Ryan Wiser

1
Californias Renewables Portfolio Standard

• Ryan Wiser
• Lawrence Berkeley National Laboratory
• (adapted from Tim Tutt California Energy
  Commission)
• November, 2004

2
Renewable Energy Generation in California
3
Renewables Portfolio Standard

• Established by Senate Bill 1078 in 2002
• Designed to increase diversity, reliability,
  public health and environmental benefits of
  Californias energy mix
• Goal of 20 of retail sales from renewables by
  2017, increase by at least 1 per year
• 2003 Joint Energy Action Plan recommends
  accelerating to 2010
• CEC Integrated Energy Policy Report recommends
  more ambitious goal for post-2010
• Governor Schwarzeneggers goal is 33 by 2020

4
Load-Serving Entities

• Retail Sellers subject to RPS
• Electrical Corporations
• Community Choice Aggregators (CCAs)
• Electric Service Providers
• Local Publicly Owned Utilities (Munis) Directed
  to
• Prepare individual plans to comply with RPS
• Report to customers annually

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Historical and Estimated Renewables in California
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CEC-CPUC Collaboration

• The California Energy Commission and the
  California Public Utilities Commission are
  working together as Collaborative Staff to
  implement RPS roles of the two agencies are
  intertwined.
• Collaborative relationship embodied in legal
  declarations from each agency allowing staff from
  the two agencies to work in an advisory capacity
  to decision-makers.

7

• CEC ROLE
• Certify eligible resources
• Establish criteria for incremental output from
  existing geothermal facilities
• Make Supplemental Energy Payments (SEPs) to cover
  costs above market-price referent (MPR)
• Design and implement accounting system to track
  and verify RPS compliance

• CPUC ROLE
• MPR methodology
• Least-cost-best-fit process
• Rules for flexible compliance
• Penalty mechanisms
• Standard contract terms and conditions
• IOU renewable procurement plans, baselines and
  targets
• Approve or reject proposed contracts
• Account for transmission and imbalance costs,
  identify transmission impacts
• Define rules for ESPs Community Choice
  Aggregators
• Evaluate if RPS solicitation is competitive

8
Implementing the RPS - CEC

• The Energy Commission adopted Guidebooks in 2004
• Renewable Portfolio Standard Eligibility
  Guidebook describes the criteria and process for
  certifying renewables as eligible for
  Californias RPS and SEPs
• New Renewable Facilities Program Guidebook
  describes the requirements applicants must
  satisfy to receive Supplemental Energy Payments
  (SEPs)
• Overall Program Guidebook for the Renewable
  Energy Program describes how the Renewable Energy
  Program will be administered

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Implementing the RPS - CPUC

• Has issued multiple rulings on utility
  implementation of RPS
• Standard contract terms and conditions
• Methodology for determining market price referent
• Methodology for evaluating bids on least-cost,
  best-fit basis
• Methodology for calculating transmission costs
  associated with new renewable development
• Established process for planning and building
  first phase of Tehachapi transmission upgrades

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RPS Eligible Technologies

• Biomass
• Biodiesel
• Fuel cells using renewable fuel
• Digester gas
• Geothermal
• Landfill gas

• Municipal solid waste conversion
• Ocean wave, ocean thermal, tidal current
• Photovoltaic
• Small hydro
• Solar thermal
• Wind

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RPS Certification Process

• Facility applies using CEC-RPS-1 IOU may apply
  on facilitys behalf if under contract prior to
  4-21-04
• 10-day turnaround for applications that do not
  require supplemental information
• 30-day turnaround for applications with
  supplemental information
• If certification is denied, facilities can
  petition for reconsideration
• Must re-certify every two years

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The Use of SEPs, and the MPR

• Retail sellers only required to contract with
  renewable generators up to a Market Price
  Referent (MPR), for 10 years contracts
• MPR represents expected cost of new CCGT and CT
  capacity
• Remainder of the contract cost covered by CEC
  through Supplemental Energy Payments (SEPs), the
  funds from which are collected through a rate
  surcharge (the PGC)

13
RPS Process Electric Utilities

• CEC certifies eligible generators
• Utilities hold solicitations summer 2004
• Select bids based on least-cost, best-fit
  criteria, including incremental transmission and
  integration costs, and considering delivery
  profiles
• CPUC sets MPR for energy bids above MPR may
  receive SEPs from PGC funds
• MPR not released until after short list of bids
  are selected by IOUs (to prevent gaming)
• Bid selection is reviewed confidentially by
  Procurement Review Groups
• CEC evaluates SEP eligibility and issues PGC
  Funding Confirmation
• CPUC approves contract

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Supplemental Energy Payments

• Projects must be eligible for RPS
• Projects must be
• New ? commence operation after 1/1/02, date to be
  updated by CEC
• -OR-
• Repowered ? prime generating equipment replaced,
  capital investment equals at least 80 of value
  of repowered facility, facility re-enters
  operation on or after 1/1/02
• Projects must have utility contract through RPS
  solicitation
• SEPs paid for maximum of 10 years

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RPS Integration Cost Analysis Timeline
?

