Leading Insights into Solar Fong Wan Senior Vice President, Energy Procurement Pacific Gas and Electric Company CalSEIA - SolarTech Summit May 7, 2009
Agenda California s Clean Energy History Renewable Energy Requirements PG&E's Portfolio Approach Benefits and Challenges of Utility-scale vs. Distributed Solar Comparison of PV vs. Concentrating Solar Thermal PG&E s New Photovoltaic Program CSI Progress Report Integration of Intermittent Renewables Enabling Technologies: SmartGrid 1
What Makes California Different? Long-standing State policies lower carbon footprint. 30 + years of energy efficiency programs facilitated by decoupling of rates. California Energy Action Plan preferred loading order: Customer Energy Efficiency Demand Response/Dynamic Pricing Renewables Distributed Generation Clean gas-fired plants 2
History of Energy Efficiency Key to California Success Over the past 30 years, California per capita energy use has remained relatively flat compared to the 50% increase in U.S. per capita energy use. 14,000 12,000 10,000 kwh 8,000 6,000 4,000 2,000-1960 1965 1970 1975 1980 1985 1990 1995 2000 US CA Western Europe 2005 3
California Has the Most Aggressive Renewable Portfolio Standard OR: 25% by 2025 (large utilities) 5% - 10% by 2025 (smaller utilities) *NV: 20% by 2015 CA: 20% by 2010 proposed: 33% by 2020 *WA: 15% by 2020 MT: 15% by 2015 *UT: 20% by 2025 CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis) AZ: 15% by 2025 NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) MN: 25% by 2025 (Xcel: 30% by 2020) ND: 10% by 2015 SD: 10% by 2015 IA: 105 MW WI: requirement varies by utility; 10% by 2015 goal IL: 25% by 2025 MO: 15% by 2021 VT: (1) RE meets any increase in retail sales by 2012; (2) 20% RE & CHP by 2017 *MI: 10% + 1,100 MW by 2015 OH: 25%** by 2025 NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) ME: 30% by 2000 10% by 2017 - new RE NH: 23.8% in 2025 MA: 15% by 2020 + 1% annual increase (Class I Renewables) RI: 16% by 2020 CT: 23% by 2020 NY: 24% by 2013 NJ: 22.5% by 2021 PA: 18%** by 2020 MD: 20% by 2022 *DE: 20% by 2019 DC: 20% by 2020 *VA: 12% by 2022 HI: 20% by 2020 TX: 5,880 MW by 2015 Solar hot water eligible Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE ** Includes separate tier of non-renewable alternative energy resources State RPS State Goal 28 states have an RPS; 5 states have an RE goal DSIRE: www.dsireusa.org March 2009 4
Advancing Renewable Energy Technologies Traditional Biomass Small Hydro Geothermal Wind Emerging BioGas Concentrating Solar Thermal Concentrating Photovoltaic Wave Power 5
Aggressive Contracting for Renewables 4000 Annual Cumulative Solar 3500 3000 2500 MW 2000 1500 Min % % MW MW MWh Geothermal 493 13 23 Wind 778 21 18 Bioenergy 129 3 6 Solar PV 777 21 13 Solar Thermal 1230 33 22 Solar/Biomass 107 3 5 Space Solar 200 5 13 4 9 10 1000 5 500 0 # of contracts 23 3 3 3 6 2 8 4 12 11 2 2002 2003 2004 2005 2006 2007 2008 2009 4 30 30 25 5 1 6
A Portfolio of Diverse Central-Station and Dispersed Utility-Scale Solar Technologies 553-MW Parabolic Trough 500-MW Power Tower 550-MW Cd Te PV* Illustrative Illustrative 250-MW Dispersed PV (1-20 MW ea) (PPA) 250-MW Dispersed PV (1-20 MW ea) (owned) 210-MW c-si Tracking PV *after contract assignment 7
Distributed vs. Utility Scale Solar Distributed Utility Scale Pros: Speed to market Not transmission dependent Not dependent on water Cons: Higher deployment costs Slower scale penetration Pros: Economies of scale Efficiencies Compatible with emerging storage technologies Cons: Transmission dependent Land & water requirements Not for all locations PG&E Takes a Diversified Portfolio Approach 8
Why the Trend to Photovoltaics? Proven, commercially ready technology Costs are decreasing Many Northern California locations suitable for PV deployment Modular / rapid deployment capabilities Project size facilitates expedited interconnection Project size avoids transmission upgrades Dispersed implementation reduces environmental impacts More peak coincident than other renewables Utilities now eligible for ITC 9
Solar Energy Cost Trends Levelized Cost of Energy 1 Has Decreased 125-100 - Concentrating Solar Power Photovoltaics 75-50 - 25 -?? Source: NREL Energy Analysis Office (www.nrel.gov/analysis/docs/cost_curves_2005.ppt) 1 These graphs are reflections of historical cost trends NOT precise annual historical data. 10
