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Overview of Environmental Attributes Market

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First nationwide green power marketer with 100% green energy ... Source: Price Waterhous-Coopers / Canter Fitzgerald. Very Early in its Definitions and Rules ... – PowerPoint PPT presentation

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Title: Overview of Environmental Attributes Market


1
Overview of Environmental Attributes Market For
Bonbright Center Conference October 3, 2007
Sterling Planet
2
Company Background and Clients
  • First nationwide green power marketer with 100
    green energy choice Founded in 2000
  • Sold over 14,405,697,414 kWh of green energy
    (equal to 1,386,230 average residential customers
    or avoidance of 7,871,855 trips between New York
    City and Los Angeles)
  • Nations leader in renewable kWh sales
  • Largest Transaction in U.S. green energy history
    (Pepsi)
  • Buyer and seller of environmental attributes
    (RECs, White TagsTM and Carbon Credits)

853 Large Clients
  • Universities (37)
  • Harvard
  • Yale
  • Duke
  • University of Utah
  • Florida State
  • Utilities (49)
  • FPL
  • Con Edison
  • PEPCO Energy
  • Constellation
  • Connecticut PL
  • Commercial Industrial (645)
  • Alcoa
  • DuPont
  • Johnson and Johnson
  • Pepsi
  • Staples
  • Nike
  • Whirlpool
  • 2004 Democratic Convention
  • 2004 Republican Convention
  • NFL (2007 Super Bowl)
  • Coca Cola
  • Government (122)
  • US Air Force
  • US Army
  • Homeland Security
  • NASA
  • Western Area Power Administration
  • US EPA
  • US GSA
  • National Renewable Energy Lab
  • Veterans Affairs
  • State of New York
  • State of Illinois

2
3
US Renewable Energy Market
  • RECs represent the contractual right to claim
    the environmental and other attributes associated
    with electricity generated from renewable energy.
    Companies apply these to their Greenhouse Gas
    (GHG) emissions.
  • Bank of America pledges to reduce its total
    U.S. GHG emissions by 9 from 2004 to 2009.
  • Eastman Kodak pledges to reduce total global
    GHG emissions by 10 from 2002 to 2008.
  • Gap pledges to reduce its U.S. GHG emissions by
    11 per square foot from 2003 to 2008.
  • Marriott pledges to reduce U.S. GHG emissions
    by 6 per available room from 2000 to 2010.
  • Pfizer pledges to reduce global GHG by 35 per
    of revenue from 2000 to 2007.
  • Baxter, IBM, NREL and SC Johnson achieved their
    ambitious 2000 to 2005 goals.

3
4
Green Energy Market and Market Size
U.S. Electricity Market is Over 250 Billion a
Year
10 Billion - 3 Trillion Target Market(Global
Green House Gas Emissions)Current Estimated at
1.2 Trillion in 2012
53 Billion Target Market (RPS)
4.2 Billion Target Market (Commercial
Industrial)
2.5 Billion Target Market (Residential)
Voluntary REC Market Size
GHG Emissions Market Size
Mandated REC Market Size
Source Department of Energy
Source Global Energy Decisions
Source Price Waterhous-Coopers / Canter
Fitzgerald
  • Very Early in its Definitions and Rules
  • More Advanced in
  • Europe
  • Japan
  • Customers Voluntary Pay More
  • 24 Utility Marketing Programs in
  • Florida Connecticut
  • New York Massachusetts
  • New Jersey Rhode Island

4
5
Sterling Planet is Active in All 3 Markets
REC Markets
  • Voluntary Markets
  • Customers voluntarily pay more for renewable
    energy
  • Participating in 24 (49 Overall) utility
    renewable marketing programs in
  • Florida, Massachusetts, New York, Connecticut,
    New Jersey, Rhode Island and Washington, DC
  • Mandated Markets
  • Sell RECs to utility to satisfy RPS
  • Manage RECs exchange among utilities
  • Provide RECs to government agencies

GHG Emission Markets
  • Greenhouse Gas Emission Markets
  • Very Early in its Definitions and Rules
  • More Advanced in
  • Europe
  • Japan

