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Getting Serious About Renewable Energy Wisconsin Takes the Plunge

Getting Serious About Renewable Energy Wisconsin Takes the Plunge. Michael Vickerman RENEW Wisconsin/Focus on Energy August 2006 Sawyer County Energy Forum Hayward, WI This presentation is funded in whole by Focus on Energy. How RENEW Promotes Renewables.

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Getting Serious About Renewable Energy Wisconsin Takes the Plunge

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  1. Getting Serious About Renewable Energy Wisconsin Takes the Plunge Michael Vickerman RENEW Wisconsin/Focus on Energy August 2006 Sawyer County Energy Forum Hayward, WI This presentation is funded in whole by Focus on Energy

  2. How RENEW Promotes Renewables • Strengthening Renewable Portfolio Standard • Fighting for a Secure and Adequately Funded Focus on Energy • Addressing Market Barriers to Customer RE • Promoting Voluntary RE Purchases • Educating Media, Policymakers on RE Benefits • Partnering with Proactive Utilities (e.g., WE) • Increasing Renewable Energy Tariffs

  3. Wisconsin’s Energy Policy In meeting energy demands, the policy of the state is that, to the extent it is cost-effective and technically feasible, options be considered based on the following priorities, in the order listed: (a) Energy conservation and efficiency (b) Noncombustible renewable energy resources (c) Combustible renewable energy resources (d) Nonrenewable combustible energy resources Wisconsin Statutes 1.12(4)Adopted in 1994

  4. Native to Wisconsin Sunlight Wood Manure Wind Hydro Crops (grasses, corn, etc.) Wastes Not Native to Wisconsin Coal Natural Gas Oil Uranium Geothermal Energy Sources

  5. Wisconsin – A Very Vulnerable State • No known fossil fuel reserves • Minuscule infrastructure for adding value • e.g. wind generators, ethanol plants • Energy transport costs increasing rapidly • Few energy sources, many energy sinks* ________ * Examples: McMansions, prisons, water parks, 4-lane highways, Ho-Chunk Casino, GB Packers, golf courses

  6. Wisconsin’s EconomySources and Sinks • Food (dairy, vegetables, meat, fruit)Positive • Fiber (lumber, paper, furniture)Positive • Fuel (electricity, heat, motor fuel)Negative (~$15 billion)

  7. Why Encourage Renewables in WI? • Shrink Energy Trade Deficit • Slow Down Depletion of Fossil Fuels • Reduce Environmental Footprint • Hedge Against Price Shocks + Fuel Shortages • Create Jobs and Business Opportunities • Because the Federal Government Isn’t Up to the Job A sustainable source of wealth for Wisconsin!!

  8. Why a New Clean Energy Policy? 1. Growing recognition among all concerned that the Act 9 RPS was set too low to function effectively as a market driver for renewables. 2. In 2003 (and again in 2005) state government raided Focus on Energy’s budget, taking more than 1/3rd of program revenues ($47 million). The raid was deeply unpopular, and the Governor needed to do something to blunt a possible lawsuit.

  9. Doyle Convenes Energy Task ForceExecutive Order Issued September 2003 Composition of Task Force Utilities (8) Customer Groups (2) Nonprofits (3) Legislators (4) Trade Allies (5) Labor (1) Executive Branch (1) First Meeting - November 2003

  10. Premise (Marching Orders) of Governor’s Energy Task Force 1. To recommend a statutory mechanism for providing secure and adequate funding for the Focus on Energy (FoE) program. 2. To design a successor RPS for increasing the renewable content of electricity sold in Wisconsin to 10% by 2015. 3. To provide a framework that enables WI utilities to use FoE and a higher renewable energy standard to comply with the state’s Energy Priorities law. EMPHASIS ON CONSENSUS!

  11. Governor’s Energy Task ForceRenewable Energy Recommendations 1. Increase Wisconsin’s RPS • Compliance period 1/1/04 – 12/31/15 • 2004 – Existing percentage of RE (4%) • 2010 – Increase to 6% • 2015 – Increase to 10% • More than doubles existing quantity of RE • Amount to be added equivalent of 1,700 MW of wind in Wisconsin

  12. Governor’s Energy Task ForceRenewable Energy Recommendations 2. State Purchase of Renewable Electricity • 10% content by 2007; 20% content by 2011 • Covers agencies, UW campuses, prisons -- not parks • Can purchase from utilities or generate on-site • Top government RE customers are U.S. Air Force, U.S. EPA, New Jersey, Austin (TX) school district and Montgomery County (MD)

  13. Achieving Consensus Takes Time! 11/03 – 07/04 Workgroups Begin Formulating Policies 07/04 – 09/04 Task Force Agrees on Policy Recommendations 09/04 – 10/04 Report Drafted and Presented to Governor 06/05 – 10/05 Bill Drafting/First Legislative Hearing (SB459) 11/05 – 02/06 Substitute Amendment Drafted/Second Hearing 02/06 – 03/06 Second Substitute Drafted/Third Hearing

  14. Energy Bill (SB459) Receives Strong Bipartisan Support • Passed the State Senate 2/22/06 by a 32-1 vote. • Passed the Assembly 3/7/06 unanimously. • Governor signed SB459 on 3/17/06 – now known as 2005 Act 141.

