SOLUTIONS. New Clear Free

Transcription

1 New Clear Free SOLUTIONS The purpose of New Clear Free Solutions is to: provide energy oversight to the public and official decision makers using objective scientific, regulatory and financial information. The objective of New Clear Free Solutions is to: help ensure safe, affordable, and sustainable energy solutions for the public and environment. IF YOU FOCUS ON THE PROBLEM, YOU CAN T SEE THE SOLUTION. NEVER FOCUS ON THE PROBLEM.

2 Official Decision Makers

3 Technical Barriers? NO

4 Policy Options? 1. Carbon Tax 2. Cap and Trade 3. Investment Fund 4. Regulation/Renewable Portfolio Standard (RPS) 5. Technology Subsidies 6. Long Term Power Purchase Agreements (PPA) 7. Use Best Parts of All of the Above in the publics interest.

5 Carbon Tax and Investment Plan (CTIP) 1. Tax Carbon and Publicly Invest In Renewable Energy 2. Reinvest Return on investment (PPA) in Renewable Energy 3. Repeat Until Renewable Portfolio Standard (RPS) is Reached UNBSJ Professor of Economics, Dr. Rob Moir. The concept of reinvesting in environmentally-friendlier energy production and energy efficiency to create a compound interest effect is founded economic theory. As such this policy should be considered by all provinces and not only New Brunswick.

6 MWH/Year Sustainability Stage 1 95% RPS Hydro Geothermal Bio CHP Wind Natural Gas Pumped Storage Storage (Tesla Powerwall) Capacity 1021 MW 644 MW 489 MW 2750 MW 1300 MW 100 MW 1400 MW Stage 1 95% RPS Energy Biomass CHP 6% Geothermal 24% Gas C/C 5% Existing Hydro 14% Wind 45% Hydro 6% Economy Wide Carbon Tax $15-$30 /Ton Public Investment Jobs Health Social Policy $ $ MWh 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 Integrated Resource Plan Reinvestment $/MWh= PPA-O&M $70/MWh Economic Policy Environment Policy 0 Year Stage 1 95% Electricty Renewable Portfolio Standard Stage 2 100% Rewnewable Energy Renewable Portfolio Standard 2036 $30 Per Ton Accumulated MWH Per Year Including Existing Hydro 2045 $20 Per Ton Accumulated MWH Per Year Inc Existing Hydro 2055 $15 Per Ton Accumulated MWH Per Year Inc Existing Hydro 2056 $30 Per Ton 20% Increase in Capital Cost Accumulated MWH Per Year Inc Existing Hydro 2075 $15 Per Ton 20% Increase in Capital Cost Accumulated MWH Per Year Inc Existing Hydro 2075 $15 Per Ton 20% Decrease in Capital Cost Accumulated MWH Per Year Inc Existing Hydro $15 Per Ton Accumulated MWh Per Year Including Existing Hydro Without ReInvestment

7 Carbon Tax and Investment Plan Features Uses the power of compound interest to fund the transition to 100% Renewable The problem pays for the solutions while creating much needed jobs Compound interest is fueled with savings from displacing fossil fuels and purchased power Lowest cost policy option (Technology Neutral) Stabilizes energy rates at near current levels well into the future Transition to debt free NB Power (Currently 96% in debt) No early retirement for existing power plants Focuses on displacing fossil fuels not fossil fuel capacity. (Capacity doesn t emit CO2) Significant new source of revenue for provinces without fossil fuels. ($2 Billion Per Year for NB) Revenue replacement for provinces with fossil fuels. (Alberta making some bad mistakes) Prioritizes Investments over subsidizing Does not need carbon tax increase over time to remain effective Mostly supply side policy for a mostly supply side problem (efficiency on its own wont work) Minimal behavioural changes, focuses on transition from dirty energy to clean energy at same cost 3 Pillars of Sustainability. Economic, Environment, and Social Policy Thousands of jobs during multi decade construction boom Fuels economic growth during multi decade construction boom Flexibility for each province to choose their own energy mixes Guaranteed to work if the policy is adhered too. All variables affect only when the objective is achieved not if the objective is achieved

8 Carbon Tax

9 MWh/Year Renewable Portfolio Standard 60,000,000 Integrated Resource Plan 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Stage 1 95% Renewabe Electricity RPS MWh Per Year Stage 2 100% Renewable Energy MWh Per Year $20 Per Ton Integrated Resource Plan MWh/Year CTIP Year

10 Public Investment=Public Interest The investment portion of the CTIP has two parts, both which are necessary to take advantage of compound interest. The first step creates an investment fund called RenewNB and uses the Carbon Tax as a Public investment into renewable energy. The second is to keep reinvesting the revenue generated from the renewable energy, until the policy Renewable Portfolio Standard is reached. The first step creates simple interest, and the second step creates compound interest. The most important part of understanding compound interest is that whomever makes the investment is who earns the interest. The two options are public investment or private investment. If the public invests then they earn the interest, and if private industry invests then they will earn the interest. The CTIP uses the carbon tax as a public investment into renewable energy, because it is in the publics interest to do so.

