19 march 2013

Making Clean Local Energy Accessible Now 19 March 2013

Craig LewisExecutive DirectorClean Coalition650-204-9768 office650-796-2353 [email protected]

State Solar IncentivesWholesale (ie, utility-side interconnect)

Making Clean Local Energy Accessible Now

2

Clean Coalition – Mission and Advisors

Clean Coalition – Mission and Advisors

Board of AdvisorsJeff Anderson

Co-founder and Former ED, Clean Economy Network

Josh BeckerGeneral Partner and Co-founder, New Cycle Capital

Jeff BrothersCEO, Sol Orchard

Jeffrey ByronVice Chairman National Board of Directors, Cleantech Open; Former California Energy

Commissioner (2006-2011)

Rick DeGoliaSenior Business Advisor, InVisM, Inc.

Mark FultonManaging Director, Global Head of Climate Change Investment Research, DB Climate Change Advisors,

a member of the Deutsche Bank Group

John GeesmanFormer Commissioner, California Energy

Commission

Patricia GlazaPrincipal, Arsenal Venture Partners; Former

Executive Director, Clean Technology and Sustainable Industries Organization

Amory B. LovinsChairman and Chief Scientist, Rocky Mountain

Institute

L. Hunter LovinsPresident, Natural Capitalism Solutions

Dan KammenDirector of the Renewable and Appropriate Energy Laboratory at UC Berkeley; Former Chief Technical

Specialist for Renewable Energy and Energy Efficiency, World Bank

Fred KeeleyTreasurer, Santa Cruz County, and Former Speaker

pro Tempore of the California State Assembly

Felix KramerFounder, California Cars Initiative

Ramamoorthy RameshFounding Director, U.S. Department of Energy

SunShot Initiative

Governor Bill RitterDirector, Colorado State University’s Center for the

New Energy Economy, and Former Colorado Governor

Terry TamminenFormer Secretary of the California EPA and Special

Advisor to CA Governor Arnold Schwarzenegger

Jim WeldonCEO, Solar Junction

R. James WoolseyChairman, Woolsey Partners, and Venture Partner,

Lux Capital;Former Director of Central Intelligence

Kurt YeagerVice Chairman, Galvin Electricity Initiative; Former

CEO, Electric Power Research Institute

MissionTo accelerate the transition to local energy systems through innovative policies and programs that deliver

cost-effective renewable energy, strengthen local economies, foster environmental sustainability, and enhance energy security


3

Clean Coalition Vision = DG+DR+ES+EV+MC2


4

Clean Coalition Overarching Objectives

From 2020 onward, at least 50% of all new electricity generation in the United States will be from local sources.

Locally generated electricity does not travel over high voltage transmission lines to get from the location it is generated to the area it is consumed.

From 2020 onward, at least 80% of all new electricity generation in the United States will be from renewable sources.

By 2020, policies and programs are well established for ensuring successful fulfillment of the other two objectives.

Policies reflect the full value of local renewable energy.Programs prove the superiority of local energy systems in terms of economics, environment, and resilience.


5

Wholesale DG is the Critical & Missing Segment

Retail DGServes Onsite

Loads

Central Generation Serves Remote Loads

Distribution Grid

Transmission Grid

Project Size

Wholesale DGServes Local Loads

Behind the Meter


6

WDG Delivers German-scale Solar Markets

Solar Markets: Germany vs California (RPS + CSI + other)

0

5,000

10,000

15,000

20,000

25,000

2002 2006 2007 2008 2009 2010 2011

CaliforniaGermany

Germany added nearly 15 times more solar than California in 2011,even though California’s solar resource is 70% better!!!

Sources: CPUC, CEC, SEIA and German equivalents.

Cum

ulati

ve M

W


7

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 20120

10

20

30

40

50

60

70

80

90

100SMUD Cumulative Installed Solar

MW

Through its CLEAN Program, SMUD achieved nearly 100 MW of ratepayer-

neutral local installed solar capacity within 2 years. If this success were ex-tended across California, it would rep-resent 2.5 GW of Wholesale Distrib-

uted Generation (WDG) solar capacity within 2 years.

98.5 MW

93 kW

SMUD CLEAN Program: Showing the way in U.S.