  15. Ingredients for Legislative Success • Task Force insistent that legislation remain a single package • Bill author (Sen. Rob Cowles) - a strong champion committed to an inclusive, transparent, deliberative process • Backdrop of high energy prices – both parties recognized political necessity of passing an energy bill • Gov., Leg. refrained from election-year gamesmanship • Environmental groups were disciplined, held together • Timing of Scott Jensen’s trial • Regional conflicts were avoided (unlike with ethanol bill)

  16. What Else Is in Act 141? • Protects Focus on Energy funding from future budget raids • Funding level a percentage (1.2%) of total utility gross receipts [2007 estimate - $84 million] • Clarifies utility responsibilities under the Energy Priority Law • Provides implementation waivers for renewables where appropriate

  17. Biodigesters – Top Five States No. InstalledOutput (in MWH/yr) Wisconsin 21 72,927 California 18 49,380 New York 13 8,935 Pennsylvania 11 9,288 Iowa 6 8,056 Source: U.S. EPA (Spring 2006)

  18. Wisconsin Needs More Windpower • No commercial windpower installation has been placed in service in Wisconsin since July 2001. • Most commercial windpower developments proposed in Wisconsin would exert braking effect on electric rates (with PTC in place).

  19. How Wind Stacks Up(Against the Competition) • Pulverized Coal (Powder River) $55 - $60 per MWH • Pulverized Coal (Appalachian) $60 - $65 • Combined Cycle (NatGas) $70 - $80 • Livestock Manure $75 - $90 • Solar (Photovoltaic) $150-$250 ___________________________________________ • Wind (75 MW in Wisconsin) $60 - $65/MWH Note: Wind price assumes 1.9 cents/kWh Production Tax Credit Sources include utilities and MISO

  20. Caution: Wind Turbines Have Become Pricier • $1,200/kW in 2004  $1,800/kW for delivery in 2007 • Global Demand Outpacing Turbine Production Capacity • Tiny U.S. Manufacturing Presence Compared with Europe • Short-Term Tax Credits Hamper Market Development • U.S. Energy Policy Is Wholly Inadequate for 21st Century

  21. What’s Driving Up Fuel Costs? • Coal –Rising Price of Diesel Railroad Network Congestion Higher Demand for PRB Coal • NG -Falling Extraction Volumes More Gas-Fired Power Plants Electricity Load Growth

  22. Proposed WI Wind Farms Developer(MW)County PermitIn-Service Invenergy 200 FDL/Dodge Yes 2007 We Energies 132-203 FDL No 2007-2008 Alliant/Midwest 80 FDL Yes 2007 Midwest Wind 53 Dodge Yes 2007-2008 Midwest Wind 75 Calumet No 2007 Estimated output from these projects – ~1.4 million MWH (2 percent of WI electricity sales)

  23. Leading Business + InstitutionalPurchasers of Renewable Energy State Govt.Private UW-Oshkosh GE HealthCare UW-Green Bay Quad/Graphics UW-Stevens Point MATC-Ozaukee DNR building - Green Bay Alterra Coffee Appleton Coated MSOE

  24. Governor Doyle’s Declarationof Energy Independence • The Declaration, issued in July 2006, calls for a joint public-private effort by the State of Wisconsin, including the University of Wisconsin, to achieve the following goals: • * To generate 25 percent of our electricity and 25 percent of our transportation fuel from renewable fuels by 2025. • * To capture 10 percent of the market share for the production of renewable energy sources by 2030, helping America kick its addiction to foreign fossil fuels and bringing tens of thousands of new jobs to our citizens. Achieving this goal would bring $13.5 billion annually to Wisconsin’s economy by 2030. • * To become a national leader in groundbreaking research that will make alternative energies more affordable and available to all – and to turn those discoveries into new, high paying jobs right here in Wisconsin.

  25. Bioenergy Fuels Reopening of Dormant Park Falls Paper Mill • Wood residues to eliminate use of natural gas as steam source  saving $4-5 million/year • New owner (Johnson Timber of Hayward) plans to build experimental biorefinery using cellulosic sources • $19 million deal includes $4 million in state loans • 300 jobs saved

  26. Summary • Wisconsin must curb its unsustainable and economically unhealthy reliance on imported fossil fuels and use more locally available renewable energy sources to the greatest extent possible. • After much deliberation, Wisconsin passed Act 141 this spring, which establishes a framework for achieving the policy objectives set forth in the Energy Priority Law. • The shift to a more sustainable energy economy will demand a combination of policy prescriptions and market initiatives.

  27. Michael VickermanFocus on Energy Renewable Energy Program608.255.4044 mvickerman@renewwisconsin.orgwww.renewwisconsin.org • Material in this presentation does not imply a recommendation or endorsement of any product or service, by the Focus on Energy Program or any subcontractor of Focus on Energy. The Focus on Energy Program, or any subcontractor of Focus on Energy, is not responsible for inaccurate or incomplete data in this presentation.

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