• Phase I
• Develop integration costs analysis methodologies
• Apply methodology to a one year analysis of
  existing renewable and non-renewable generation
  in California
• Phase II
• Identify and evaluate generator attributes
  affecting integration costs (focus on wind and
  geothermal)
• Phase III
• Finalize integration costs methodology and
  develop process for application in RPS bid
  ranking
• Coordinate with Key Contacts and solicit
  feedback
• Present findings in public workshops
• Finalize all reports with comments

February 2004 Workshop Presentation discussion
of methodology, results and findings adoption of
Phase I report
?
April 2004 Wind geothermal generator technology
attribute studies completed results to be
incorporated into Phase III process development
April 2004
April 2004
April 2004
Draft of wind geothermal
Draft of wind geothermal
Draft of wind geothermal
generator attribute studies
generator attribute studies
generator attribute studies
completed
completed
completed
May 2004
?
May 2004
May 2004
June/July 2004 Draft of integration cost
methodologies recommended process for analysis
released to public and sent to Utility Key
Contacts
?
Sept 2004 Report finalized for public release,
review comment Continuing multi-year analysis
to investigate result sensitivities
?
Oct 2004 Workshop on proposed process for
conducting cost analysis to support future
renewables procurement
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Tracking and Verification

• Long-term electronic tracking system will be
  operational by end of 2005
• Energy Commission is working with Western
  Governors Association (WGA) on Western Renewable
  Energy Generation Information System (WREGIS)
• Interim tracking system requires annual submittal
  of third-party verified meter reads until WREGIS
  is operational

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WREGIS at a Glance
WREGIS is a database of information and a forum
for data exchange
Tracking system in Discussion/Under Development
Tracking system in Operation
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WREGIS Objectives and Timeline

• WREGIS will
• Issue WREGIS Certificates
• Prevent double counting of renewable energy
  output
• Achieve economies of scale
• Allow California to meet the legislative
  requirements
• Facilitate voluntary renewable energy credit
  trading throughout Western Electricity
  Coordinating Council (WECC) region

• ? Needs assessment survey and six regional
  workshops, Fall 2003
• ?Needs Assessment Report, December 2003
• ?Interim Operating Rules Functional
  Requirements, July 2004
• ? WECC agrees to house WREGIS, July 2004
• RFP issued, late 1st quarter 2005
• System developer selected, 2nd quarter 2005
• WREGIS operational end of 2005

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Out-of-State Facilities

• RPS Requirements
• Has contract to sell to IOU or CA ISO
• Delivers to in-state market hub or substation
• Satisfies specific delivery requirements
• Participates in WREGIS
• Note appears to allow existing, out of state
  renewable generators

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Out-of-State Facilities

• SEPs Requirements
• Must be eligible for RPS
• First point of interconnection to WECC within CA,
  participates in WREGIS, satisfies delivery
  requirements
• - Or -
• Is or will be connected to WECC, developed with
  guaranteed contracts to sell to CA customers,
  doesnt violate CA environmental quality
  standards, participates in WREGIS, satisfies
  delivery requirements
• Such generators required to be new or repowered

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Out-of-State Facilities SEPs details

• Identify impact on CA Environmental Quality
  Standards
• Describe all CA environmental quality laws,
  ordinances, regulations, and standards (LORS)
  that may be impacted
• Assess whether the facilitys development or
  operation will cause or contribute to a violation
  of any of these LORS.
• Out-of-country
• In addition to above, list LORS that would apply
  if facility were located within California
• Assess whether the facility will cause or
  contribute to a violation of any of these LORS
• Explain how the facilitys developer and/or
  operator will meet these LORS in developing or
  operating the facility

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RPS Delivery Requirements

• Must deliver generation to market hub or
  substation in CA ISO control area, tagged with
  North American Electric Reliability Council
  (NERC) tag
• Must submit third party-verified meter reads of
  generation to CEC on annual basis until WREGIS in
  place

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Results

• SCE, PGE and SDGE conducted significant interim
  renewable energy solicitations in 2002
• More than 620 MW of contracted capacity
• More than 4,200 GWh delivered per year
• Utilities have signed additional bilateral
  contracts since then
• 3 biomass contracts and at least one wind
  repowering by PGE, at least one wind facilities
  for SDGE
• PGE and SDGE are currently reviewing bids based
  on 2004 formal RPS solicitations
• SCE still completing contracts under a 2003
  renewable energy solicitation, and is exempt from
  2004 solicitation requirements because they
  already expect to achieve 20
• Utilities have increased proportion of renewable
  energy supply by over 2, each, so far

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Outstanding RPS Issues

• Adequate transmission system for renewables
  development
• RPS goals beyond 2010
• Rules for ESPs and CCAs
• Renewable Energy Credits (RECs)
• Distributed generation renewables
• Sufficient Public Goods Charge funds for SEPs