California s Renewable Energy Policy

Transcription

1 California s Renewable Energy Policy James Folkman Renewable Energy Program California Energy Commission March 29, 2011

2 World Perspective We re not alone! Governments throughout the world are focusing energy policy strategy to address the following goals: Reduce and mitigate climate change impacts (pollution, GHG) Support economic growth & competitiveness Strengthen energy security by reducing dependence on oil Eliminate fuel poverty by diversifying with environmentallyfriendly resources 2

3 CA s Advocacy for Renewable Energy California has made electricity generation from renewable resources a priority since the 1970s The 1970s oil crises gave rise to concerns over dependency on fossil fuels and resulted in the passage of federal legislation, the Public Utility Regulatory Policies Act (PURPA) of 1978, which provided guidelines to support growth of nonutility power producers. In California, many of these independent generators were renewable. PURPA was aggressively implemented in the early 1980s. From its peak in the early 1990s, renewable generation declined amid market uncertainties. In 1996, AB 1890 placed a surcharge on electricity sold by investor-owned utilities to be used to fund public interest programs, including renewable energy. The Energy Commission designed the Renewable Energy Program, a financial incentive mechanism to support renewable development in a market environment. This method for supporting renewables, however, was impacted by the energy crisis of 2000 and 2001 and led to the creation of a Renewables Portfolio Standard in

4 Summary of CA s Key Renewable Energy Policy Accelerated RPS from IEPR / EAP / SB 1250 [2006]/107 [2006], Exec Orders S and S-21-09, and EE and CHP goals from ARB s AB 32 (2006) Scoping Plan Renewables 20% of retail sales (~55,000 GWh) Renewables 33% of retail sales (~78, ,000 GWh) California Solar Initiative 3,000 MW of new solar (~4,000 GWh 1 ) State Bioenergy Goal (Executive Order S-06-06) 2 20% of RPS from biopower (~11,000 GWh 1 ) 20% biofuels produced in California 20% of RPS from biopower (~20,000 GWh 1 ) 40% biofuels produced in California Governor s GHG Reduction Targets & AB 32 Specific GHG reduction target allocated to RE is contained in the CA Air Resources Board s Climate Change Scoping Plan, October Assumes average capacity factors are 15% for solar and 90% for biopower. 2 Executive Order S can be downloaded at gov.ca.gov/index.php?/print-version/executive-order/183/. Note: The roadmap also considered detailed policy guidance as stated in the IEPR. 4

5 California GHG Reduction Plan Sees Key Role for Renewable Energy ARB 32 Scoping Plan Recommended Actions for Electricity Sector GHG MEASURE REDUCTIONS (MMTCO2E) Energy Efficiency 15.2 (32,000 GWh of Reduced Demand) Increased Utility Energy Efficiency Programs More Stringent Building & Appliance Standards Additional Efficiency and Conservation Programs Combined Heat and Power 6.7 Increase Combined Heat and Power Use by 30,000 GWh Renewables Portfolio Standard 21.3 Achieve a 33% renewables mix by 2020 Million Solar Roofs 2.1 (Including California Solar Initiative, New Solar Homes Partnership, and solar programs of publicly owned utilities) Target of 3,000 MW Total Installation by 2020 TOTAL 45.3 In November 2008, Gov. Schwarzenegger s Executive Order S raised California renewable energy goals to 33% by In September 2009, Executive Order S directed ARB, under its AB 32 authority, to work with the California Public Utilities Commission, California Independent System Operator, and Energy Commission to adopt regulations by July 31, 2010, consistent with the 33% renewable energy target established in Executive Order S RPS target of 33% is expected to provide 15.2% of total GHG reductions needed to meet AB 32 goal of 1990 emissions levels by

6 CA s Energy Policy Relies on a Loading Order In 2003, California s Energy Action Plan defined a loading order to address the state s increasing energy needs 1. Energy efficiency and demand response 2. Renewable energy and distributed generation 3. Clean fossil-fueled sources and infrastructure improvements This strategy benefits CA by reducing CO 2 emissions and diversifying energy sources. 6

