# Presentation: 657127

## Renewable Energy Supply-Side Options

- Laura Vimmerstedt
- State and Local Climate Change Partners’ Conference

**November 21, 2002**

## “Take Home” Overview

- Every Area Has Renewable Energy Resources
- State and Local Renewable Energy Policies Matter for Implementation
- Innovations and Strategic Opportunities
- Supplemental Environmental Projects
- Partnerships

**Notes:**
1  I’ll show resource maps that show that all geographic regions of the US have renewable energy resources.  
2  If state and local governments choose to use renewable energy to address GHG emissions, then state and local policies will make a difference in how much is accomplished.
3  I would like to mention some important innovations and strategic opportunities.

## Renewable Energy Resources

- Every area of the country has useable renewable energy resources
- Quality of resource varies, and contributes to cost of energy
- Resource assessment & mapping:  Work in progress, many levels of detail

**Notes:**
I’m going to show national maps of renewable energy resources, and here are a few points to keep in mind in looking at these maps
1 Every area has resources, and some areas that don’t look like they have great resources when we look at these national maps may actually have substantial opportunity when we look at a more detailed level

2  Resource Quality contributes to, but does not determine cost of energy

3 Ongoing work is improving our understanding of resources.  More detail is available in some states for some resources

## Slide 4

**Notes:**
Note good resources in West, Northeast, offshore.

Note Texas as an example of where this map is not the full story - local resources can be much better than one is shown when resource assessments are done at a more detailed level.

## 1987 U.S. Wind Atlas Map vs. 2000 High-Resolution (1-km2) Wind Map of North and South Dakota

**Notes:**
Here is an example from the Dakota’s that shows the effect of higher resolution.

## Slide 6

**Notes:**
Will discuss how policy incentives by far overwhelm resource quality in determining which states have competitive customer-sited PV markets.

## Slide 7

**Notes:**
Biomass resources are diverse and complex, so this map is necessarily a very general overview

## Slide 8

**Notes:**
This represents geothermal hydrothermal resources for electricity generation or direct hot water or steam heat, not the geothermal temperature gradient that is used for ground source heat pumps

## State and Local Renewable Energy Policies Matter for Implementation

**Green Power **
**Renewable Portfolio Standards**
**Renewable Energy Funds**

**Net metering**
**Interconnection Standards**
**Tax credits, Buy-downs, Grants**
**Loans**

-   What Policies Provide Incentives?

-   Why Do Policies Matter?
- New Technology:  Market Transformation Issues
- Relative Costs
-   Technology-Specific Examples

**Customer-Sited PV:**

**Notes:**
1.  Listed here are some of the major policies that provide incentives for renewable energy supply.  The column on the left lists general incentives, while this column on the right lists incentives that are specifically important for customer-sited photovoltaics.

2.  Policies are so important for many types of renewable energy supply  because these are relatively new energy supply technologies that face a host of market transformation issues when they are offered in the market.  Just as public policy shaped our energy supply sector as we know it today, so these policies are shaping renewable energy supply opportunities.  

Relative costs are crucial to the effect of policies on the market, and I’ll briefly present some cost data.

I’ll review a few technology specific examples or “success stories” that show how combinations of resource, policy, and technology cost and performance can create working approaches, if renewable energy is chosen as a greenhouse gas mitigation strategy.

## Renewable Electricity Cost Trends

**Wind**

- 1980      1990      2000      2010      2020

**Biomass**

**Geothermal**

**PV**

**Solar thermal**

**Levelized cents/kWh in constant $2000****1**

- COE cents/kWh

- 1980      1990      2000      2010      2020

- 1980      1990      2000      2010      2020

- 1980      1990      2000      2010      2020

- 1980      1990      2000      2010      2020

- 45
- 30
- 15

- COE cents/kWh

- 100
- 80
- 60
- 40
- 20

- 10
- 8
- 6
- 4
- 2

- 70
- 60
- 50
- 40
- 30
- 20
- 10

- 12
- 9
- 6
- 3

- Source:  NREL Energy Analysis Office
- Updated:  June 2002

**Notes:**
These charts depict historical and projected trends in renewable electricity generation costs.  What’s also important to know is that these cost trends mean that wind generation, geothermal electricity, and biomass electricity are or are projected to become competitive with new natural gas combined cycle power plants  in many locations.   
Photovoltaics compete in the retail market, and I’ll discuss that further in a minute.

It’s also important to note that renewable energy applications extend far beyond just electricity supply, including fuel supply and direct heat supply for building and industry.  For example, elsewhere in this conference I believe you will be hearing about the Clean Cities program, which includes renewable fuels for motor vehicles.

