A.B. 206 INCREASING NEVADA S RENEWABLE PORTFOLIO STANDARD

Transcription

1 A.B. 206 INCREASING NEVADA S RENEWABLE PORTFOLIO STANDARD Presentation to Senate Committee on Commerce, Labor and Energy Robert G. Johnston Senior Staff Attorney Western Resource Advocates May 26,

2 RPS COMPARISONS STATES AT 20% OR HIGHER Source: Database of State Incentives for Renewables & Efficiency 100% 100% 90% 80% 75% 70% 60% 50% 50% 50% 50% 40% 30% 40% 38.5% 30% 27% 26.5% Nevada - 25% by % 25% 25% 24.8% 20% 20.38% 20% 20% 20% 10% 0% 2

3 60% NEVADA'S RENEWABLE PORTFOLIO STANDARD CURRENT v. 50% BY % 50% 45% 45% 40% 36% 36% 40% 40% 32% 32% 30% 28% 28% 20% 24% 24% 20% 20% 20% 20% 20% 20% 22% 22% 22% 22% 22% 25% 25% 25% 25% 25% 25% 10% 0% Current RPS 50% by 2030 RPS 3

4 Minimum Percentage of Retail Sales PROPOSED RPS AND PHASE-OUT OF ENERGY EFFICIENCY CREDITS 60.0% 50.0% 40.0% 30.0% 50.0% 45.0% 45.0% 20.0% 28.8% 28.8% 32.4% 36.0% 40.0% 40.0% 19.2% 19.2% 25.2% 25.2% 10.0% 16.0% 16.0% 0.0% 4.0% 4.0% 4.8% 4.8% 2.8% 2.8% 3.2% 3.2% 3.6% Energy Efficiency Credits Renewable Energy Credits 4

5 Annual MWh 18,000,000 16,000,000 14,000,000 12,000,000 50% BY 2030 RPS - ADDITIONAL RENEWABLE ENERGY REQUIRED Source: Docket Nos , SPPC IRP & , NPC IRP Amendment - Response to NCARE 2-03; Load Forecasts Projected - 25% RPS Approximately 7.5 million MWh/year of additional renewable energy by 2030 Additional - 50% RPS 10,000,000 8,000,000 6,000,000 4,000,000 2,000,

6 INCREASING THE RPS TO 50% BY 2030: PROVIDES JOBS AND DRIVES ECONOMIC DEVELOPMENT DIVERSIFIES OUR ENERGY SUPPLY PORTFOLIOS REDUCES OUR EXPOSURE TO FUEL PRICE RISK REDUCES OUR EXPOSURE TO CARBON PRICE RISK CAN BE ACCOMPLISHED AT REASONABLE COST IS CONSISTENT WITH THE ENERGY CHOICE INITIATIVE 6

7 PROVIDES JOBS AND DRIVES ECONOMIC DEVELOPMENT 7

8 Nevada s Commitment to RE spurs in-state investment. Utility scale projects have brought $6.6 billion in capital investments and more than 4300 jobs since Silver State South export power for 80,000 homes, more than 2100 construction jobs, more than $78 million in property taxes contributed to local economy, increased purchases of local goods. NEVADA S CLEAN ENERGY POTENTIAL 8

9 Renewable Energy Investment Renewable energy is an economic driver in Nevada. As of 2016, Nevada had more than 2,900 MWs of renewable energy installed. NREL projects that aggressive renewable energy targets could generate an additional $5 billion in wages and more than 92,000 jobs for the state. FORGE finalist RENEWABLE ENERGY BY THE NUMBERS 9

10 exhibitid=26019&filedownloadname=0213_gov_ecodev.pdf 10

11 DIVERSIFIES OUR ENERGY SUPPLY PORTFOLIOS 11

12 Annual MWh 40,000,000 NV ENERGY'S PROJECTED FUEL MIX - CURRENT RPS Joint System Energy + Customer Solar Generation Source: Docket Nos , SPPC IRP & , NPC IRP Amendment -Response to NCARE 2-03; Load Forecasts 35,000,000 30,000,000 FOR 2016 (Est.): 25,000, % Renewable 73.4% Natural Gas 20,000,000 15,000,000 BY 2025: 20.9% Renewable 71.5% Natural Gas 10,000,000 5,000,000 BY 2030: 25.1% Renewable 63.9% Natural Gas Hoover Coal Natural Gas Renewable Generation Spot Market Purchases 12

