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Bradley Nickell Director of Transmission Planning

Bradley Nickell Director of Transmission Planning. Connecting Policy and Wind Energy Investment Iowa State University WESEP-REU June 12, 2012. About WECC. WECC’s mission is to promote and foster a reliable and efficient bulk electric system. Non-Planning Functions. Planning Functions.

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Bradley Nickell Director of Transmission Planning

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  1. Bradley NickellDirector of Transmission Planning Connecting Policy and Wind Energy Investment Iowa State University WESEP-REU June 12, 2012

  2. About WECC WECC’s mission is to promote and foster a reliable and efficient bulk electric system Non-Planning Functions Planning Functions Loads and Resources Assessments Reliability studies Transmission Expansion Planning • Compliance Monitoring and Enforcement • Standards Development • Reliability Coordination • Market-Operations interface • Operator training • WREGIS

  3. Regional Transmission Expansion Planning Where are we today? Regional Transmission Expansion Planning (RTEP) • Completed WECC’s first 10-Year Regional Transmission Plan • In the 2nd year of the biennial planning cycle • Preparing for the creation of Interconnection-wide transmission plans in 2013 Understanding Impacts of decisions, not making determinations on what should be done

  4. The Breeze Behind Wind Energy How Policy Impacts Investment Decisions • What’s driving the policy? • Cost and Risk • About Policies • Parting thoughts – The long KISS

  5. What Drives Energy Policy? • Environmental concerns • Emissions • Land use • Job creation • Manufacturing and construction • Public sentiment • Money

  6. Cost and RiskMonetizing the Future Today • Cost – Pricing the known • Equipment, financing • Risk – Pricing the unknown • Future cashflows, O&M, competition • Time - changes in costs/policies between investment decision and on-line dates • Policy impacts both • Equipment demand • Future tax treatment “Cost is cheap, Risk is expensive”

  7. Renewable Energy Policies • Create markets • Renewable Portfolio Standards (RPS) • Reduce costs • Credits/loans/rebates • Increase costs for alternatives • Emission limitations/costs • Impact risk (real and perceived)

  8. Renewable Portfolio Standards (RPS)Creating the Market • Requires renewable energy procurement • Vary in complexity • Driven by multiple goals • Directed at some/all retail load-serving entities • Attributes • Cost caps/off-ramps • Technology/ownership set-asides • Geography restrictions/incentives

  9. RPS Policies www.dsireusa.org / May 2012 ME: 30% x 2000 New RE: 10% x 2017 VT: (1) RE meets any increase in retail sales x 2012; (2) 20% RE & CHP x 2017 WA: 15% x 2020* MN: 25% x 2025 (Xcel: 30% x 2020) MT: 15% x 2015 NH: 23.8% x 2025 MA: 22.1% x 2020 New RE: 15% x 2020(+1% annually thereafter) MI: 10% & 1,100 MW x 2015* ND: 10% x 2015 OR: 25% x 2025(large utilities)* 5% - 10% x 2025 (smaller utilities) SD: 10% x 2015 WI: Varies by utility; ~10% x 2015 statewide RI: 16% x 2020 NY: 29% x 2015 CO: 30% by 2020(IOUs) 10% by 2020 (co-ops & large munis)* CT: 27% x 2020 NV: 25% x 2025* OH: 25% x 2025† IA: 105 MW PA: ~18% x 2021† IL: 25% x 2025 WV: 25% x 2025*† NJ: 20.38% RE x 2021 + 5,316 GWh solar x 2026 IN: 10% x 2025† CA: 33% x 2020 KS: 20% x 2020 UT: 20% by 2025* VA: 15% x 2025* MO: 15% x 2021 MD: 20% x 2022 AZ: 15% x 2025 OK: 15% x 2015 NC: 12.5% x 2021(IOUs) 10% x 2018 (co-ops & munis) DE: 25% x 2026* NM: 20% x 2020(IOUs) 10% x 2020 (co-ops) DC DC: 20% x 2020 PR: 20% x 2035 TX: 5,880 MW x 2015 HI: 40% x 2030 29 states + DC and PR have an RPS (8 states have goals) Renewable portfolio standard Minimum solar or customer-sited requirement * Renewable portfolio goal Extra credit for solar or customer-sited renewables † Solar water heating eligible Includes non-renewable alternative resources

  10. Financial IncentivesReducing the Cost • Tax Credits • Federal – PTC/ITC • State • Loans • Guarantees • Reduced rates • Direct payments • Grants • Rebates

  11. Tax Credits for Renewables www.dsireusa.org / March 2012 DC 24 states offer tax credits for renewables Personal tax credit(s) only Puerto Rico Corporate tax credit(s) only Personal + corporate tax credit(s) Notes: This map does not include corporate or personal tax deductions or exemptions; or tax incentives for geothermal heat pumps.

  12. 2013 10- and 20-year Transmission PlansConnecting the Dots How might the Western Interconnection need to change to accommodate changes in the supply and demand for electric energy? • 10-year – understanding impacts of near-term decisions (bottoms-up) • 20-year – understanding drivers of potential energy futures (top-down) • The Plans tell the story of how they are connected

  13. Parting ThoughtsThe Long KISS • Long-term policies reduce risk • Stabilize demand • Assure incentives • Simple policies reduce cost • Allow for market-based, least-cost solutions • Foster creativity

  14. Questions Bradley Nickell Director of Transmission Planning Western Electricity Coordinating Council155 North 400 West Salt Lake City, Utah 84103 801.819.7604 bnickell@wecc.biz All information on the WECC 10-Year Regional Transmission Plan may be found at http://www.wecc.biz/10yrPlan.

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