 MW - Summer
51,000 MW - Winter
●Annual Growth rate: 900 MW - 1,500 MW per
year
● At Present Pace, Projected to Build
45 New 500 MW Plants by 2020
FLORIDA’S ENERGY MARKET
Transmission Constraints
US Department of Energy Transmission
Congestion Study
Finds High Probability for Congestion Due To
Projected Influx of New Power from:
- Nuclear ( 2 proposed plants)
- Coal ( 7 proposed plants)

FLORIDA’S ENERGY POLICY
Regulators and Policy-makers Challenged By:

(i)
(ii)
(iii)
(iv)
(v)
(vi)
Uncertainties in:
fuel prices
fuel transportation
capital costs
O&M expenses
emission constraints; and
decommissioning
Risks in :
(i) reliability
(ii) financing
(iii) technology; and
(iv) markets

FLORIDA’S RENEWABLES

Florida Policymakers Must Engage In A Systematic
Process To Plan Reliable Service At Reasonable
Rates

This Process Must Deal With Uncertainty and Risk In
A Transparent and Objective Fashion

The Sierra Club Recommends That The Florida
Public Service Commission Address Renewables In
the Context of an integrated portfolio management
initiative
FLORIDA’S RENEWABLES
PORTFOLIO MANAGEMENT
- energy resource planning utilizing a diverse, costeffective mix of energy resources, including
. supply-side (traditional and renewable) and,
. demand-side (DSM, efficiency) options…
for integrated resource planning in vertically
integrated, regulated utilities, and in deregulated
markets where they exist.
US Environmental
Protection Agency

FLORIDA’S RENEWABLES
PORTFOLIO MANAGEMENT
 CRITICAL DIFFERENCE
Portfolio Management provides for real assessment,
balancing and management of long-term issues to
minimize costs and risks.
RESULTS
Optimized mix of resources that stabilize prices to
ratepayers, and manage uncertainties, risks and costs.

RENEWABLES
INTERNATIONALLY
Electric Production From Renewables is Emerging Around the World,
But Still Low in the US, Even With Dramatic Reductions in Price of Wind
Nonhydro renewables, percentage share of electricity production, 2000.
By regional grouping

OECD total
2.0%

North America
2.0

Europe
2.1

Pacific
1.6
Selected countries

Iceland

Denmark

Finland

New Zealand

Germany

United Kingdom

United States
-
17.2%
16.7
12.3
8.9
2.5
1.3
2.1
Source: IEA, Renewables Information 2002 (Paris: OECD/IEA 2002).
FLORIDA’S RENEWABLES
Renewables Bring Important Benefits, and, as
With All Energy Resources, Pose Externalities,
Uncertainty and Risk
EX:
 JEA Biomass Project
 Offshore Wind Project
 Emissions
 Transmission
FLORIDA’S RENEWABLES
Most Prominent Strategies to Stimulate Renewables
Feed-In Laws
Specifies a guaranteed price via tariff, coupled with a utility
purchase obligation and planned interconnection.
Popular in Europe; Similar to PURPA Standard Offer

Renewable Portfolio Standards (RPS)
Specifies a target mix of renewable energy resources for
inclusion in a utility’s generation mix; growing popularity in
US; little emphasis on price of renewables.

FLORIDA’S RENEWABLES

Twenty three States (40% of US sales) have
enacted RPS
FLORIDA’S RENEWABLES

It Is Vitally Important That There Be A More
Complete Analysis of the True Costs, Risks
and Benefits Of Energy Resources Used To
Meet the Demand In Florida

Portfolio Management Is This Tool
FLORIDA’S ENERGY MARKET
● MOST SIGNIFICANT OPPORTUNITIES
-
Integrated Planning
Development of Demand-Side Strategies
Innovation in Energy Efficiency
Cultivation of Renewables and Distributed
Generation
FLORIDA’S ENERGY MARKET
MARGINALIZES
PORTFOLIO MANAGEMENT STRATEGIES
Alliance to Save Energy reports:
“Hundreds of untapped MW savings as a result
of underutilization of energy efficiency and
renewables”
BUSINESS CASE FOR PORTFOLIO
MANAGEMENT STRATEGIES IN FLORIDA
●
●
●
●
●
●
Demand Rapidly Outstripping Capacity of
Supply
Emergence of EE Technology
Growing Adoption of Renewables Strategies
Around the Country ( economies of scale)
Governmental Agencies and Other Large Users
Must Reduce Energy Costs
Environmental Benefits Are Valuable
High Priority for Reliability After Hurricanes
GROWING PUBLIC DEMAND FOR ENERGY
ALTERNATIVES IN FLORIDA
● Public Outcry Regarding Outages After
Hurricanes
● Chapter 2006-280, Laws of Florida (SB 888)
● Controversy Over Coal Plants
● Governor’s Hydrogen Initiative
● 2006 Florida Energy Plan
● National Energy Plan