8

What is an Incentive for Wholesale PV?

Program capacityRPSFITClean Local Energy Accessible Now (CLEAN) Programs

FIT + streamlined interconnection

RFP / Auction

Standardization and transparencyStandard, must-take PPAStreamlined interconnection

Pre-mapping, utility pays, cost-averaging

Deterministic pricing

Equal treatmentPassive loss rules (IRS Section 469 unfair to renewables)Property tax exemptions (Texas unfair to wholesale)


9

Where are Best Incentives for Wholesale PV?

CLEAN / FIT Programs replicating across the United StatesLong Island, Fort Collins, Vermont, etc

CLEAN / FIT Programs in California

RAM in California (limited by interconnection prerequisites)

Georgia Power CLEAN / FITRFO

Promising legislation / signalsArkansasIowaMinnesotaOregonMichigan


10

CLEAN Programs Replicating across U.S.


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CLEAN / FIT Programs in California

Legislative edict:AB 1969 – Initial program started in 2008 (500 MW)SB 32 – Follow-on program passed in 2009 and to be implemented in mid-2013 (250 MW added to AB 1969)

Only about 150 MW remaining 110 MW PG&E40 MW SDG&E0 MW SCE

SB 1332 – Largest POUs must launch SB 32 programs by July 1 2013SB 1122 – Added 250 MW of biopower to SB 32

About 1.2 GW of total program capacity but only about 300 MW of PV-eligible capacity still available


12

Local CLEAN Programs in California

SB 1332 ApplicableLADWP: 100 MW initial program. Opening traunche was 5x oversubscribed. Will make 20 MW available every 6 months. Additional 50 MW authorized but TBD. Eric Garcetti promises 600 MW.Riverside, Anaheim, Turlock Irrigation District (TID), Modesto Irrigation District (MID): Unclear whether / how programs will be improved based on new provisionsImperial Irrigation District (IID): Program announced but no detailsGlendale: Hired consultant to calculate long-run avoided cost. Considering bigger program than minimum requiredClean Coalition working directly with POUs through existing CLEAN Outreach initiative

Other SMUD – 100 MW initial program, fully COD by yearend-2012Palo Alto CLEAN – Launched mid-12 (4 MW), Price increase early-13CCA: Marin Energy Authority (MEA) and Clean Power SF


13

Renewable Auction Mechanism (RAM) in CA

PG&E SCE SDG&E

Original RAM Decision 421 498 81

Expanded Allocation(after shifting PV program MW)

421 723 155

Signed and Approved PPAs 203 364 53

Cancelled PPA 20 90 0

RAM 3 Targets (approvals sought in April/May)

132 230 52

Remaining MW (assuming RAM 3 Targets met)

106 219 50

RAM 3 Auction was held in Dec 2012 – Results not yet publicFinal Auction (RAM 4) should be in May/June 2013


14

Georgia Power Advanced Solar Initiative

Georgia PowerClass: Small and Medium-scaleCapacity: 90 MW (45 MW/year for 2 years)

Accepted application for first allotment from 1-11 March 2013

Project Sizes: Two tiers, 1-100kW and 100kW-1MWContract Rate: $0.13/kWh fixed for 20 years + REC valueReason for Rate: Avoided costREC Value: Project owner maintains REC ownershipPPA: The PPA was published 12/18/12Interconnection: Quasi-wholesale: Projects are interconnected on the retail side but generation is metered and sold wholesaleDeveloper Limit: <9 MW of program allocation


15

Georgia Power Advanced Solar Initiative

Georgia PowerClass: Utility-scale RFPCapacity: 120 MW (60 MW/year for 2 years)

RFP bids due 4 June 2013 (RFP will be issued 10 May 2013)

Project Sizes: <20 MWContract Rate: Bids with a ceiling of $0.12/kWh fixed for 20 yearsREC Value: Project owner maintains REC ownershipPPA: PPA will be negotiated; comments on baseline PPA due 5 Apr 2013Interconnection: WholesaleDeveloper Limit: No company may get >20 MW in any one year


16

Arkansas Distributed Generation Act – HB 1390

Name: Arkansas Distributed Generation Act – refers to Feed-in TariffCapacity: 1,200 MW proportionately shared by utilities

