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California Energy Commission
California’s Renewable Energy Program
Kate ZocchettiRenewable Energy Program
California Energy CommissionOctober 18, 2007
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California Energy Commission
California’s Energy Sources
in 2005/2006
PETROLEUM (2005)
NATURAL GAS (2005)
ELECTRICITY (2006)
Source: www.energy.ca.gov/html/energysources.htmlApril 2007
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California Energy Commission
Renewable Energy in California For decades, California led the country and the world in
renewable energy procurement
From its peak in early 1990s, renewable generation declined amid market uncertainties
In 1996, AB 1890 placed surcharge on electricity sold by IOUs to be used to fund public interest programs, including renewable energy
Energy Commission designed Renewable Energy Program, a subsidy mechanism to support renewable development in a market environment
This method for supporting renewables, however, was impacted by the energy crisis of 2000 and 2001
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California Energy Commission
From the Energy Crisis to the Renewables Portfolio Standard
California’s move to a restructured electricity market and resultant energy crisis prompted policymakers to pursue a new method to encourage development of renewable power:
Renewables Portfolio Standard
California’s move to a restructured electricity market and resultant energy crisis prompted policymakers to pursue a new method to encourage development of renewable power:
Renewables Portfolio Standard
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California Energy Commission
California’s Renewable Energy Goals
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20,000
40,000
60,000
80,000
100,000
120,000
1983 1988 1993 1998 2003 2008 2013 2018
Year
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20% by 2017
20% by 2010
33% by 2020
2002 11.0% Renewables (RPS begins)
2006 10.9% Renewables
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California Energy Commission
California’s Energy Action PlanThe energy crisis further underscored California’s economic reliance on a stable energy market. Consequently...
California’s energy agencies adopted the Energy Action Plan I in 2003 and EAP II in 2005 to guide energy policy decisions and actions for CA’s growing energy demand.
Top priorities in California’s loading order policy for electricity are:
Increasing energy efficiency and demand response
Meeting new generation needs first with renewable and distributed generation resources.
Governor Schwarzenegger’s energy policy promotes adequate, affordable and reliable energy supplies and technologies that protect and improve economic and environmental conditions. He strongly supports the EAP’s loading order.
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California Energy Commission
Renewables Legislation
1998 - 2006 AB 1890 and SB 90 created the Renewable Energy Program and directed
the large investor-owned utilities to collect $540 million from 1998 – 2001. AB 995 and SB 1194 extended collection of $135 million per year through
2011. SB 1038 authorized the Renewable Energy Program to use funds
collected from IOU ratepayers from 2002 - 2006. SB 1078 established the Renewables Portfolio Standard that requires
IOUs to increase renewable purchases by at least 1% per year to serve 20% of their retail sales by 2017.
SB 704 required the Energy Commission to allocate $6 million to electricity-generating facilities that increased their use of qualified agricultural biomass during fiscal year 2003-2004.
GOAL: Pursue investments in renewable resources to achieve self-sustaining renewable energy supply for California.
GOAL: Pursue investments in renewable resources to achieve self-sustaining renewable energy supply for California.
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California Energy Commission
Renewables Legislation (cont’d.)
SB 67, AB 200, and AB 2189 modified RPS eligibility requirements.
AB 135 authorized the use of an additional $60 million of future Renewable Energy Program funds for the Emerging Renewables Program.
SB 1 statutorily authorizes and establishes guidelines for the $3.35 billion California Solar Initiative (CSI), a solar installation incentive program.
SB 107 requires retail sellers of electricity to increase renewable energy purchases by at least 1 percent per year with a target of 20% renewables by 2010.
SB 1250 authorizes the Renewable Energy Program to use funds collected from IOU ratepayers from 2007 – 2012.
AB 32 requires that the state’s global warming emissions be reduced to 1990 levels by 2020. Renewable energy plays a significant role.
California Energy Commission
Natural Gas41.5%
Nuclear12.9%
Renewables10.9%
Coal15.7%
Large Hydro19.0%
Wind1.8%
Biomass2.1%
Geothermal4.7%
Small Hydro2.1%
Solar0.2%
California’s Electricity Supply in 2006In-State Generation and Estimated Energy Imports by Fuel Type
Source: 2006 Net System Power Report, Energy Commission Publication, #CEC-300-2007-007. www.energy.ca.gov/2007publications/CEC-300-2007-007/CEC-300-2007-007.PDF
(Includes Energy Imports)
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California Energy Commission
Renewable Energy Program GoalsGoal: Achieve a self-sustaining renewable energy supply for California.Goal: Achieve a self-sustaining renewable energy supply for California.