11 Step 1 Investment Only

12 Step 2 Reinvestment

13 Step 2 Reinvestment

14 Displacing Fuels and Purchased Power Pays for Transition While Stabilizing Energy Rates The second step, reinvestment, is the most important part of the policy, and is the backbone of any successful business plan. This step creates compound interest. The reinvestment is done in the form a long term Power Purchase Agreement. This PPA is a total system cost set at $70/MWh for all of the power generated from the technology in the investment fund. The modeling subtracts the O&M cost from the PPA, which leaves the return of the principle investment plus interest. This is then continually reinvested which has a very significant compounding effect over time. The PPA is set at roughly the average cost of fuel and purchase power, and is below the current total system cost of $91/MWh. The renewable energy will displace fossil fuels and purchased power, with a strategy of displacing the most expensive first. The modeling assumes this will not affect the rest of NB Powers operating budget as it just redirects existing fuel and purchased power expense of $830 million into the fund as renewable energy displaces the Fuel and Purchased power. NB Power can continue to operate using its current revenue requirement to sustain its operations and to slowly pay down debt without any further rate increases. Eventually NB Power will be debt free and and freeing up hundreds of millions on dollars in interest and amortization payments, as well as O&M cost as existing facilities retire.

15 Levelized Cost Of Electricity (LCOE)

16 Levelized Cost Of Electricity (LCOE)

17 Levelized Cost Of Electricity (LCOE)

18 Wind LCOE (PPA) Interest

19 MWh/Year 80,000,000 Policy Comparisons Parliamentary Budget Office April 2016 (Revenue Neutral) $100/Ton 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000, Target 1 100% Renewabe Electricity MWh Per Year Target 2 100% Renewable Energy MWh Per Year $100 Per Ton MWh/Year CTIP $30 Per Ton MWh/Year CTIP $15 Per Ton MWh/Year CTIP $100 Per Ton MWh/Year Investement Only $30 Per Ton MWh/Year Investement Only $15 Per Ton MWh/Year Investement Only

20 MWh/Year 70,000,000 Sensitivity Analysis LCOE(PPA) 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Target 1 100% Renewabe Electricity MWh Per Year Target 2 100% Renewable Energy MWh Per Year $15 Per Ton MWh/Year CTIP $15 Per Ton LCOE $90 MWh/Year CTIP $15 Per Ton $50 LCOE MWh/Year CTIP

21 MWh/Year 80,000,000 Sensitivity Analysis Capital Cost 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Target 1 100% Renewabe Electricity MWh Per Year Target 2 100% Renewable Energy MWh Per Year $15 Per Ton 25% Decreased Capital Cost MWh/Year CTIP $15 Per Ton MWh/Year CTIP $15 Per Ton 50% Increase Capital Cost MWh/Year CTIP $15 Per Ton 25% Decreased Capital Cost MWh/Year Investement Only $15 Per Ton MWh/Year Investement Only $15 Per Ton 50% Increase Capital Cost MWh/Year Investement Only

22 MWh/Year 80,000,000 Sensitivity Analysis Capacity Factor 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Target 1 100% Renewabe Electricity MWh Per Year Target 2 100% Renewable Energy MWh Per Year $15 Per Ton.45 Capacity Factor MWh/Year CTIP $15 Per Ton MWh/Year CTIP $15 Per Ton.25 Capacity Factor MWh/Year CTIP $15 Per Ton.45 Capacity Factor MWh/Year Investement Only $15 Per Ton MWh/Year Investement Only $15 Per Ton.25 Capacity Factor MWh/Year Investement Only

23 MWh/Year SensitivityAnalysis Lifespan 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Target 1 100% Renewabe Electricity MWh Per Year Target 2 100% Renewable Energy MWh Per Year $15 Per Ton 30 Year Lifespan MWh/Year CTIP $15 Per Ton MWh/Year CTIP $15 Per Ton 20 Year Lifespan MWh/Year CTIP $15 Per Ton 15 Year Lifespan MWh/Year CTIP $15 Per Ton Non Capital Cost MWh/Year CTIP $15 Per Ton 30 Year Lifespan MWh/Year Investement Only $15 Per Ton MWh/Year Investement Only $15 Per Ton 20 Year Lifespan MWh/Year Investement Only

24 MWh/Year Integrated Resource Plan 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Year Stage 1 95% Renewabe Electricity RPS MWh Per Year Stage 2 100% Renewable Energy MWh Per Year $20 Per Ton Integrated Resource Plan MWh/Year CTIP

