SEU 101 DELAWARE SUSTAINABLE ENERGY UTILITY OVERSIGHT BOARD PRESENTATION TO

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1 SEU 101 PRESENTATION TO DELAWARE SUSTAINABLE ENERGY UTILITY OVERSIGHT BOARD John Byrne Center for Energy and Environmental Policy University of Delaware Trenton Allen Vice President Public Finance Department Citi February 3, 2009

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4 SEU 101 [T]HE CHEAPEST, FASTEST, CLEANEST, SUREST LEVERAGE AGAINST CO 2 EMISSIONS IS TO INCREASE THE EFFICIENCY OF ENERGY USE, AND THE POTENTIAL FOR DOING A LOT OF THIS IS LARGE. John P. Holdren Formerly Heinz Professor of Environmental Policy & Professor of Earth and Planetary Sciences, Harvard University; President and Director, The Woods Hole Research Center; Chair of the Board, American Association for the Advancement of Science January 17, 2008 Lecture at National Council for Science and Environment President Barack Obama picks Dr. Holdren for White House Science Advisor January, 2009

5 IPCC Assessment of Principal Mitigation Options GT CO 2-e New Emissions Above 1990 Emission Reductions Non Electric Efficiency Gains & Conservation Electric Efficiency Gains & Conservation Agriculture, Forestry/LULUCF Renewables New Nuclear Plants Other* (51%) 7.2 (30%) 2.5 (10%) 0.9 ( 4%) 1.1 ( 5%) * Other includes 1.1 Gt CO 2-e reduced through several options including: CCS; Waste and Wastewater Management. Source: IPCC Fourth Assessment Report, WG III Report, Mitigation of Climate Change. Supporting Sources: Olivier et al 2006, 2005, WBCSD 2004.

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8 U.S. Cost per kwh Saved versus kwh Supplied Cents per kwh CA CT MA NJ NY VT Cost per kwh Saved Retail Price of Electricity Source: Delaware Sustainable Energy Utility Task Force (2007) and Center for Energy and Environmental Policy

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10 DEEMED SAVINGS GUARANTEED SAVINGS VENDOR INCENTIVES CONSUMER INCENTIVES

11 REGIONAL GREENHOUSE GAS INITIATIVE QUARTERLY AUCTIONS 65% OF AUCTION PROCEEDS TO DE SEU 15% OF AUCTION PROCEEDS TO DE WEATHERIZATION ASSISTANCE PROGRAM

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13 Federal Economic Stimulus Funds American Recovery and Reinvestment Act of 2009 (US House version Billion $) ENERGY EFFICIENCY & CONSERVATION $22.5 Weatherization Assistance Program Grants $6.2 Smart Grid Investment Program $4.5 Energy Conservation & Efficiency Block Grants $3.5 State Energy Program Grants $3.4 Qualified Conservation Bonds $2.4 Institutional Entities Grants & Loans $1.5 Other (incl. Energy Star, Industrial Efficiency) $1.0

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16 Kanazawa Bus Terminal, Tokyo, PV Rooftops SEU Tokyo suburb, PV Rooftops 101 Cultural Center, Gyoda City, Saitama Prefecture, PV Atrium Glass Kiyomidai Community Center, Osaka, PV Atrium Glass

17 Renewables Approaching Parity Levelized Cost per kwh (US cents) LCOE with US Incentives 40 Utility Scale 35 (competes in Wholesale Market) Energy Efficiency Wind NG CT Coal IGCC Geothermal LCOE w/o Incentives Distributed Energy (competes in Retail Market) Mid-Atlantic Retail Electricity Price Solar Thermal Solar PV Thin Film Solar PV Crystalline Data Source: Lazard 2008; CEEP forthcoming Center for Energy and Environmental Policy

18 CA: 20% by 2010 State Renewable Portfolio Standards in the U.S. WA: 15% MN: 25% by 2020 by 2020 MT: 10% NH: 23% by 2025 OR: 25% by 2015 MA: 15% by 2020 by 2025 CT: 10% by 2010 NV: PA: 18% by 2020 IL: 20% 25% NJ: 23% by 2021; 2% PV by CO: 20% by Delaware: 20% by 2019; 2% PV 2015 by Wash DC: 11% by 2022 AZ: NC: 12.5% by 2021 NM: 15% by 10% by 32 states and Wash DC have passed legislation TX: 3% by states with pending legislation NY: 24% by 2013 ME: 10% new RE by 2017 Sources: CEEP Survey, 2008; DSIRE, 2008 HI: 20% by states have completed Climate Change Action Plans content/actionsstateactionplans.html Center for Energy and Environmental Policy

19 U.S. States with Distributed Renewable Portfolio Standards WA: 2X credit for DRE CA: 1.8 GW of PV by 2016 (2.9% of CA elec. sales) NV: 1% solar by 2015; 2X credit for PV CO: ~1% PV by AZ: 4.5% 2020 DRE by NM: 4% 2025 PV by 2020 OH: 0.5% solar by 2025 NH: 0.3% PV by 2014 PA: 0.5% PV by 2020 NJ: 2% PV by 2021 DE: 2% PV by 2019; 3X credit for PV MD: 2% PV by 2022 Wash DC: 0.4% PV by 2022; 1.1X credit for PV NC: 0.2% PV by 2018 NY: 0.15% DRE by states and Wash DC have adopted Distributed Renewable Energy (DRE) targets Sources: CEEP Survey, 2008; DSIRE, 2008 Center for Energy and Environmental Policy

20 Renewable Energy Credits (RECs) Markets for Sustainable Energy Wholesale REC Prices by Resource Type Center for Energy and Environmental Policy

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22 Federal Economic Stimulus Funds American Recovery and Reinvestment Act of 2009 (US House version Billion $) RENEWABLE ENERGY $11.6+ Grants & Loan Guarantees $8.0 RD&D $2.0 Clean Renewable Energy Bonds (CREBs( CREBs) $1.6 3-Year Extension of Renewable Energy Production Credit +++

23 Green Jobs: The Sustainable Energy Advantage Investments in sustainable energy technologies create more permanent jobs than traditional energy supply Permanent Jobs Created per Million $ Invested ENERGY EFFICIENCY & CONSERVATION Residential Buildings 8.2 Commercial Buildings 6.3 RENEWABLE ENERGY Wind 5.7 Solar PV 5.7 COAL PLANTS 4.0 Sources: Erhardt-Martinez & Laitner, The Size of the U.S. Energy Efficiency Market. ACEEE, Singh & Fehrs, The Work that Goes into Renewable Energy. REPP, Values for residential and commercial building sector applications are adjusted from the original report to include appliance and utility rebate programs.