Optimize public investment and ensure that the most cost-effective and efficient investments in renewable resources are vigorously pursued.
Increase the quantity of California’s electricity generated by renewable resources, while protecting system reliability, fostering diversity, and obtaining the greatest environmental benefits to the state.
Identify and support emerging renewable energy technologies with the greatest near-term commercial promise that merit targeted assistance.
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California Energy Commission
Renewable Energy Program Goals (cont’d.)
Renewables Portfolio Standard GoalsRenewables Portfolio Standard Goals
New Renewable Facilities ProgramNew Renewable Facilities Program
Existing Renewable Facilities ProgramExisting Renewable Facilities Program
Emerging Renewables ProgramEmerging Renewables Program
Consumer Education ProgramConsumer Education Program
RPS goals inform the policies of the other elements in the Renewable Energy Program.
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California Energy Commission
Renewable Energy Program 2002–2006 Funding Allocations
$675 Million*
*Dollars collected are estimated at an average of $135 million per year for five years. The total amount collected each year is adjusted annually at a rate equal to the lesser of the annual growth in electric commodity sales or inflation, as defined by the gross domestic product deflator.
New Renewable Facilitiesand RPS
51.5%($348 M)
Emerging Renewables26.5%
($179 M)
Consumer Education 2%
($13 M)
Existing Renewable Facilities20%
($135 M)
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California Energy Commission
Renewable Energy Program 2007-2011 Funding Allocations
$750 Million*
*Dollars collected are estimated at an average of $150 million per year for five years. The total amount collected each year is adjusted annually at a rate equal to the lesser of the annual growth in electric commodity sales or inflation, as defined by the gross domestic product deflator.
New Renewable Facilitiesand RPS
51.5%($386 M)
Emerging Renewables37.5%
($281 M)Consumer Education
1%($8 M)
Existing Renewable Facilities10%
($75 M)
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California Energy Commission
New Renewable Facilities Program
Currently provides production incentives to 59 “new” in-state renewable generating facilities.
Incentives capped at 1.5 cents per kilowatt-hour. Of the 59 active projects, 47 have been completed and are
producing electricity representing 489 MW of capacity. More than $69 million in incentive payments has supported
about 7,545 gigawatt-hours of generation. When completed, all 59 facilities will bring 809 MW of new
renewables capacity to California’s electricity grid. Under RPS, will provide supplemental energy payments
(SEPs) for above-market costs of procuring renewable energy.
Goal: Accelerate the addition of new renewable capacity to meet California’s growing demand for electricity.Goal: Accelerate the addition of new renewable capacity to meet California’s growing demand for electricity.
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California Energy Commission
Provides production incentives to existing renewable generation facilities.
Payments tied to market prices. Eligible technologies: solid-fuel biomass, solar
thermal, wind. Has helped 273 existing renewable facilities remain
competitive or return to service by paying more than $249 million for 4,400 MW of renewable energy capacity.
Provided $6 million for 2004 Agriculture-to-Biomass Program to improve air quality in CA’s agricultural areas.
Existing Renewable Facilities Program
Goal: Encourage economic viability of existing renewable projects.Goal: Encourage economic viability of existing renewable projects.
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California Energy Commission
Emerging Renewables Program
Provides rebates for purchasing and installing eligible renewable energy systems to offset electricity needs at homes or businesses.
Reduces up-front costs for customers. Through 2006, eligible technologies were solar photovoltaic,
small wind, fuel cells using renewable fuels, solar thermal electric. Effective 1/1/07, only small wind and fuel cells are eligible.
Provided $374 million for distributed PV and wind energy systems installed on 25,680 homes and businesses, providing 113 MW of capacity.
Encumbered $49 million for 3,493 additional systems under construction, to provide 18.2 MW.
Goal: Reduce costs and accelerate market acceptance through high volume production of emerging renewable technologies.
Goal: Reduce costs and accelerate market acceptance through high volume production of emerging renewable technologies.
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California Energy Commission
California Solar InitiativeGOAL: Move California toward a cleaner energy future by creating a sustainable solar market in California.GOAL: Move California toward a cleaner energy future by creating a sustainable solar market in California.
