A Summary of Renewable Electricity Supply Issues

1
A Summary of Renewable Electricity Supply Issues

• Bob Grace, Sustainable Energy Advantage, LLC
• Rhode Island GHG Process - Phase V
• Stakeholder - Meeting 3
• June 15, 2006

2
GHG Reductions from Renewable Energy
Renewable Energy Standard (RES)
Beyond RES
Additional Options
Additional Options
So Far
So Far
3
Renewable Energy Standard (RES)

• RES model law developed in GHG Stakeholder
  process
• RES law 2004 RES regs 2005
• Targets for electricity providers commence
  1/1/2007, early compliance (2006) possible
• New RE requirement from 1 of load (2007) to
  14 (2019 and beyond)
• Regional sources, regional impact

Renewable Energy Standard (RES)
So Far
4
Will RES Reduce GHG?

• RES law passed with language to make GHG
  reduction explicit stricken
• To achieve GHG reductions, generators should not
  be able to sell GHG reductions (tradable emission
  rights) to another entity associated with RECs
  used for RES compliance
• But regulations to dot explicitly require this
• Requires DEM/PUC coordination to assure this
  benefit
• Requires coordination among states policies
  tracking mechanisms to address interaction of
  Renewable Energy Standards, cap trade policies,
  voluntary green power purchases
• what counts, what benefits can be claimed and by
  whom?

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Renewables SBC

• How to get GHG reductions from RE beyond RES
  Compliance?

Beyond RES

• SBC RE results 10-15 GWh/yr new RE, commitments
  up to 5 years modest GHG impacts
• Berkshire Wind 6 GWh/yr)
• Jan06 Green-Up 3586 customers
• Limited of larger customer commitments
• Renewable Energy Consumer Aggregation
• State House REC Purchase 1650 MWh/yr for 5 yrs
• Intended as voluntary purchase with incremental
  GHG benefit
• Will RECs be redirected to RES compliance, or
  retired as envisioned?

So Far

• Small compared to 2007 RES target of 88 GWh/yr
  new renewable energy
• Unclear how long reductions last
• ? Ignored for modeling purposes

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Electricity SectorWhat Counts as Beyond RES?

• Projects that do not create RECs eligible for RES
  or other states RPS or
• Projects for which RECs are retired independent
  of RES

Beyond RES
Additional Options
7
Beyond RES Compliance

• RIREF?
• Most RIREF efforts will support RES compliance,
  not add to it
• because RES law requires SEO (SBC administrator)
  to work with PUC, EDC to maximize combined impact
  efficiency of the SBC RES
• RI WINDs?
• RI Winds EDC effort to meet goal of 15 RI
  energy supply from wind in RI
• Likely to be used for RES compliance
• If gt RES targets, would surplus RECs be sold
  for other RPS compliance in other states?

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Going Forward.

• The additional renewable electricity toolkit
  includes
• Expanding generation of RES-eligible renewables
  not used for RES compliance
• Encouraging renewables that are not RES-Eligible,
  but are GHG reducing
• Enhancing the RES

Beyond RES
Additional Options
Renewable Energy Standard (RES)
Additional Options
9
Potential Program Options

• Encourage Voluntary Purchases
• Encourage electricity generation with fuels
  ineligible for RES?
• Biomass CHP
• RES Enhancements

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Encourage Voluntary RI Purchases

• Support additional 20 by 2010 campaigns
• Follow lead set by Providence

Beyond RES
Additional Options
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Encourage Voluntary RI Purchases

• Leadership programs EPA Green Power Partnership
  Clean Power Communities challenge recognition
  program
• road-side signs entering a Clean Power
  Community when meet commitment thresholds
• Local govt must be EPA Green Power Partner

http//www.epa.gov/greenpower/
Beyond RES
Additional Options
12
Leverage Voluntary RI Purchases

• Matching grants programs (like CT, MA)
• State entices voluntary GP purchases by offering
  benefits to the community (SBC)
• Match community voluntary commitments on a
  community basis
• Matching grant funds for local clean energy
  projects and projects benefiting low-income
  ratepayers
• Award free clean energy system (e.g. solar PV for
  community municipal buildings) when thresholds
  met (e.g. 3 participation)

Beyond RES
Additional Options
13
Leverage Voluntary RI Purchases

• Or kick it up a notch with competition for
  greenest communities
• Generate additional leverage on invested funds
  with voluntary commitments in similar manner to a
  lottery, with a BIG PRIZE
• Award substantial benefits (e.g. funding a green
  elementary school) for winning community (gt
  minimum threshold)
• Compete on cumulative actual purchase commitments
  of new RE exceeding RES (per-capita)
• Prizes for 1st, 2nd 3rd

Beyond RES
Additional Options
14
Encourage Voluntary RI Purchases Beyond RES Some
Details

• Can use renewable energy credits (RECs) from
  local, regional or national generation sources
• Local sources more likely to have co-benefits,
  but also likely to be costlier
• Q how to take GHG plan credit for these without
  taking credit away from customers?
• example

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Encourage Electricity Generation with Fuels
Ineligible for RES?

• RES has very high bar for sorting biomass fuels
  to be RES-eligible
• But generators unable to meet standard may still
  produce substantial GHG benefits
• e.g. 99 eligible fuel ineligible if contains
  ineligible fuel
• Limitations
• If eligible for another states Renewable
  Portfolio Standard, may not result in incremental
  benefit
• Is there a bright line to separate from
  waste-to-energy?

Beyond RES
Additional Options
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Biomass CHP

• Some biomass will be used to generate electricity
• If RECs produced used for RES compliance, this
  fraction would not count for beyond RES
• Remainder (thermal) would produce incremental
  GHG reductions
• Assess Potential
• Economic/Technical Feasibility Study
• Fuel availability study
• Survey potential applications (host sites)

Beyond RES
Additional Options
17
Increase RESNew Renewable Energy Targets

• Buy-Low strategies if RES compliance cost
  drops well below alternative compliance payments
  (55/MWh)
• Accelerate targets if ample supply (Current RES
  allows supply-demand assessments modest delay
  of target ramp-up if insufficient supply)
• Continue ramp-up of targets post-2019 (assess
  supply-demand to assure enough supply)
• Require Obligated Entities (National Grid) to
  over-procure when solicitations yield ample cheap
  RECs
• Create state fund to buy RECs if prices drop
• Price can be set so GHG benefits cost less than
  marginal GHG alternatives
• Enhanced investor confidence in market by
  mitigating risk

Renewable Energy Standard (RES)
Additional Options