## Status of Renewable Energy Policies

**Green power**
**Nearly 40% of U.S. electricity customers **
**More than 1,000 MW of new renewables-based capacity **** **
**Renewable Portfolio Standards **
**13 states **
**1% to 30% of total power supply**
**33% of retail load nationwide**
**Renewable energy funds **
**16 states **
**$3.6 billion total through 2012**

**Notes:**
13 states have instituted renewable portfolio standards ranging from 1% to 30% of total power supply.
Covers about 33% of retail load nationwide.

16 states have established renewable energy funds
Fund collections will total $3.6 billion through 2012.

Nearly 40% of U.S. electricity customers have access to a green power product from either their utility or a competitive power supplier.
More than 1,000 MW of new renewables-based generating capacity has been installed or is under development because of customer demand created in green power markets.

## Slide 12

**Notes:**
Q:  Why are some states shown in both competitive electricity market and utility green pricing slides?

A:  Competitive markets exempt munis & public utilities from competition, and these have green power.

## Slide 13

## State Policies are Promoting New Renewables Development

**New York**
- 350 MW of new wind energy will be in place by end of 2003.Contributing Factors:
- SBC collects funds for renewable energy development
- Federal production tax credit for wind energy
- Market enables green power purchases

## Fenner Wind Project - New York(30 MW)

## State-Level Green PowerPurchase Commitments

**Maryland**
- Executive Order:  6% of state facilities’ electricity consumption
- RFP calls for 20%
**New York**
- Executive Order:  10% by 2005 and 20% by 2010
**New Jersey**
- Green power used for 12% of state government electricity needs
**Pennsylvania**
- Green power used for 5% of state government electricity needs

**Notes:**
Maryland
Executive Order calls for 6% of the electricity consumed by state-owned facilities to be supplied from green power
recent RFP calls for 20%.
New York
Executive Order calls for state agencies to obtain 10% of electricity needs from renewable sources by 2005 and 20% by 2010.
New Jersey
Using green power for 12% of state government electricity needs.
Pennsylvania
Using green power for 5% of state government electricity needs.

## Municipal Green PowerPurchase Commitments

**Chicago + 48 local agencies**
** ****20% for municipal loads = 80 MW by 2005**
**Seattle**
**City goal: no net increase in GHG emissions from electricity**
**5% for entire utility system = 175 MW by 2004**
**Offers green pricing to customers**
**Austin**
**5% renewables supply goal for 2005**
**Now >85 MW from wind, landfill methane, and PV **
**Offers green pricing to customers**

## States with RPS Obligations

**WI: 2.2%by 2011**

** ****IA: 105 aMW**

**MN: 825 MW  by 2012**

** ****NV: 15%in 2013**

** ****TX: 2,880 MW by 2009**

**PA: varies by utility**

**NJ: 6.5%by 2012**

**CT: 13%by 2009**

**MA: 4%new by 2009**

**ME: 30%by 2000**

**NM: 5%as available**

**AZ: 1.1%by 2007                              **

**13 states**
**~33% of retail load in US covered**

- Source: Lawrence Berkeley National Laboratory

**CA: 20%by 2017**

**Notes:**
Here I would want to note that the percentage of the RPS alone does not determine how transformative it will be in the market, but rather the definition of renewable energy and distributional requirements among technologies (if any) have a big influence.

Factors determining whether an RPS will be met through lots of new RE installation include:  
What’s starting point
What’s defined as renewable
Cost cap -whether or not one is included
Categories of RE - whether or not there are different categories
Compliance mechanism:  Tradable credits or not

## State Policies are Promoting New Renewables Development

**Texas**
- More than 900 MW of new wind energy developed during 2001Contributing Factors:
- RPS passed as component of 1999 electricity restructuring law
- Federal production tax credit for wind energy
- Favorable wind resources

## Desert Sky Wind Project - Texas(160.5 MW)

## States with Renewable Energy Funds

**Cumulative 1998-2012 (million $)**

**$127**
** ****mil.**

**RI: $10 mil.**

**MA: $332 mil.**

**CT: $275 mil.**

**NJ: $271 mil.**

**$85 mil.**

**$80 mil.**

**$32**
** ****mil.**

**$94**
** ****mil.**

**$1890**
**  ****mil.**

**$40 mil.**

**$95 mil.**

**$10 mil.**

**$234 mil.**

**16 states with renewable funds**
**$3.6 billion to be collected through 2012**

**DE: $11 mil.**

**$20**
** ****mil.**

- Source: Lawrence Berkeley National Laboratory

**Notes:**
Renewable energy funds are a subset of the public benefits funds where there is a specific allocation of the money for renewable energy 

## State Policies are Promoting New Renewables Development

**California**
- The number of grid-connected small solar and wind energy systems have increased several fold.Contributing Factors:
- SBC funding available for cash rebates
- Net metering available for system sizes up to 1 MW
- Federal solar tax credits for business investments
- “Electricity crisis” increased interest in customer-owned systems

## Santa Rita Jail - Alameda County, CA

## PV Energy kWh/kW-yr

- 2

**Notes:**
What I’m going to show now is the dramatic contrast between the areas of the country with the most PV energy potential and the areas where PV is most cost competitive.  Note the high amount of energy throughout the southwest, and the lesser amount in the northwest, great lakes, and northeastern regions.