25 MWh/Year Integrated Resource Plan Stage 1 RPS Year $20 Per Ton Integrated Resource Plan MWh/Year CTIP $Reinvestment/Year $Carbon Tax/Year Total Invested /Year Additions Subtractions Notes $300,000,000 $300,000,000 Wind ,900 $22,995,000 $296,937,066 $319,932,066 Wind ,356 $47,689,452 $293,670,630 $341,360,082 Wind ,473,661 $74,221,016 $290,186,239 $364,407,255 Grand Falls 100MW Existing Project ,809,047 $93,824,350 $286,468,360 $380,292,711 High Narrows Existing Project ,075,556 $112,693,197 $282,500,302 $395,193,499 Small Hydro Combination of known small hydro projects ,604,251 $150,309,848 $278,264,118 $428,573,966 Pump Storage Grand Falls ,604,251 $150,309,848 $273,740,515 $424,050,363 Wind ,254,321 $185,771,123 $270,839,684 $456,610,807 Wind ,954,305 $223,955,270 $268,527,975 $492,483,245 Wind ,709,282 $265,139,256 $263,920,683 $529,059,938 Wind Grand Manan ( 29 MW) ,520,331 $309,381,972 $263,920,683 $573,302,655 Geothermal (285) Bayside Power PPA Test Technology ,157,051 $323,931,031 $259,773,267 $583,704,298 Biomass CHP Test Technology ,392,641 $329,632,314 $258,241,817 $587,874,131 Wind Grandview PPA ( 90 MW) ,293,852 $378,793,376 $252,388,287 $631,181,663 Storage+Mactaquac ( 668 MW) NB Government should be looking to the Federal government for a low interest loan guarantee ,293,852 $378,793,376 $252,388,287 $631,181,663 Wind Storage Technology is costed as the Tesla Powerwall. It is currently approximately Integrated Resource Plan $3000 per 3.3kw With 7kwh of storage. This is a cost of $909,000 Per MW. It is Twin Rivers PPA ( ,000,000 8,261,454 $432,253,358 $246,122,928 $678,376,286 Storage conservatively assumed a cost of $2,000,000 to also include installation, and smart MW) 45,000,000 grid integration cost. The use of thermal storage heaters would also be used, but 40,000,000 the costs are less expensive ,000,000 8,261,454 $432,253,358 $246,122,928 $678,376,286 Wind ,000,000 9,301,405 $490,438,608 $239,412,707 $729,851,316 Gas C/C ,000,000 9,506,456 $502,126,528 $232,221,710 $734,348,238 Gas C/C ,000,000 9,712,770 $504,942,723 $229,396,423 $734,339,146 Gas C/C 15,000, ,919,083 $507,831,093 $226,564,668 $734,395,761 Geothermal (660) Lepreau 10,000, ,734,716 $529,323,027 $220,954,081 $750,277,109 Geothermal 5,000, ,567,987 $551,571,371 $215,240,630 $766,812,001 Geothermal 0 (972) Coleson Cove ,419, $574,608, $213,125, $787,733, Biomass CHP Biomass CHP ,737,561 $583,637,574 $210,995,708 $794,633,282 Biomass CHP Year ,598,385 $569,863,381 $211,912,989 $781,776,370 Storage 2043 Stage 1 95% 12,107,929 Renewabe Electricity RPS $545,168,929 MWh Per Year $207,173,029 Stage 2 100% $752,341,958 Renewable Energy MWh Per Year Wind 2044 $20 Per Ton 12,737,964 Integrated Resource Plan $587,203,441 MWh/Year CTIP $209,120,856 $796,324,297 Wind ,623,343 $640,601,863 $210,689,244 $851,291,106 Wind (467) Belledune Gas C/C

26 Integrated Resource Plan Stage 1 RPS Mix Yearly Resolution Biomass CHP 6% 2,500,000 Generation Mix Stacked Monthly Resolution Using Actual Wind Patterns and Hyrdo Flows Wind 45% 2,000,000 Geothermal 24% 1,500,000 1,000, ,000 Gas C/C 5% Existing Hydro Wind 14% Hydro Existing Hydro Hydro 6% Gas C/C Geothermal Biomass CHP 0 April May June July Aug Sept Oct Nov Dec Jan Feb March Demand Wind Hydro Geo Bio Natural Gas Wind New Hydro Existing Hydro Gas C/C Geothermal Biomass CHP Storage Pump Storage Total MWh Firm Capacity Total Capacity MWh/Year 6,757,666 1,130,591 2,700, ,678 3,137, , ,217,447 NA NA % of Generation NA NA NA Capacity MW NA

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28 What Can We Do Right Now Last summer Belledune was offline for its biennial maintenance. During this time replacement power was from Hydro Quebec, at a very minimal additional cost. This could be done every summer and significantly reduce NB Powers emissions at a very low cost. This would only apply for non winter months, as the capacity is currently needed only in the winter time. In general it would be good policy to take advantage of HQ power to displace fossil fuels, then us the CTIP policy to displace HQ Power.

29 What do I want the committee to do? Order NB Power to work with New Clear Free Solutions to model this policy with their more sophisticated software Reduce Uncertainty in LCOE data by using project specific data Examine cost of displacing Belledune with HQ power in summer months.