13 Annual MWh 40,000,000 50% BY 2030 RPS NV ENERGY PROJECTED FUEL MIX 35,000,000 30,000,000 25,000,000 20,000,000 FOR 2016 (Est.): 13.5% RENEWABLE 73.4% NATURAL GAS BY 2025: 15,000, % RENEWABLE 56.3% NATURAL GAS 10,000,000 5,000,000 BY 2030: 47.5% RENEWABLE 41.5% NATURAL GAS Hoover Coal Natural Gas Renewable Generation Spot Market Purchases 13

14 REDUCES OUR EXPOSURE TO FUEL PRICE RISK 14

15 NATURAL GAS PRICE VOLATILITY High October 2005 $13.42 Low - March 2016 $1.73 January 2017 $

16 Fuel Cost per MWh $60.00 NATURAL GAS GENERATION - FUEL COSTS PER MWh Assumption: 7.5 million BTU/MWh $52.50 $50.00 $45.00 $40.00 $37.50 $30.00 $30.00 $22.50 $20.00 $10.00 $0.00 $3.00 $4.00 $5.00 $6.00 $7.00 Natural Gas Price - Dollars per Million BTU 16

17 REDUCES OUR CARBON EMISSIONS AND EXPOSURE TO CARBON PRICE RISK 17

18 Annual Tons of CO 2 Emissions NV ENERGY - PROJECTED CARBON EMISSION REDUCTIONS Source: Current RPS - Docket No , SPPC IRP, Response to NCARE South Point Split Case 50% by 2030 RPS: Assumes renewable displaces gas generation with CO 2 emissions of 894 lbs./mwh 12,000,000 Projected Emissions - Current RPS Projected Emissions - 50% by 2030 RPS 10,000,000 8,000,000 6,000,000 4,000,000 CO 2 emissions reduced by over 3 million tons/year by 2030 versus current RPS projections 2,000,

19 CARBON PRICE RISK From The Conservative Case for Carbon Dividends (Climate Leadership Council, February 2017): Economists are nearly unanimous in their belief that a carbon tax is the most efficient and effective way to reduce carbon emissions. A sensible carbon tax might begin at $40 per ton and increase steadily over time, sending a powerful signal to businesses and consumers, while generating revenue to reward Americans for decreasing their collective carbon footprint. A $40/ton tax on CO 2 would add $17.88/MWh to the price of natural gas generation with an average emission rate of 894/MWh. 19

20 REASONABLE COST 20

21 Cabinet%20Exit%20Memo.pdf 21

22 Levellized Cost - $/MWh $250 LEVELIZED COST OF ENERGY COMPARISONS By Technology & For Recent NV Energy Purchased Power Agreements Technology Comparisons from Lazard's Levelized Cost of Energy Analysis - Version 10.0 (Dec 2016) $200 [CELLREF] $150 $100 $ $ $50 $48-78 $49-61 $46-56 $32-62 $48.61 $48.69 $48.22 $49.61 $40.62 $37.09 $39-49 $36-44 $14-48 $0 22

23 $ per MWh Summary of Recent NV Energy Solar Purchased Power Agreements Levelized Cost of Energy and First-Year Price $60.00 Levelized Cost First-Year Price $50.00 $48.61 $48.69 $48.22 $46.00 $49.61 $40.00 $38.70 $38.70 $39.90 $40.62 $33.99 $37.09 $31.15 $30.00 $20.00 $10.00 $0.00 Playa Solar 2 9/10/15 Boulder Solar 9/10/15 Playa Solar 1 2/2/16 Boulder Solar 2 2/2/16 Techren Solar 12/28/16 Techren Solar Pending Project and Approval Date 23

24 Our 100% Renewable Vision MidAmerican Energy began investing in renewable energy in 2004, and we re not done yet. Our vision is to provide 100% renewable energy for our customers. It s a bold vision. When the Wind XI project is complete, our annual renewable energy generation is expected to reach a level that s equivalent to 89% of our customer s annual retail usage. And we will continue to evaluate opportunities to realize our 100% renewable vision. 24

25 CONSISTENT WITH THE ENERGY CHOICE INITIATIVE 25

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27 QUESTIONS? Robert Johnston Senior Staff Attorney Western Resource Advocates 550 West Musser Street, Suite I Carson City, NV robert.johnston@westernresources.org About Western Resource Advocates - Founded in 1989, Western Resource Advocates is dedicated to protecting the West s land, air and water. Western Resource Advocates Clean Energy Program works in the Interior West to transition electricity production away from fossil fuels towards clean, renewable energy, and advance energy efficiency in order to prevent catastrophic climate change, improve air quality, and protect public health. 27