7 Energy Efficiency The Negawatt California s home and appliance efficiency standards resulted in negawatts of capacity that was never built. Source: graph from Commissioner Rosenfeld s presentation on April 24, 2009 entitled Financing Energy Efficiency in California, The First Priority. See 7

8 Energy Policy is an essential part of Reducing Greenhouse Gases Assembly Bill 32, The California Global Warming Solutions Act of 2006 Assembly Bill 32 ([2006] authored by Assembly Speaker Núñez) was landmark legislation requiring California to reduce its GHG emissions to 1990 levels by 2020, and Executive Order S-3-05 set a goal to reduce emissions 80% by It directs the California Air Resources Board (ARB) to establish a comprehensive program of regulatory and market mechanisms to achieve real, quantifiable, costeffective reductions of greenhouse gases. The ARB is responsible for monitoring and reducing greenhouse gas emissions; the Energy Commission plays a key role in helping the state meet its greenhouse gas emission goals. In December 2008, the ARB adopted the "Scoping Plan" -- California's policy blueprint containing the broad overview of programs, measures, and approaches to achieve the required greenhouse gas emission reductions. Renewables and distributed generation are key elements of the ARB AB 32 Scoping Plan. 8

9 New Vision for California s Clean Energy Future California s Clean Energy Future, jointly authored by the ARB, Energy Commission, CPUC, CA Environmental Protection Agency, and CA ISO outlines how CA s energy agencies will achieve the state s environmental and energy policy goals by The document is accompanied by an implementation plan and roadmap and calls for an integrated approach to energy issues. California's Clean Energy Future points the way toward new investments in transmission, energy efficiency, smart grid applications, and increased use of renewable resources. Foundations for this document are CA s Loading Order policy, the energy sector measures in ARB s AB 32 Scoping Plan, and additional measures and enabling strategies adopted by the energy agencies. 9

10 California s 2009 In-State Generation Mix Natural Gas 56.7% Nuclear 15.3% Wind 2.4% Biomass 2.8% Renewables 13.9% Solar 0.4% Large Hydro 12.2% Coal 1.8% Small Hydro 2.0% Geothermal 6.3% Sources: Energy Information Administration, Quarterly Fuel and Energy Report, and SB 105 Reporting Requirements Note: Due to legislative changes required by Assembly Bill 162 (2009), the California Air Resources Board is currently undertaking the task of identifying the fuel sources associated with all imported power entering into California. In-state generation: Reported generation from units 1 MW and larger.

11 Energy Commission Work Related to Renewable Energy All four divisions of the Energy Commission work on renewable energy. Siting of thermal power plants 50 MW and larger and transmission planning for renewable energy. Policy development and implementation, including eligibility and verification for the RPS; incentive programs for existing biomass, small-scale wind, and new solar homes; actions to address barriers to expansion of renewable energy; and climate change policy related to renewable energy. Analysis of changes needed to electricity system to integrate high levels of renewable energy. Public Interest Energy Research, including smart grid, storage, renewable energy-based secure communities, mitigation of environmental impacts of renewable energy. Collaboration/cooperation within the Energy Commission and with other agencies at the state, local, and federal level. Experts and stakeholders help inform our work through advisory committees, siting case hearings, public workshops, and support services contracts. 11

12 CA s Innovative Renewable Energy Program Long-term goal of a fully competitive and self-sustaining California renewable energy supply Existing Renewable Facilities Program Emerging Renewables Program Consumer Education Program New Renewable Facilities Program The REP is legislatively mandated to: Optimize public investment and ensure that the most cost-effective and efficient investments in renewable resources are vigorously pursued. Increase the quantity of California s electricity generated by renewable resources, while protecting system reliability, fostering resource diversity, and obtaining the greatest environmental benefits to the state. Identify and support emerging renewable energy technologies with the greatest near-term commercial promise that merit targeted assistance. 12

13 Renewable Energy Program Funding Annual Allocation: $135 million* 2007 Annual Allocation: $145.8 million* Annual Allocation: $72 million* $69.5 $75.1 $54.7 $56.9 $35.8 $27.0 $14.6 $14.4 Existing Renewable Facilities Emerging Renewables $2.7 $1.4 $0.7 Consumer Education New Renewable Facilities *The total amount collected each year is adjusted annually at a rate equal to the lesser of the annual growth in electric commodity sales or inflation, as defined by the gross domestic product deflator. **Projected annual allocation would have been approximately $77.9 million. $0.0** 13