50% can be owned and operated by utility20% reserved for residential or commercial

Project Sizes: Up to 20 MWTechnologies: Solar, Wind, Water, Geothermal, or Biomass within StateContract: Fixed rate determined by Public Service Commission (PSC) for up to 20 years

Differentiated rates based on technology, project size, and dispatchability

REC Value: Utility owns all RECs (no state RPS though)PPA: to be created/approved by PSCInterconnection: Wholesale, with upgrades to be paid for by developer; interesting language in 23-18-1004(b)(4)(A-B): consideration of…”Location of (projects) in excess of 500 kW…(B) Cost of necessary interconnection facility upgrade to connect a (project) in excess of 500 kW.”Cost Recovery: Utility recovers all costs above avoided cost, costs from facilities owned and operated by utility, necessary grid upgrades, and administrative costs


17

Iowa Wind Energy Incentive – SSB 1234

Name: Wind Energy Incentive ProgramCapacity:

Capacity tied to increased demand; 50% of new demand

Project Sizes: <20 MWTechnologies: Wind with solar and biopower anticipated to be included via amendmentsContract: Standard contract that is approved by the BoardREC Value: Unclear (IA has very small RPS)PPA: Standard contractInterconnection: Wholesale – interconnection required by utilitiesCost Recovery: Contract rate is cost-based, but term is 10-years or “until construction and financing has been recovered, whichever is earlier”


18

Minnesota Omnibus Energy Bill

Name: Minnesota Omnibus Energy BillSolar RPS (in addition to, not component of existing RPS)

0.5% by 20162% by 20204% by 2025“Objective” of 10% by 2030

“Buy All, Sell All”Project Sizes:

ResidentialSmall Commercial (<25kW)Large Commercial Rooftop (25kW-2MW)Large Commercial Ground-Mounted (25kW-2MW)

Price: Value of Solar + Reference Price (details on next slide)Technologies: Solar PVContract: 20 yearsPPA: Utilities must develop standard PPAInterconnection: Wholesale


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Minnesota Omnibus Energy Bill

“Buy All, Sell All”Price = Value of Solar Tariff + Reference Price (PBI):

Value of Solar Tariff (set by Commissioner of Commerce, paid by utility)Board sets rate for each utility; must consider:

Line loss savings from avoided electricity imports on the transmission and distribution gridCapacity savings from avoiding upgrades to t- and d-systems by providing local power Energy savings from reducing wholesale energy purchasesGeneration capacity savings from offsetting the need for new (peak) capacityFuel price hedge value from a zero fuel cost energy sourceEnvironmental benefitsEconomic benefits from the growth of the states solar industry

Reference Price (set & paid by Commissioner of Commerce)Cost of solar, plus reasonable rate of return

Commissioner of Commerce pays the difference between the Reference Price and the Value of Solar TariffEstimated at 2.7cents/kWh


20

Oregon Clean Energy Economy Act of 2013

Name: Oregon Clean Energy Economy Act – refers to 20-year Standard ContractsCapacity: 550 MW proportionately shared by IOUs based on utilities’ use of fossil fuel or nuclear resources (see p. 5, lines 15-19)

30% can come from outside of service territory4 MW of farm biogas30% from PV

“at least 100 MW shall be rooftop solar facilities with nameplate capacity of less than 100 kw; and of which 100 MW of rooftop facilities…”50 MW shall be residential rooftop

No company can install more than 20% of this (odd language on p. 6, lines 26-27)

Enrollment Periods: 2 enrollment periods per yearBy 12/31/2014, 10 MW (10 MW in Year 1)By 12/31/2015, 80 MW (70 MW in Year 2)By 12/31/2016, 170 MW (90 MW in Year 3)By 12/31/2017, 290 MW (120 MW in Year 4)By 12/31/2018, 420 MW (130 MW in Year 5)By 12/31/2019, 550 MW (130 MW in Year 6)

Project Sizes: Not specified; left to PUC (P. 8)


21

Oregon Clean Energy Economy Act of 2013

Technologies: Solar PV, Wind, Farm Biogas, Biogases from anaerobic digestion, small hydro, or geothermal, wave, tidal, or ocean thermal energyContract: Fixed rate determined by Public Service Commission (PSC) for up to 20 years

