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Renewable Energy Dividends Effective Renewable Energy Policies For Florida

Renewable Energy Dividends Effective Renewable Energy Policies For Florida. Bayonne. John Burges 2009. RPS REDs Amendment. Integrate into RPS legislation 20% by 2020 German / Gainesville model; similar to CA Energy Comm recommendation A RED for all < 20MW renewable producers

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Renewable Energy Dividends Effective Renewable Energy Policies For Florida

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  1. Renewable Energy Dividends Effective Renewable Energy Policies For Florida Bayonne John Burges 2009

  2. RPS REDs Amendment • Integrate into RPS legislation • 20% by 2020 • German / Gainesville model; similar to CA Energy Comm recommendation • A RED for all < 20MW renewable producers • Pricing determined cost of power + profit • Pricing differentiated by size, technology • Cheapest $/MWhr of RE for ratepayers • Drive green jobs

  3. What’s Required? • Adequate insolation/wind/bio (incoming solar radiation)  • Sunshine State very high; 85% of max. • Long-term fixed pricing/same as utilities X • Payment/Recovery mechanism • Renewables priority grid access • Available/affordable land near demand  • ~10,000 acres per 1000MW • Simple siting and permitting process X • Statewide Leadership for Renewables • Entrepreneurs/Developers  • State must allow new entrants

  4. Germany Comparable to Alaska… Relative solar intensity kwhr/ m2

  5. Florida’s Total Installed Capacity On One German Roof Munich Trade Fair (Germany), 2.1 MWp CompletionNovember 2002

  6. US Utility Trip to Europe - Solar Factory

  7. Large Roof PV System

  8. Facades and Skylights

  9. Solar Shingles and Systems for Tile Roofs

  10. Examples of BIPV Installations

  11. Notice The Bicycle Sheds!

  12. Concentrator Systems

  13. New Forms and Ideas

  14. Jobs and Opportunity

  15. Solar Job Creation in Germany, 2003 – 2010 Germany enactsFeed-in Tariff Law Jobs Source: EuPD Research

  16. Renewables - US Is Left in the Dust… Landmass vs. Wind energy (MW) in Germany and Continental United States (2007) Area Germany: 357,030 km² US*: 8,154,157 km² *23 times larger, without Alaska Installed Capacity Germany*: 22,247 MW US: 16,818 MW *1.3 times larger Map credit: Ryan Perroy, University of California, Santa Barbara

  17. Renewables – Why Bother? • Energy Security - Pickens/Woolsey • Reduce dependency • Russia/Ukraine, Gazprom, Chavez, Iran • Grid security • Wealth Creation - Jobs – Friedman • Higher local ownership; beneficial impact on local economy • Germany employs 250,000 – forecasting 500,000; “Export Machine” • Germany – 2006 - Net benefit to country $9BN per annum • Environmental Benefits • Biomass, wind, solar minimal CO2

  18. GERMANY'S CO2 EMISSION TARGETS(Set by European Union)

  19. Business Perspective – The Opportunity • VC investment in clean energy - $117 BN + 35% 2007 (NEF) • Solar is a $ 30 billion industry – $120BN sales by 2011 - 50% CAGR • ~$100BN stock market valuation for solar • US solar producers largely for export; overseas cannot get enough • US / Florida solar initiatives deeply flawed; deterring investment • Florida is missing massive solar investment opportunity: • $5BN sales - export industry • Employing 25-50,000 people; Construction/Manufacturing, High tech R&D Florida has ~ 2MW of solar. Germany installed over 2000MW in 2008 - $12BN Private Investment

  20. Strong Global Solar PV Market Growth ~$100BN Sales ~$30BN sales QCell Presentation 09-30-07

  21. PV Financing Requirements: Who Lends? Source: Good Energies

  22. Downward Spiral • Global financial meltdown • Less tax capacity & capital available by institutional investors • Federal Tax credits become “worthless” • Equity supply dries up; returns increase • Fewer renewable energy projects • ~3,000 MW less wind farms installed in US in ‘09 vs. ’08 • Loss of ~38,000* “green collar” jobs

  23. Senior Loan Volume 762.4 643.8 This chart reflects the estimated primary volume to the US and European loan markets. The US Market includes tranches denominated in non-USD currencies as well as US dollars. The European Market includes tranches denominated in non-Euro or Sterling currencies as well as Euros and Sterling. Exchange rates from non-USD currencies are based upon date of launch of the individual transactions. Source: S&P

  24. Shortfall in Tax Equity Source – GE Energy Financial Services

  25. Solutions • Modify Federal ITC • Refundable • RE Performance Based Incentives • Feed In Tariffs • Quotas – tradable RECs