## PV Break-Even Turnkey Costs ($/kW) 

- $4,200

-  to

- $13,600

-   (12)

- $3,100

-  to

- $4,200

-   (8)

- $2,300

-  to

- $3,100

-   (8)

- $2,100

-  to

- $2,300

-   (3)

- $2,000

-  to

- $2,100

-   (6)

- $1,200

-  to

- $2,000

-   (13)

**PV Break-Even Turnkey Costs ($/kW)**** **

**Notes:**
Here, the dark red states represent those where PV is most cost-competitive.  Note that, although some states with the best solar resources are taking advantage of that with policies, other states with more modest solar resources have provided strong incentives to make PV cost-competitive for consumers.

## Customer-Sited PV:  Policy Matters

- Policy incentives are the major factor that determines the break-even turnkey cost
- Residential utility rates are a secondary factor
- Resource quality is of less importance
- C. Herig; S. Gouchoe; R. Haynes; R. Perez; T. Hoff (2002).  “Customer-Sited Photovoltaics:  State Market Analysis.”

## Strategic Opportunities:  SEPs

***Voluntary ***Project Agreed Upon In  Enforcement Settlement Context
- Renewable Energy Supplemental Environmental Projects Are Allowed By EPA Policy (some States have SEP policies)
- Substantial $$ Possible $236.8 million dollars in 1999 federal EPA *settlements*

**Notes:**
Renewable Energy Policies certainly represent one set of strategic opportunities for states that choose to use renewable energy.  Next I’ll mention another:  renewable energy supplemental environmental projects.

1.  A supplemental environmental project  are environmentally beneficial projects which a violator agrees to undertake in settlement of an enforcement action but which the violator is not otherwise legally required to perform. 

2.  Renewable Energy Supplemental Environmental Projects are allowed, and likely are within the pollution prevention category of projects.  This is important because P2 projects are considered most desirable

Although substantial funds are possible, it must be emphasized that this is entirely dependant on the magnitude of enforcement action, of the subset of that action that proceeds to settlement, and of the subset of those settlements where the parties agree to undertake a RESEP.

## Renewable Energy SEPs  

- Must Fit Into Settlement Process
- Greatest Value for Renewable Energy if SEP Funds Target Strategically Important Projects
- Assistance is Available
- State Energy Offices
- Wind Powering America Program
- DOE/NREL SEP Workgroup
- StEPP Foundation

**Notes:**
1.  As you can imagine, the enforcement settlement process has a whole set of steps, timing, and requirements, and RESEPs must fit.

2.  From  a renewable energy development perspective, these are the types of funds that should be targeted towards strategically important projects.  Whereas some of the policies mentioned before provide more systematic incentives, RESEPs may be useful for renewable energy market development in situations where these general policy incentives are insufficient to get a strategically valuable project off the ground.

3.  It’s a challenge to put this all together.  As a state, because of budget constraints, we know how important it is to use resources wisely.   and I’d like to point out some resources that can help...

## Strategic Opportunities:  Partners

- State and Local Governments
- National Assistance
**EPA **
**DOE**
**National Renewable Energy Lab**
- Private Sector (Businesses, Consumers)

**Notes:**
In conclusion, I want to recognize the importance of some of the growing partnerships that I see to provide the option of using renewable energy supplies to enhance the environmental performance of the energy sector.  

1.  State and Local Governments can be the key to bringing these together.
2.  Across a number of different parts of EPA, there’s important work to estimate the value of renewable energy supply to the environment, and to support all of you in tapping that value.   
OAP: State and Local Capacity Building
OAP: Energy Supply and Industry
OAQPS: Renewable Energy-Related Policies
OECA:  Supplemental Environmental Projects
2.  The DOE’s W&I program provides an integration point for DOE State activities (incl. Clean Cities)

3.  The National Renewable Energy Lab works with DOE and EPA and States to help realize the potential of renewable energy resources to meet energy supply needs.  Please don’t hesitate to contact me for further detail about NREL and how we may be able to assist you...

## Potential Areas for Collaboration with NREL

- Resource Assessment
- Technology Cost and Performance
- State & Local Technical Assistance
- Project & Policy Case Studies
- Local / Regional Benefits Case Studies
- Training

- SIPs, Cap & Trade
- SEPs
- Voluntary Programs
- Information & Outreach

## Contact Information:

- Laura Vimmerstedt
- National Renewable Energy Laboratory
- 1617 Cole Boulevard, MS - 2721
- Golden, Colorado  80401-3393
- phone:  303-384-7346
- fax:       303-384-7411
- email:    laura_vimmerstedt@nrel.gov