14 Existing Renewable Facilities Program The ERFP encourages existing renewable generation facilities to remain on-line while transitioning to a competitive market. Production incentives for generation from existing renewable facilities Payments are tied to market prices Eligible technologies: solid-fuel biomass, solar thermal, wind Beginning 2007: Under SB 1250 (2006) revised program structure, facilities must apply annually for funding Currently, applicants are assigned a target price and cent/kwh cap on funding based on their utility contract. For solid-fuel biomass, target prices range from 6.2 to 6.5 cents/kwh with production incentive funding capped at 1.5 cents/kwh. RESULTS AS OF JULY 2010: Has helped 281 existing renewable facilities remain competitive or return to service by paying more than $308 million for 4,700 MW of renewable energy capacity and 83,312 GWh of generation. Provided $6 million for 2004 Agriculture-to-Biomass Program to improve air quality in CA s agricultural areas. 14

15 Emerging Renewables Program The ERP aims to reduce costs and expand sales of emerging renewable technologies. The result: DG systems installed where the electricity is needed and consumed. Provides rebates for purchasing and installing eligible renewable energy systems to offset electricity needs at homes or businesses. Reduces up-front costs for customers. Through 2006, eligible technologies were solar photovoltaic, small wind, fuel cells using renewable fuels, solar thermal electric. Effective 1/1/07, only small wind and fuel cells eligible because solar component replaced with New Solar Homes Partnership and the California Solar Initiative (CSI). RESULTS AS OF JULY 2010: Provided more than $406 million for distributed PV and wind energy systems installed on 28,542 homes and businesses, representing 126 MW of capacity. An additional $3.1 million encumbered for 1.3 MW. 15

16 Senate Bill 1 One Million Solar Roofs in California by 2016! SB 1 enacts Governor Schwarzenegger s Million Solar Roofs Initiative SB 1 (2006) includes both the CPUC s CSI program and CEC s New Solar Homes Partnership (NSHP). SB 1 includes municipal utilities that the CPUC does not oversee. Requires production homebuilders of 50+ homes to offer solar as an option for new homes starting in Adds energy efficiency improvements as a condition to receiving an incentive for roof-top solar energy. Raises the cap on net metering a program that allows solar customers to get an electric bill credit for excess power generated by their solar system from 0.5% of a utility s total load to 2.5% enabling ~500,000 new solar system owners into the net metering program. 16

17 Senate Bill 1 SB 1 is moving California toward a cleaner energy future by creating a self-sustaining solar industry. Largest solar program of its kind in the country $3.35 billion effort by CPUC, CEC, and publicly owned utilities Residential and nonresidential customers 3,000 MW combined public/ investor-owned utilities goal Solar industry self-sufficiency in 10 years Emphasis on energy efficiency and high performance installations 17

18 Senate Bill 1 Solar incentive programs under SB 1 and Governor Schwarzenegger's Million Solar Roofs Program CALIFORNIA SOLAR INITIATIVE CPUC Program Commercial, Industrial, Existing Residential NEW SOLAR HOMES PARTNERSHIP CEC Program New Residential Construction SOLAR INITIATIVE PROGRAMS POU Programs Varies According to POU $2 Billion* $400 Million $784 Million *Additional $100 Million for Solar Thermal and Solar Water Heaters plus $50 Million for Solar R&D 18

19 New Solar Homes Partnership The NSHP intends to create a sustainable market for solar homes and gain builder commitment to install solar energy systems. High-performing solar systems on highly efficient residential construction 400 MW installed capacity by the end of 2016 Solar energy systems on 50% of new homes by end of program Self-sufficient solar industry One-time, up-front incentive Incentives decline as megawatt targets are reached. Incentives decline to zero over 10 years. 19

20 New Solar Homes Partnership ELIGIBILITY REQUIREMENTS New residential construction only Single family, multi-family, affordable housing Customer of investor-owned electric utility Energy Efficiency: Minimum: Tier 1-15% higher than current Title 24 Encouraged: Tier 2-35% higher and 40% AC reduction Minimum 1 kw AC Grid-connected New certified components, 10-year warranty Offset customer s on-site electrical load INCENTIVES Incentive of ~$2.50/watt or more based on expected performance 20