Why Utility Ownership? Credit-related cancellations or delays of independent contractors projects Balance sheet strength produces lower cost of money Utilities can utilize the PTC and ITC Reduces development risk 11
PV Program Overview 500 MW PV Program Integrated Utility/IPP Solar Program (Filed on 2/24/09; Anticipating CPUC decision in Q4 2009) 250 MW UOG 250 MW PPA 100% Utility Owned Typically 1-20 MW in size Estimated weighted average cost cap of ~$4,275 / kw DC PG&E to hold competitive solicitations for equipment and services 2MW Pilot in 2009, 25MW in 2010 100% PPA 1-20 MW in size Proposed price for 2010 RFO of $246/mwh, subject to Time-of-Day delivery adjustment PG&E to hold RFOs annually 1 st RFO in 2010 12
Annual PG&E Solar Interconnections Over 30,000 PG&E customer solar installations ( = 300MW) Approximately 50% of all grid tied in U.S. 300,000 2006: 4,345 2007: 6,574 2008: 6,534 2009 (through March): 2,721 30,000 Cumulative kw Cumulative Customers 250,000 25,000 200,000 20,000 kw 150,000 15,000 Customers 100,000 10,000 50,000 5,000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 0 13
California Solar Initiative (CSI) - www.pge.com/csi PG&E began administering in 2007 $950 million in PG&E solar incentives over the next decade Statewide goal is to install 3,000 MW by 2016 Customers must perform energy efficiency audit to be eligible for incentives PG&E has connected almost 30,000 solar-generating customers to the grid. 14
What is the California Solar Initiative? The California Solar Initiative provides a financial incentive for the installation of solar on a home or business CSI incentives vary by incentive type, customer segment and system size Incentive amounts gradually reduce over time in 10 Steps Residential currently at Step 5: $1.55/W or $0.22/kWh Non-residential currently at Step 6: $1.10/W or $0.15/kWh First funding is reserved, then once installation is complete, the incentive payment is made Structured to be a 10-year program to develop a sustainable solar industry in California 15
CSI Progress RECEIVED 14,005 applications COMPLETED 10,073 applications Represents 105 MW Garnering $245M in incentives Offsetting roughly 50,000 tons of CO2 16
1400 1200 1000 800 600 400 200 0 PG&E Monthly Net Energy Metering Interconnections 2006 2007 2008 2009 17 Monthly Interconnections January February March April May June July August September October November December
Percent NEM Application Complete to Interconnection within 12 Work Days Cycle Time 100% 95% 95.1% 97.2% 96.5% 97.6% 96.9% 97.7% 97.5% 96.5% 98.1% 97.3% 99.2% 97.7% Exceeds = 96% Meets = 90% 90% 85% 80% Dec-08 Nov-08 Oct-08 Sep-08 Aug-08 Jul-08 Jun-08 May-08 Apr-08 Mar-08 Feb-08 Jan-08 18
Percent NEM Application Complete to Interconnection within 12 Work Days Cycle Time 100% 99.2% 98.1% 98.0% 97.9% 97.5% 97.2% 97.1% 96.9% 96.8% 96.7% 96.7% 96.6% YTD Average = 97.9% 95% Exceeds = 96% Meets = 90% 90% 85% 80% Dec-09 Nov-09 Oct-09 Sep-09 Aug-09 Jul-09 Jun-09 May-09 Apr-09 Mar-09 Feb-09 Jan-09 19
Integrating Intermittent Renewables Solar and wind are both intermittent resources Very few renewable resources are dispatchable Today, integrating renewable resources requires more fast-response natural gas power plants New technologies will provide other options in the future 20
Renewable Resource Integration Renewable Resource Generation Today: Clean, flexible, natural gas-fueled resources are currently necessary to back up intermittent resources Significantly improved air emissions profile than retiring plants, but still fossil-fueled CCGT Centralized Power Storage Plant Tomorrow: Rooftop PV Local Storage Utility scale distributed storage to back up intermittent resources and timeshift resource availability to be coincident with demand Distributed generation and distributed storage to apply similar principles at the customer premise Demand response programs used to integrate intermittent renewables 21
Enabling Technology - SmartGrid 2 Comprehensive communications capability Transmission Operator Distribution Operator Load Serving Entity Industrial Customer 3 Distributed computing Distributed Resources Commercial Customer Energy Storage 1 Increased capacity and flexibility (e.g. bidirectional flow) of energy infrastructure components Substation 4 Advanced applications Solar Plug-In Hybrids Other Substations Microgrid / sustainable communities Residential Customer Advanced Metering Distributed Generation & Storage Multi-Unit Dwelling Communications Smart Switching Device Sensor Advanced Computing 22