5
6
Connecting The Market
U.S. EPA
DuPont
Political Conventions
Mohawk Paper
Yale
WAPA
Staples
Harvard
Nike
IRS
U.S. Air Force
Alcoa
Johnson Johnson
Duke University
St. Columba
Coca Cola
Actual Commercial and Industrial Customers
Local Utility Companies
Sterling Planet Markets Attributes
Bi-Lateral Attribute Contracts
Leveraging EPA Green Partnership Program
Residential Customers
Attribute Contracts (Renewable Energy
Certificates)
Attribute Contracts (Carbon Credits)
Attribute Contracts (White TagsTM)
Solar Project (FL) I
Wind Project (MN) I
Biomass Project (GA) I
Carbon Project Project (TX) 3
Energy Efficiency Project (OR) 2
Wind Project (MN) I
Biomass Project (GA) I
Energy Efficiency Project (OR) I
Solar Project (FL) I
Carbon Project Project (TX) 2
Wind Project (MN) I
Biomass Project (GA) I
Solar Project (FL) I
Carbon Project Project (TX) I
Wind Project (MN) I
Biomass Project (GA) I
Solar Project (FL) I
Solar Project (FL) I
Electricity (Null Power) Contracts - PPA
Local Utility Companies
6
7
Products Services
  • Selling Green Tags or RECs and Carbon Credits)
  • Creating and Selling White TagsTM (Energy
    Efficiency Credits)
  • Manage Residential Green Power Programs (Utility
    Partners)
  • Developing Offsite Fixed-Price Green Electricity
    Projects
  • Developing Onsite Fixed-Price Green Electricity
    Projects

7
8
How It Works?
Green Attributes
Customer Relationship
Metering Point
National Grid
Customer
Local Electric Utility
Electricity
Customer Relationship
Brown Attributes
  • Seven Years of Experience Has Taken Risk Out of
    Business Model
  • Recurring Revenue Stream
  • Market is Rapidly Growing and Becoming
    Mainstream

8
9
Top 25 Renewable Energy Purchasers
  • Ranking of Total Annual

    Load Volume
  • PepsiCo 1 100 1,687,252,361 Sterling
    Planet
  • Wells Fargo 2 42 550,000,000
  • Whole Foods Market 3 100 463,128,000
  • U.S. Air Force 4 4
    457,500,000 Sterling Planet
  • Johnson Johnson 5 39
    400,702,978 Sterling Planet
  • U.S. EPA 6 100 329,880,185 Sterling
    Planet
  • LA County Sanitation Districts 7 57
    196,003,000
  • Starbucks 8 20 185,000,000
  • DuPont 9 4 180,000,000 Sterling
    Planet
  • U.S. DOE 10 3
    165,063,000 Sterling Planet
  • Sterling Planet Has Sold to 6 of the Top 10
    Purchasers

Source U.S. Environmental Protection Agency
9
10
Top 25 Renewable Energy Purchasers (continued)
  • Ranking of Total Annual

    Load Volume
  • Vail Resorts 11 100 152,000,000
  • New York University 12 100 136,000,000
    Sterling Planet
  • HSBC North America 13 35 124,544,000
  • Cisco Systems 14 21 124,105,846
  • Staples 15 20 121,404,000
    Sterling Planet
  • The World Bank Group 16 100 114,735,000
  • University of Pennsylvania 17 29
    112,000,000
  • IBM Corporation 18 4 109,704,000
  • U.S. Department of Veteran Affairs 19
    3 90,000,000 Sterling Planet
  • NatureWorks LLC 20 89 89,000,000
    Sterling Planet
  • Sprint Nextel 21 47
    87,600,000
  • Safeway 22 2 87,000,000
  • Pennsylvania State University 23 20
    83,600,000 Sterling Planet
  • Kohls Department Stores 24 8
    80,152,000
  • Nike 25 72 79,820,000
    Sterling Planet
  • Sterling Planet Has Sold to 12 of the Top 25
    Purchasers

