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Craig Lewis
Executive Director Clean Coalition
12 October 2011
Making Clean Local Energy Accessible Now Making Clean Local Energy Accessible Now
Implement CLEAN Programs to overcome top three barriers to renewable energy project development Let private capital transform the energy industry
Energy industry is like telecom industry 30 years ago Policy innovation needed to drive technology innovation and capital flows
Segment
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0 15
0-1 14-15
1 14
1 13
1-2 12-13
2-4 12-14
The most cost-effective solar is ground-based WDG, not central station as commonly thought; due to immense transmission costs
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CLEAN Benefits
Removes the top three barriers to renewable energy The vast majority of renewable energy deployed in the world has been driven by CLEAN Programs Allows any party to become a clean energy entrepreneur Attracts private capital, including vital new sources of equity Drives local employment and generates tax revenue at no cost to government
Making Clean Local Energy Accessible Now
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Procurement
Barrier: Securing a contract to sell renewable energy involves high transaction costs and risks Solution: Standardized contract terms and rates for long duration
Grid Access
Barrier: Gaining access to the distribution grid is risky, expensive, and time-consuming Solution: Transparent and streamlined distribution grid interconnection process
Financing
Barrier: Risk associated with other noted barriers and lack of secure financial basis to attract investors and lenders Solution: Predictable cash flow stream from a low credit-risk source (the utility)
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Germany added 28 times more solar than California in 2010. Even though Californias solar resource is 70% better!!!
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MW
9.25%
up to 10 kW
10 to 30 kW
30 to 100 kW
100 kW to 1 MW
over 1 MW
Germanys solar deployments are almost entirely <2 MW rooftop projects interconnected to the distribution grid (not behind-the-meter)
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Despite environmental and economic advantages, U.S. farms lack the policy support to build a vibrant biogas market.
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CLEAN Programs are Simple and Transparent CLEAN Programs remove barriers and reduce costs
Typical California paperwork for one project Typical Germany paperwork for one project
Could be a 1kW-sized project, but maximum 1MW (via CSI program). Even more paperwork for California projects larger than 1MW (via RPS program).
Source: Gary Gerber, President of CalSEIA and Sun Light & Power, Jun09
Making Clean Local Energy Accessible Now Making Clean Local Energy Accessible Now
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www.EnergyJobsNow.org
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Backup Slides
Backup Slides
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Germany has Cheapest Solar in World (US$0.12/kWh) Most expensive German CLEAN rate is set for solar Germanys weighted average solar rate is about US$0.30/kWh In Colorado, the equivalent rate would be less than $0.12/kWh
Tax credits in US reduce the German rate by 40%
Investment Tax Credit (ITC) and Accelerated Depreciation
Solar resource is at least 50% better in Colorado , which reduces German rate by more than an additional one-third
Connecting-the-Dots to Reform
75% of California IOU capital expenditures are made on the distribution grid (D-grid) and California ratepayers deserve maximized returns on their MASSIVE investments (2007 IEPR)
Investment needs to be future-proofed to allow significant penetrations of clean local energy Confidentiality rules need to change to allow proper regulatory oversight of these massive ratepayer investments
Germany and Spain are excellent proxies for assuring that Californias existing D-grid can accommodate significant penetrations of clean local energy (May 2011 CEC/KEMA report) MPR is determined at point-of-interconnect and Wholesale Distributed Generation (WDG) and a Locational Benefits (LBs) adder is needed to compensate for extra value of WDG
Average extra LBs value of DG is in the neighborhood of 25% (Transmission Access Charges of 1.5 cents/kWh plus 10% for transmission line/congestion losses) The LBs adder should be handled just like the Time-of-Delivery (TOD) adder Ratepayers currently get massive free value from WDG in the form of uncompensated LBs Making Clean Local Energy Accessible Now
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Wholesale Distributed Generation (WDG) interconnections need to be far more timely and transparent
WDG interconnection processes in IOU D-grids are expected to require an average of 2 years WDG interconnection processes in the SMUD D-grid requires 6 months Interconnection studies for 100 MW of WDG projects in its Feed-In Tariff program were completed in 2 months (performed by 2 guys) 100 MW of WDG in SMUD territory is equivalent to 2,500 MW of WDG statewide TWO GUYS for TWO MONTHS should be an achievable benchmark for all utilities Making Clean Local Energy Accessible Now
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Developers
Technology
Systems
Generation Projects
Utilities
Investors
Debt Equity
CLEAN Delivers on Renewables Goals Ontario Goal to Replace 100% of Coal Power by 2014
2009 2014
6 GW Coal power
Note: The Canadian Province of Ontario had 31 GW of peak electric capacity in 2009.
7,391 kW
Before Gainesville, Florida, launched its CLEAN Program in October 2008, Gainesville Regional Utilities (GRU) had 328 kW of installed solar capacity. During the first 2.5 years of the program, GRU experienced 2,000% solar growth. Current capacity is over 7.4 MW and growing. The growth has been driven by the CLEAN program (75% direct; the majority of remainder indirect). The rate impact has been less than 1%.
GRU Installed Solar Capacity After October 2008 GRU Installed Solar Capacity Before October 2008
kW
328 kW
0
26
Volume
D2
D1
Supply and demand with solicitation process Price Supply and demand with an overpriced FIT program
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For this single 10 kW solar rooftop project in Colorado, avoided costs will rise above the CLEAN contract price within a few years
/kWh
Source: Clean Coalition, 2010
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Targeting communities and individual utilities with Local CLEAN Program Guide Targeting states with to-be-developed State CLEAN Program Guide Accessible to all via free download
Making Clean Local Energy Accessible Now
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