4 PV tiers for size and 4 PV tiers for geographic resource intensity2 wind tiers for size and 2 wind tiers for geographic resource intensity

REC Value: Gets retired, cannot be used to meet state RPSInterconnection: Wholesale, with upgrades to be paid for by developerCost Recovery: Utility recovers costs in excess of the resource value of the energy generated by the DG. PUC to determine resource value based on:

Musts: Avoided cost (minus firming and shaping), avoided D&T losses, capacity value, T&D deferrals, risk mitigation of fuel price volatilityOptional: Reactive power control and grid resilience and reliability


22

Michigan Property Tax Exemption Bill – HB 4245

Name: “The General Property Tax Act”Current Law

Confusing because of real vs. personal property classificationInterpreted to exempt commercial net metering (not residential)

See NREL’s Market Barriers to Solar in Michigan

Proposed ChangeExempt all energy projects that generate <10,000 MWh annually

Estimated Project Sizes:Biomass – 1.5 MWWind – 2.8 MWSolar – 7.6 MW


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General Backup Slides

GeneralBackup Slides


24

Local CLEAN Program Guide

Free download: http://www.clean-coalition.org/local-action

Contact us: [email protected]

Modules of the Guide:1. Overview & Key Considerations2. Establishing CLEAN Contract Prices3. Evaluating Avoided Costs4. Determining Program Size & Cost Impact5. Estimating CLEAN Economic Benefits6. Designing CLEAN Policies & Procedures 7. Gaining Support for a CLEAN Program


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CLEAN Programs Defined

CLEAN = Clean Local Energy Accessible Now

CLEAN Features:Procurement: Standard and guaranteed contract between the utility and a renewable energy facility ownerInterconnection: Predictable and streamlined distribution grid accessFinancing: Predefined and financeable fixed rates for long durations

CLEAN Benefits:Removes the top three barriers to renewable energyThe vast majority of renewable energy deployed in the world has been driven by CLEAN ProgramsAllows any party to become a clean energy entrepreneurAttracts private capital, including vital new sources of equityDrives local employment and generates tax revenue at no cost to government


26

German Solar Pricing Translates to 7 cents/kWh

Project Size Euros/kWh USD/kWh California Effective Rate $/kWh

Under 10 kW 0.195 0.2470 0.0993

10 kW to 40 kW 0.185 0.2344 0.0942

40.1 kW to 1 MW 0.165 0.2091 0.0841

1.1 MW to 10 MW 0.135 0.1711 0.0688

Conversion rate for Euros to Dollars is €1:$1.27California’s effective rate is reduced 40% due to tax incentives and then an additional 33% due to the superior solar resource

Source: http://solarindustrymag.com/e107_plugins/content/content.php?content.10624, June 2012

Replicating German scale and efficiencies would yield rooftop solar at only between 7 and 10 cents/kWh to California ratepayers


27

US has far better solar resource than Germany


28

Installed PV Costs in US vs Germany

Sources: LBNL, PwC, and Forbes; Sep2012

Rooftop solar project installation costs are roughly 2.5 times higher in the US than in Germany


29

Avoided Transmission in CA = $80 Billion over 20 yrs

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 250

1

2

3

Transmission Access Charges (TAC)

Year

Cen

ts/k

Wh

Potential Future Transmission Investment Represents potential TAC savings from DG and/or potential stranded costs from future Transmission

investments

Business as Usual TAC Growth TAC0 Depreciation + O&M Avoided TAC Opportunity from DG

Current TACRate (TAC0) = 1.2

Business As Usual TAC Growth

Business as Usual Year-20 TAC (TAC20 ) = 2.7

2.7

TAC0 O&M Level


30

CLEAN Avoids Hidden Transmission Costs

Value of Solar in Palo Alto (₵/kWh)0

2

4

6

8

10

12

14

16

Premium

T&D Losses

Transmission

Local Capacity

RPS Value

Base Energy

“Palo Alto CLEAN will expand clean local energy production while only increasing the average utility bill by a penny per month” -- Yiaway Yeh, Mayor of Palo Alto


31

CLEAN-Gainesville Starts a US Solar Revolution

Jan-07Jul-07

Jan-08Jul-08

Jan-09Jul-09

Jan-10Jul-10

Jan-11Jul-11

Jan-120

2,000

4,000

6,000

8,000

10,000

12,000

328 kW

11,456 kWGRU Cumulative Installed Solar

GRU Installed Solar Capacity After October 2008GRU Installed Solar Capacity Be-fore October 2008

kW

In the first 3.5 years of the program, GRU experienced 3,500% solar growth, reach-ing 11.5 MW by April 2012.