21 New Solar Homes Partnership Seal represents an NSHP home RESULTS AS OF JULY 2010: Pending and received applications for 10,785 solar systems. Residential solar installations totaling 2,902 represent 7.5 MW of renewable capacity bringing total disbursements to $21 million. 21

22 Consumer Education Program Raises consumer awareness about renewables and their benefits Increases purchases of emerging technologies Fosters renewable energy education partnerships Tracks and verifies RPS renewable energy procurement Provides information to California consumers to help build a market for renewable energy. Supports market development of emerging renewables technologies. RESULTS AS OF JULY 2010: Provided over $9 million for market research, 21 outreach and demonstration grant projects, and 4 public awareness campaign contracts. Marketing and outreach activities continue to support the New Solar Homes Partnership. 22

23 Renewables Portfolio Standard Nationwide In the United States, an RPS is a popular energy policy tool A Renewables Portfolio Standard (RPS) requires that a minimum (and growing) percentage of renewable generation be included in the electricity mix. The benefits of an RPS include: Long-term contracts with utilities help reduce risk for the developer and help secure financing Larger economies of scale for renewable technologies brings down the cost Environmental protection & public health clean air, climate change Hedging against volatile natural gas prices Jobs, economic development Lower prices due to competitive procurement process 23

24 State Renewables Portfolio Standards California s RPS Goal for New Renewable Generation is the Most Aggressive in the Country WA: 15% x 2020* OR: 25% x 2025 (large utilities)* 5% - 10% x 2025 (smaller utilities) NV: 25% x 2025* MT: 15% x 2015 IA: 105 MW CO: 30% by 2020 (IOUs) 10% by 2020 (co-ops & large munis)* CA: 33% x 2020 UT: 20% by 2025* KS: 20% x 2020 MO: 15% x 2021 AZ: 15% x 2025 OK: 15% x 2015 NM: 20% x 2020 (IOUs) 10% x 2020 (co-ops) MN: 25% x 2025 (Xcel: 30% x 2020) ND: 10% x 2015 SD: 10% x 2015 WI: Varies by utility; 10% x 2015 statewide MI: 10% + 1,100 MW x 2015* IL: 25% x 2025 VT: (1) RE meets any increase in retail sales x 2012; (2) 20% RE & CHP x 2017 NY: 29% x 2015 OH: 25% x 2025 WV: 25% x 2025* VA: 15% x 2025* NC: 12.5% x 2021 (IOUs) 10% x 2018 (co-ops & munis) DC ME: 30% x 2000 New RE: 10% x 2017 NH: 23.8% x 2025 MA: 22.1% x 2020 New RE: 15% x 2020 (+1% annually thereafter) RI: 16% x 2020 CT: 23% x 2020 PA: ~18% x 2021 NJ: 22.5% x 2021 MD: 20% x 2022 DE: 25% x 2026* DC: 20% x 2020 TX: 5,880 MW x 2015 PR: 20% x 2035 HI: 40% x 2030 Renewable portfolio standard Renewable portfolio goal Solar water heating eligible Minimum solar or customer-sited requirement * Extra credit for solar or customer-sited renewables Includes non-renewable alternative resources 29 states + DC and PR have an RPS (7 states have goals) DSIRE: October

25 California s Renewables Portfolio Standard RPS signed into law in 2002 assigning roles to Energy Commission, CPUC, and requiring retail sellers to procure 20% renewable energy by Publicly owned utilities set their own RPS goals recognizing the intent of the legislature to attain a target of 20% of California retail sales of electricity from renewable energy by Governor Schwarzenegger s Executive Orders set further goal of 33% renewable energy by RPS procurement compliance is measured in terms of electricity delivered, not signed contracts. 25