Source U.S. Environmental Protection Agency
10
11
Intersection of RECs, White TagsTM and Carbon
Credits
11
12
What are White Tags?
  • A new tradable attribute similar to green tags
  • or Renewable Energy Credits (REC)
  • Represents the value of energy not used
  • (conserved) at facilities
  • Created through the implementation of energy
  • conservation (Demand-Side Management) projects
  • Also known as Energy Efficiency (EE)
    Certificates
  • White Certificates

12
13
Comparison to RECs
  • White Tags
  • Many Ways the Same
  • Mandated Market - Same States Similar
    Mandates ()
  • Voluntary Market - Same rationale, but larger
    market share (vs mandated)
  • Market Size - Similar, but likely larger with
    broader scope faster adoption
  • Certification - Similar, but more complex
    (savings vs generation)
  • Some Ways Different
  • Regulations - Facility based, not equipment
    based
  • Measurement Verification (MV) - Historically
    problematic

13
14
How are White Tags Created?
  • Implementation of energy conservation projects
  • at a facility, including
  • Equipment upgrades, retrofits, replacement
  • Operational modifications set point changes
  • Energy management and monitoring systems
  • Combined Heat and Power (CHP) or cogeneration
  • New technologies (e.g. High Efficiency Lighting).

Create White Tag
Save
14
15
Where Are White Tags Sold?
  • Implemented in Italy France
  • (Mandated in UK)
  • Mandated in 3 US states
  • Connecticut (2007)
  • Pennsylvania (2007)
  • Nevada (2007)
  • 9 Others Evaluating Concept
  • Likely in 22 other RPS states
  • Mandates require utilities in that state to
    purchase White Tags - creating
  • minimum demand, certain buyers a price floor
  • May be created in one state and sold in another
    (global perspective)
  • May be sold to corporations federal govt
    (CO2 reduction - not mandates)

RPS states shown in yellow red
States that have voluntary renewable energy
goals or RPS-type legislation without enforcement
provisions
15
16
Other Energy Efficiency Regulations/Policy
PA - Tier 2 advanced energy resources must
account for an additional 10 of power sold.
Tier 2 include energy efficiency, hydro, waste
coal generation. NV - 2005 amendment to the RPS
to require Renewable Energy and Energy Efficiency
to meet 20 of electricity by 2015, of which up
to 25 can be met with energy efficiency. Has a
peak demand multiplier. CT 1 by 2007 4 by
2010 Rewriting the Rules. NY Opened Hearings
15 by 2015 is their target. MA Opened
Hearings Goal not yet established. CA Mel
met with the Public Service Commission, CA Air
Board and the California Energy Commission. They
are serious about upcoming legislation. TX
Utilities must offset 10 of demand growth. IL
25 of projected load growth by 2017. HI Energy
efficiency projects are treated the same as
renewables. Federal Government 3 Energy
Efficiency per Agency per Year for next 10
years. Latest Version of Energy Bill (House
Version) 15 National RPS by 2020 (Up to
27 Can Be White Tags 4 RPS) On-Site
Green Power gets 3 RECs per MWh.
16
17
Family of Renewable Technologies Strengths
Weaknesses
Environmental View of Technology

Excellent
Excellent
Good
Average
Average

Infrastructure View of Technology (i.e.
Interconnection Issues and Delivery (i.e. Use of
TD Assets)

Poor
Good
Average
Average
Average


Siting and Location of Technology (i.e. Onsite
Generation and Community Support)

Good
Poor
Average
Average
Average
Electricity Production Value of Technology (i.e.
Baseload, Power Firmness, or Peaking Value)
Sterling Planet
Excellent
Poor
Excellent
Excellent
Good
Cost View of Technology
Terrible
Good
Average
Good
Good
U.S. Jobs and Local Economic Development View of
Technology
Excellent
Poor
Good
Poor
Good
Nationwide Coverage
Excellent
Poor
Average
Excellent
Average
State of Connecticuts Future Opportunities
Excellent
Poor
Good
Poor
Poor
Geothermal
Biomass
Small Hydro
Solar
Wind
17
Average
Excellent
Terrible
Poor
Good
18
Questions?
Contact Information Mel Jones President and
Chief Executive Officer 3295 River Exchange
Drive Suite 300 Norcross, GA 30092-4238 (404)
513-0259 mjones_at_sterlingplanet.com
18
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