32

CLEAN Delivers Ontario’s Goals

On track to replace 100% of coal power by 2014Created tens of thousands of jobs, and on track to create 50,000 jobsAttracted over $20 billion in private-sector investment to OntarioMore than 30 companies are currently operating or plan to build, solar and wind manufacturing facilities in Ontario

2014

6 GWCoal Power

2009


33

SMUD Proves CLEAN is Superior for California

CLEAN = FIT + streamlined distribution grid interconnection:Interconnection of wholesale distributed generation projects to California investor owned utility distribution grids takes an average of 2 years.

In contrast, interconnection to Sacramento Municipal Utility District’s (SMUD) distribution grid takes an average of 6 months.

Two SMUD staff members completedinterconnection studies for 100 MW CLEAN Program projects in 2 months.

SMUD maximized transparency bypublishing online interconnection maps.

100 MW of WDG projects were built in 2 years with no ratepayer impact.This is equivalent to 2.5 GW of cost-neutral WDG across California.


34

DG+IG Backup Slides

DG+IGBackup Slides


35

DG+IG Initiative = Proving Feasibility of High DG

Work with five utilities across the US to deploy a DG+IG demonstration project at each by yearend-2014

Prove viability of Distributed Generation (DG) providing at least 25% of total electric energy consumed within a single substation grid areaIntegrate Intelligent Grid (IG) solutions to ensure that grid reliability is maintained or improved from original level

IG solutions include diversity and Energy Storage for sure, and potentially, advanced inverters, forecasting & curtailment, and/or Demand Response


36

DG+IG Initiative = Proving 50% Local Energy Goal


37

Benefits of DG+IG

Reliability benefitsIncreased customer satisfactionImproved equipment longevity

Potential Resiliency/Security benefitsSustained vital servicesAvoided transmission dependenciesFrom imported energy to local energy

Economic benefitsLarge private-sector investmentSignificant local job creationFixed electricity prices for 20+ yearsLocalized energy spending

Environmental benefitsUtilizing built-environments and disturbed lands for generation projectsPreserving pristine environments from transmission lines and other infrastructure


38

DG+IG Projects Begin with Grid Modeling & Simulation


39

DG Diversity Greatly Reduces Variability

Source: Clean Energy Maui, Feb 2011


40

Power Factor Benefits need to be Compensated

PQ

S

Example (0.85 PF):S = 1 MVAP = 0.85 MWQ = 0.5 MVArP/S = 0.85 = Power Factor

NOTE: A 15% reduction in real power leads to 50% of reactive power.

Sourcing (or sinking) reactive power at the inverter can provide control of local voltage levels – a significant locational benefit not incentivized by current policy.

Policy must be updated to reward the full range of locational benefits that distributed energy resources can provide.

P: “Real Power” consumed by load, used by utility billing and solar PPA

Q: “Reactive Power” used to induce magnetic fields for inductive loads (motors, compressors, etc.)

S: Apparent Power must be generated and distributed to support the total Real and Reactive loads

REACTIVE

REAL

15% P loss

50% potential Q


41

Sizing Energy Storage

Feeder Avg LoadSolar

Nameplate ES Power

Estimated Cost (millions)

MW AC MW DC MW AC 15 min 30 min 60 min

Feeder 7E 3.5 4.9 2.0 $2.4 $3.6 $5.58

Feeder 9E 4.8 6.7 3.0 $3.6 $5.5 $8.37

Water Plant 2.1 2.9

Feeder 7E & 9E 8.3 11.6 4.0 $4.8 $7.28 $11.16

Feeders 7E, 9E & WP 10.4 14.4 5.0 $4.8 $9.1 $13.95

19 march 2013

Documents

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