26 California s Renewable Energy Goals Estimated Statewide Renewables GWh/year (excluding Large Hydro) 120, ,000 80,000 60,000 40,000 20,000-20% by % Renewables (RPS begins) Year 33% by % by 2012* 33% by 2020 if AB 32 Scoping Plan goals met % Renewables 20% by 2010 and 33% by 2020 goals based on retail sales % Renewables and % Renewables based on generation. *Report assuming 20% by 2012: 26

27 RPS Eligible Technologies Biodiesel Biomass Conduit hydroelectric Digester gas Fuel cells using renewable fuels Geothermal Hydroelectric (incremental generation from efficiency improvements) Landfill gas Municipal solid waste (limited) Ocean wave, ocean thermal, tidal current Photovoltaic Small hydroelectric (30 MW or less) Solar thermal electric Wind These technologies also provide most of the POU RPS energy. 27

28 RPS Implementation CEC ROLE Certify renewable facilities as eligible for the RPS Design and implement an accounting system to track and verify RPS compliance Distribute Supplemental Energy Payments (Legislation deleted CEC authority to award SEPs and transfers administrative responsibility to CPUC) CPUC ROLE Oversight of IOU procurement: Approve procurement plans Set baselines and targets Develop market price referent Develop least-cost-best-fit process to evaluate bids Set rules for flexible compliance Standardize contract terms Approve/ reject contracts Ensure RPS competitiveness Administer above-market funds Oversight for other retail sellers 28

29 CEC RPS Certification Facilities certified as RPS eligible represent more than 14,030 MW of capacity.* Biofuels (gas & liquid) Biomass (solid) Conduit Hydro Geothermal Incremental Hydro MSW Combustion CEC ROLE Certify renewable facilities as eligible for the RPS Design and implement an accounting system to track and verify RPS compliance Distribute Supplemental Energy Payments (Legislation deleted CEC authority to award SEPs and transfers administrative responsibility to CPUC) PV 83 Small Hydro 1031 Solar Thermal 453 Wind 8405 *Includes only the percent of capacity certified as RPS eligible. Data as of October MEGAWATTS 29

30 What is the Western Renewable Energy Generation Information System? WREGIS tracks renewable generation to help ensure the credibility of the "green" value of renewable electricity WREGIS is a voluntary, independent renewable energy registry and tracking system for the Western Interconnection transmission area Uses verifiable renewable energy generation data Creates renewable energy certificates (WREGIS certificates) Accounts for transactions involving certificates Supports voluntary and regulatory markets for certificates WREGIS was launched in June 2007 CEC ROLE Certify renewable facilities as eligible for the RPS Design and implement an accounting system to track and verify RPS compliance Distribute Supplemental Energy Payments (Legislation deleted CEC authority to award SEPs and transfers administrative responsibility to CPUC) Retail sellers and renewable facilities participating in California s RPS are required to register with and use WREGIS. POUs can opt to use WREGIS to track their RPS energy. RESULTS as of July 2010: More than 347 companies and over 1,385 generators are approved to be WREGIS Account Holders. 30

31 Attribute Tracking Systems KEY ERCOT M-RETS Michigan Renewable Energy Certification System (in development) NAR: North American Renewables Registry NEPOOL-GIS NC-RETS NYSERDA (in development) PJM-GATS WREGIS ASD FAS FDA FA 31

32 IOU, SMJU, and ESP Progress Toward 20% by 2010 RPS Retail Seller PG&E 8.9% 12.4% 11.6% 11.9% 11.9% 11.4% 11.9% SCE 14.9% 17.9% 18.3% 17.4% 16.1% 15.7% 15.5% SDG&E 1.0% 3.7% 4.3% 5.2% 5.3% 5.2% 6.1% SMJUs Combined 0.0% 4.6% 4.0% 4.4% 5.0% 6.6% 10.2% ESPs Combined * * * 0.7% 1.5% 6.6% ** TOTAL STATEWIDE 10.5% 10.4% 10.2% 10.7% 10.9% 10.7%* 10.6% *No ESP claimed sales of renewable generation in 2001, and no ESP data was collected for years 2003 and **ESPs 2008 procurement data redacted from their March 2009 Compliance Reports submitted to the CPUC. The CPUC did not set RPS targets for the SMJUs until Totals may not sum due to rounding and all data is subject to change. Sources: 1. IOUs, SMJUs, and ESPs data from the March 2009 RPS Compliance Reports filed with the CPUC. Percentages calculated based on same year total retail sales except for SDG&E s 2008 percentage, since they redacted 2008 bundled retail sales in their March 2009 RPS Compliance Report. Consequently, SDG&E s 2008 percentage was calculated using 2007 total retail sales. Data for 2006, 2007, and 2008 has not been verified by the Energy Commission. 2. Total statewide percentages include generation data from the three large IOUs, ESPs, SMJUs, and local POUs. The data source for the Total Statewide percentages in 2001 is the California Electricity Generation database located at energyalmanac.ca.gov/electricity/index.html. The source for Total Statewide percentage for 2007 is the Energy Commission s 2008 Net System Power Report, 3. Other than data for 2007, Total Statewide percentages for years 2003 through 2008 were compiled from data from the respective year s Net System Power Report. 32

