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Overview of the Green Power Market : The Basics
October 26, 2008
Dan Lieberman
PRESENTED TO
PRESENTED BY
National Renewable Energy Marketing Conference Denver, Colorado
3degreesinc.com
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Agenda
o Who is 3Degrees?
o Renewable Energy Generation
o The Grid
o Renewable Energy Certificates
o Renewable Energy Financing
o Q & A
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How?
We find high quality projects and bring to market Renewable Energy Certificates and Verified Emission Reductions from around the world.
What does 3Degrees do?
1. Enable customers to become green powered and carbon balanced
2. Channel capital to clean energy and carbon reduction projects
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3Degrees Products and Services
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We find high quality projects and bring to market Renewable EnergyCertificates and Verified Emission Reductions from around the world.
Globally SourcedCarbon Offsets
Resale and Wholesale Sales of Verified Emission Reductions
RenewableEnergy CertificatesResale and Wholesale Sales
of Renewable EnergyCertificates
Utility Green Pricing Programs
Green Power Program Designand Management
2007, 2005 DOE Renewable Energy Marketer of the Year2005 U.S. EPA/CRS Beacon Award for inspiring corporate demand for renewable energy
Regulatory AdvisoryFederal, Regional, and Local
Renewable Energy and Climate Advisory Services
Carbon FootprintingCalculation of the Bounds of
Organizations’ Carbon Profile
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We remove the complexity for you...
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� Project Investment / Capital
� Monetize environmental assets with steady stream of income
� Reduced risk in finding a buyer
� Strong brand with proven origination platform
� Verification services
� Registry / transaction services
� Project finance expertise
� Full spectrum of offsetting products� Project specific� Understanding
verification protocols� Audit trail
� Guaranteed supply / Reduced risk
� Expert team to solve/address offsetting strategies
� Carbon footprinting & regulatory advisory services
� Marketing & PR support
Value Proposition for CUSTOMER: Value Proposition for Project Developers:
What does 3Degrees do?
…while working with clean energy projects to solve their challenges.
RECs/VERs
$$$$
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Our Clients
US Air Force, Pepsi, NBC, IKEA, Staples, IBM, and over 250 other businesses and institutions…
3Degrees is a proud supplier of renewable energy certificates and verified emission reductions to:
9 of the Top 25 Green Power Purchasers
30 Fortune/Global Fortune 500 companies
15 Fortune 500 Challenge companies
20 Climate Leaders
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Acronyms and Terms You Prolly Should Know
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RPS = Renewable Portfolio StandardMWh (and kWh) = Megawatt HourMW (and kW) = MegawattVoluntary market vs. compliance marketREC = Renewable Energy CertificateGreen PricingCRS = Center for Resource Solutions
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Our National Electricity Mix
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99 Source: Energy Information Administration
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Look to Green-eDefinition of eligible renewable fuel types:
Wind
Solar
Geothermal
Biomass
HydroVintage of facility: post January 1,1997Life span (freshness) of RECsNo use of RPS or otherwise mandated renewablesRenewables must be fully aggregated
Renewable Energy Generation: What is It?
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Why are Renewables Good?
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Increase energy security (diversify portfolio)Foster energy independenceImprove energy price stability (decrease price
volatility)Create domestic clean-tech jobs Help protect the environmentFight global warming
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The Grid
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Renewables must be grid-tied to be Green-e eligibleNet metering: gross output is eligible for RECsNon-baseload annual output rates Intermittent resources: don’t even worry about itRegional Grids: your environmental claims are based upon it
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North American Electric Reliability Corporation (NERC) Regions
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RTO/ISO Map
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Emissions & Generation Resource Integrated Database (eGRID) Subregions Map
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Capacity Factors
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Defined: ratio of the actual output of a power plant over a period of time and its output if it had operated at full nameplate capacity the entire time. Wind farms 20-40%Photovoltaic solar in Massachussets 12-15%Photovoltaic solar in Arizona 19%Thermal solar power tower 73%Themal solar parabolic trough 56%Nuclear U.S. average 92%.Base load coal plant 70-90%Combined cycle gas plant, about 60%
Source: wikipedia
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All Renewables are Local
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CO2 Emissions and Related Claims
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By offsetting xxx MWh of electricity, you would help prevent therelease of more than xx million pounds of CO2, the leading greenhouse gas. This has the equivalent environmental benefit asone of the following:
xx cars removed from the road for a year
The CO2 absorbed annually by protecting xxx acres of forest
See the EPA Green Power Partnership’s Green Power Equivalency Calculator and the EPA’s Greenhouse Gas Equivalencies Calculator
Read the National Association of Attorneys General’s Environmental Marketing Guidelines for Electricity and the Federal Trade Commission’s Green Guides
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Why Aren’t We 100% Renewable Already?
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Renewable energy facilities (except biomass) do not require purchased fuel, but they do require large up-front capital expenditures. Renewables compete on price, and in some regions of the country electricity prices are low.To have a high capacity factor, you need excellent renewable resources. Renewable resource availability varies. To generate utility-scale renewables, you need transmission capacity and someone who needs power.Subsidies, Tax Credits, PTC
Be patient (or don’t be…) – we’re getting there!
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What is a Renewable Energy Certificate (REC)?Targets Scope 2
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RECs – Like Green Power, but Without the Power
Green PowerGreen
Power
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RECs – What’s in a Name?
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Green TagsGreen TicketsRenewable CreditsRenewable CertificatesTradable Renewable Certificates (TRC)T-RECSRenewable Energy Certificates (RECs)
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RECs – What a Short, Strange Trip it’s Been
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2000Bonneville Environmental Foundation forms ‘Green Tag Program’‘Green Tickets’ sold in California by APXEPA 1st large purchaser of RECs
2001TX begins RPS program using RECs (ERCOT tracking Program --Mandatory market)CRS issues White Paper on RECs best practices
2002NEPOOL/GIS formed (issues & tracks RECs Mandatory market)Green-e certifies first REC end-use retail products
CurrentEnvironmental Tracking Network of North America (ETNNA)
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RECs – What For?
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Substantiating compliance with RPSSupplying green pricing programsProviding choice for customers with no green
power optionSimplifies green procurement for national account
holdersMeeting emissions reduction goalsGreening of events and products
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RECs – Why?
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Facilitates renewable energy marketsBreaks down geographic boundariesCreates fluidity in marketsDirects dollars to lowest cost renewable resourcesCan be used as a financing mechanism for new
renewable energy facilitiesCould be used for solar aggregationMonetizes the value of attributes
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What Happens When RECs are Traded?
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RECs can be bought/sold/traded any number of times so long as noenvironmental, regulatory, or supply claim is madeOnce an environmental, regulatory, or supply claim is made, the REC is retiredUnlike Brett Farve, a REC cannot come out of retirementRECs are not a donation:
REC purchasers are buying a specific megawatt hour of renewable energy
This is NOT like buying indulgences
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It’s All About the Money
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I was going to put a picture of my kids here, but it’s really not about them at allBuying/selling renewable energy and RECs helps to finance new renewable energy projectsLong-term contracts for RECs and renewables help developers get financingShort-term and spot market transactions of renewable energy and RECs provides the market with liquidityIn many cases, electricity contracts (Power Purchase Agreements –PPA) plus Production Tax Credits are not enough to make a project financially viable – that’s where RECs can make the difference
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283Degrees Supports Over 200 Projects Around the World
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Questions?DAN LIEBERMAN
tele: 415.271.8553email: [email protected]