  26. Regulatory Regimes – High Risk • ROCs (UK) • RPS / RECs / SRECs (US) • Price risk for electricity • Price risk for the ROCs / RECs (usually) • Lending restricted to duration of RPS obligation and stability of regime • Price & volume risk reduces maturities; reduces leverage and increases price

  27. Regulatory Regimes – Low Risk • Feed-in Tariffs • No price risk • No volume risk • Limited or no regulatory risk once project is built • Counterparty risk is utility/sovereign • Attracts more capital on better terms

  28. Post Banking Crisis…creates new uncertainty • Capital will flow to least risk regulatory mechanism Dexia Bank

  29. What are Feed in Tariffs ?

  30. Renewable Energy Dividendsor Feed in tariffs • Simple, transparent – available to all • Priority access to the grid for all renewable producers • Long term standard offer contracts; fixed price guaranteed • 20 years • Cost + reasonable profit (tba by PSC) • Price Differentiation by size, technology • Price degression • Germany 9-10% fall • Spain 30%

  31. Renewables - Issues ► Solution • Utilities finance fossil fuel under 20 yr rate base • Guaranteed – cost pass through • Renewables require same treatment; private sector will finance • Solution: • Covers all renewables; solar likely to be most productive • RE priority access to grid, 20 yr contracts, differentiated pricing, • We need every school, church, farmer, household and real estate developer to become entrepreneurs & sell back power & so drive us to a more secure clean electricity future • FACT – happening now throughout Europe; growing in US

  32. Renewable Energy Dividends Policies • Deliver More Capacity-- • --More Quickly • --More Equitably • By Enabling Participation • --Everyone • 18 EU Countries use Electricity Feed Laws • 46 Countries world wide • 2008 additions: UK, Switzerland, Ukraine, India • US – Hawaii, OR, CA, IL, MI, MN, RI, LADWP, City of Gainsville Paul Gipe, wind-works.org

  33. Feed In Policies &Solar Photovoltaics in Germany

  34. Solar Photovoltaic Development

  35. World PV Capacity 2007~8,000 MW Paul Gipe, wind-works.org

  36. World Wind Generating Capacity Paul Gipe, wind-works.org

  37. German Homeowners 500 MW on Home Rooftops/yr 2,000 MW+ Total 2 TWh/yr ~ €1 Billion/yr Revenue Anyone with a Roof Can Do Solar in Germany! Paul Gipe, wind-works.org

  38. German Farms--Solar PV Crop ~700 MW on Barn Rooftops in 2007 ~1,500 MW Total in 2007 (€9 Billion) ~1.5 TWh/yr (€700 Million) Paul Gipe, wind-works.org

  39. Germany’s Feed in PoliciesThe Results (2007) s • Renewables 15% of Supply; 27% target 2020, 45% 2030 • Renewables 6% of Primary Energy • 70,000 Employed in Wind Industry • 50,000 Employed in PV Industry • 8,000 Employed in Biogas Industry • 250,000 Employed in Renewables • €22 (~$30) Billion Turnover • Net Benefit $9BN annually Paul Gipe, wind-works.org

  40. NREL Research Findings • Countries with REDs: • Have highest RE deployment • Have highest job creation; highest economist benefits tied to industry, manufacturing & services • Have counter-intuitively delivered lower-cost RE generation than countries employing “competitive” policies like the RPS & RO in the UK National Renewable Energy Laboratory

  41. REDs/FITS vs. Alternative Policies Wind power deployment in the EU: Source: EUROSTAT, 2008; NREL, 2008 National Renewable Energy Laboratory Innovation for Our Energy Future

  42. FITs RPS + RECs * Electricity price + Tradable Green Certificate (i.e. REC) Source: BMU 2008; ISI, 2008; Fouquet, D. et al., 2008 NREL Findings - RE Policy & Cost

  43. NREL - REDs vs. RPS on Cost  NREL Research finding that REDs/FITs offer better value for money Source: OPTRES, 2007; NREL 2009

  44. RE Policy & Cost – REDs/FITs Cheaper

  45. Florida’s Energy Issues • Over-reliant on fossil fuels; imported Gas > 50% power • $50+ oil - (IEA - $200 by 2030 ) FL’s long term electricity costs? • Utility rate increases of 10-15% • Renewables - Speed • Currently < 3% of power generation mix

  46. FL – Excellent RE Resources

  47. Florida PSC RPS Rule/Senate Bill • 20% RE & Nuclear by 2020 • Rate cap of 2% IOU sales ~ $370MM • Recommended tradable REC market • Spot; longer term contracts (unclear how) • Nuclear 25% of targets; RE 75% • Carve out for wind and solar • Utility decides which projects get done, by whom • ROE penalties for non-compliance • 3rd party administrator appointed by IOUs

  48. A Trading System

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