33 Signed IOU RPS Contracts by Technology Capacity and Projected Deliveries Contracts are executed as a result of utility solicitations while others are negotiated bilaterally, separate from the RPS solicitation process. PG&E (MW) SCE (MW) SDG&E (MW) Total (MW) Total Projected Deliveries (GWh) Wind 2,684 2,709 3,391 4,109 1,021 1,181 7,096 7,999 20,195 22,719 Biogas ,461 Biomass ,261 2,286 Geothermal ,344 7,756 11,189 Ocean Small Hydro ,500 Solar Thermal 2,452 2,653 3, ,454 6,076 13,623 15,577 Solar PV 2, ,028 7,852 7,894 TOTAL 8,033 8,339 7,331 9,155 1,683 1,863 17,047 19,356 52,861 62,627 Source: California Energy Commission, Database of IOU Contracts for Renewable Generation, August 2010 update, Totals may not sum due to rounding. 33

34 IOU RPS Projects at Risk for Delay or Failure may affect Delivery Goals Source: California Energy Commission, Database of IOU Contracts for Renewable Generation, August 2010 update, 34

35 POUs: About ¼ of California s Electricity California s Publicly Owned Electric Utilities 35

36 POUs RPS Targets and 2008 Procurement Publicly owned utilities must establish an RPS that meets the intent of the mandate for retail sellers and must report their progress to their customers and to the Energy Commission Target 2008 Target Anaheim 6.3% 20% 2015 Redding 27.7% 20% 2017 Burbank 1.3% 33% 2020 Riverside 9.3% 33% 2020 Glendale 13.9% 20% 2017 Roseville 18.3% 20% 2017 Imperial 7.9% 30% 2020 SMUD* 19.7% 33% 2020 LADWP 7.2% 35% 2020 SVP 27.8% 20% ongoing Modesto 11.5% 20% 2017 Turlock 4.4% 20% 2017 NCPA 38.0% various Vernon 1.7% 20% 2017 Pasadena 13.2% 20% 2017 Sources: California Energy Commission, Staff Assessment of POU Resource Adequacy and Electricity Resource Plans, presentation by Jim Woodward, August 6, *SMUD data: SMUD website, Community and Environment, 36

37 Capacity under IOU Feed-in Tariff/ Small-Generation Standard Contracts in California Utility Technology Signed Contracts On-line SCE Renewable Standard Contracts Not greater than 20 MW Landfill Gas Solar PV Wind 7 contracts for 26 MW 1 8 contracts for 140 MW 3 contracts for 45 MW SCE CREST feed-in Landfill Gas 1 contract for 1.1 MW Online tariff < 1.5 MW 2 PG&E SRG feed-in tariff < 1.5 MW 3 Small Hydro Landfill Gas Biogas Biomass Solar PV 13 contracts for 6.84 MW 8 contracts for 7.98 MW 1 contract for 0.3 MW 1 contract for 0.75 MW 9 contracts for 13.4 MW 3 online for 15 MW Not online Not online 8 online for 5.5 MW Not online Online Not online Not online PG&E PWF feed-in Small Hydro 1 contract for.05 MW Not online tariff < 1.5 MW 4 SDG&E Feed-in Landfill Gas 3 contracts for 4.5 MW Online tariffs < 1.5 MW 5 Updated October Some projects originated from SCE s Biomass Standard Contracts program that transitioned to Renewables Standard Contracts January 1, The 3 online LFG projects have initial contract capacities totaling 8 MW, but under the terms of the contracts can be expanded to a total of 15 MW. 2 The new CREST program is a consolidation of SCE s WATER and CREST programs that were established as a result of AB Please visit 3 SRG = Small Renewable Generator 4 PWF = Public Water and Wastewater Facility

38 POU Feed-in Tariff SMUD announced feed-in tariff to begin in 2010 Project Cap of 5 MW; Program cap of 100 MW; Eligible to all RPS projects; Price set at avoided cost LADWP announced feed-in tariff goal of reaching 150 MW of solar photovoltaics by 2016 Senate Bill 32 (McLeod, Chapter 328, Statutes of 2009) Adds Section to PUC creating mandatory POU FiT; Project Cap of 3 MW; Statewide program cap of 750 MW; Price based on value of electricity SMUD feed-in tariff: LADWP feed-in tariff : POU feed-in tariff : 38

39 Investor-Owned Utility Solar Photovoltaic Programs During 2009 and 2010, the CPUC authorized SCE, PG&E, and SDG&E to own and operate solar PV facilities, and execute solar PV power purchase agreements with independent power producers through a competitive solicitation process. These programs are intended to yield up to a total of 1,100 MW of new solar PV capacity in California over the next five years. ll energy produced under the Solar PV Programs is potentially PS-eligible procurement on the utility-side of the meter that ontributes to the state s RPS goals. 39

40 Tradable Renewable Energy Credits Allowed for CA RPS Compliance Tradable RECs can provide greater compliance flexibility, procurement efficiency, and potentially lower costs On January 14, 2011, the CPUC authorized the use of TRECs for compliance with California s RPS. TREC contracts either transfer only RECs and not energy OR are not directly connected to a California balancing authority. Before this decision, utilities were required to purchase renewable energy and RECs together. Now renewable energy generated after January 1, 2008, and its associated RECs can be purchased and/or traded separately. Use of TRECs for RPS compliance can be no more than 25% of each of the three large IOUs annual procurement obligation, beginning with the 2010 compliance year, AND price cap of $50 is imposed on TRECs in TREC-only contracts used for RPS compliance by all IOUs and ESPs. Both limits expire December 31, Participants must meet CPUC and WREGIS requirements as well as Energy Commission s RPS eligibility rules. 40

41 Integrated Energy Policy Report The Energy Commission s IEPR forms the foundation for state policy and decisions on energy issues. Begun in 2003, odd-numbered years full report with an update in even-numbered years Provides an overview of energy trends and issues facing CA Energy supply, demand, pricing, reliability, and efficiency Impacts on public health and safety, the economy, the state s resources, and the environment 41

42 2009 Integrated Energy Policy Report Major Challenges for Renewable Development Difficulty integrating large amounts of renewable energy into the electricity system. Uncertainty on timeline for meeting RPS goals. Environmental concerns with development of renewable facilities and associated transmission. Difficulty securing project financing. Delays and duplication in siting processes. Time and expense of new transmission development. Cost of renewable energy in fluctuating energy market. Maintaining state s existing baseline of renewable facilities. Source: 2009 Integrated Energy Policy Report, Commission Final Report, December 2009, 42

43 2009 IEPR Key Recommendations for Renewable Energy Continue the cooperative work among state agencies to implement a 33% renewable policy that applies to all load serving entities and retail providers. Reduce regulatory uncertainty with legislation to codify the 33% renewable target. Implement measures to accelerate permitting of new renewables and associated transmission. Address barriers to the expansion of biopower, including regulatory hurdles and project financing, and encourage R&D to reduce costs for biomass conversion, biopower technologies, and environmental controls. Identify solutions to integrate increasing levels of energy efficiency, smart grid infrastructure, and renewable energy while avoiding surplus generation. 43

44 Additional Information California Energy Commission Web sites: Renewable Energy Program GoSolar California Renewables Portfolio Standard Integrated Energy Policy Reports California Public Utilities Commission Web site: Renewables Portfolio Standard Air Resources Board Web site: ARB s Climate Change Program 44