Beginning 2007: California Solar Initiative, largest solar program of its kind
in the country, part of Governor Schwarzenegger’s Million Solar Roofs Initiative
$3.35 billion effort by CPUC, CEC and POUs Residential and nonresidential customers 3,000 MW combined POU/IOU goal Solar industry self-sufficiency in 10 years Emphasis on energy efficiency High performance installations
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California Energy Commission
California Solar Initiative (cont’d.)
CPUC Program
Commercial, Industrial, Existing Residential
$2 Billion*
CEC Program
New Residential Construction
(NSHP)
$400 Million
Publicly-Owned Utility Programs
Eligibility Requirements
under Development
$784 Million
*Additional $100 Million for Solar Thermal and Solar Water Heaters plus
$50 Million for Solar R&D
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California Energy Commission
Incentive of ~$2.50/watt or more based on expected performance
Provides assistance to builders Requires 15% higher energy efficiency than state
building standard (Title 24) New residential construction only: new
homes/developments, Affordable Housing
New Solar Homes PartnershipGOALS: 400 MW installed capacity by end of 2016 All solar systems must be highly energy efficient and
high performing Solar on 50% of new homes
GOALS: 400 MW installed capacity by end of 2016 All solar systems must be highly energy efficient and
high performing Solar on 50% of new homes
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California Energy Commission
Provides information to California consumers to help build a market for renewable energy.
Supports market development of emerging renewables technologies. Provided over $7 million for market research,
21 outreach and demonstration grant projects, and 3 public awareness campaign contracts.
GOALS Raise consumer awareness about renewables and their
benefits Increase purchases of emerging technologies Develop renewable energy education partnerships Track and verify renewable energy procurement
GOALS Raise consumer awareness about renewables and their
benefits Increase purchases of emerging technologies Develop renewable energy education partnerships Track and verify renewable energy procurement
Consumer Education Program
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California Energy Commission
What is WREGIS?Western Renewable Energy Generation
Information System A voluntary, independent renewable energy registry and tracking
system for the Western Interconnect region that:– Uses verifiable renewable energy generation data
– Creates renewable energy certificates (WREGIS certificates)
– Accounts for transactions involving certificates
– Supports voluntary and regulatory markets for certificates
WREGIS launched June 2007
Retail sellers and renewable facilities participating in the California RPS will be REQUIRED to register with and use the WREGIS by January 1, 2008.
– WREGIS fees are being waived for 2007!
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California Energy Commission
Source: Center for Resource Solutions, 2006
ERCOT
NEPOOL GISMRETS
PJM GATS
RRCNJ SRECS
WREGIS
Attribute Tracking Systems
NY GTS
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California Energy Commission
California’s Renewables Portfolio Standard (RPS)
RPS signed into law in 2002 assigning roles to Energy Commission, CPUC, and POUs.
Current legislative goal of 20% of retail sales from renewables by 2010, with increase by at least 1% per year.
Governor Schwarzenegger’s expanded goal to 33% by 2020.
GOAL: Increase the diversity, reliability, public health and environmental benefits of California’s energy mix.GOAL: Increase the diversity, reliability, public health and environmental benefits of California’s energy mix.
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California Energy Commission
Renewables Portfolio StandardsDSIRE: www.dsireusa.org September 2007
State Goal
State RPS
Solar water heating eligible
☼ PA: 18%¹ by 2020
☼ NJ: 22.5% by 2021
CT: 23% by 2020
MA: 4% by 2009 + 1% annual increase
WI: requirement varies by utility; 10% by 2015 goal
IA: 105 MW
MN: 25% by 2025(Xcel: 30% by 2020)
TX: 5,880 MW by 2015
☼ AZ: 15% by 2025
CA: 20% by 2010
☼ *NV: 20% by 2015
ME: 30% by 200010% by 2017 - new RE
☼ Minimum solar or customer-sited RE requirement* Increased credit for solar or customer-sited RE
¹PA: 8% Tier I / 10% Tier II (includes non-renewables)
HI: 20% by 2020
RI: 16% by 2020
☼ CO: 20% by 2020 (IOUs)
*10% by 2020 (co-ops & large munis)
☼ DC: 11% by 2022
☼ NY: 24% by 2013
MT: 15% by 2015
IL: 25% by 2025
VT: RE meets load growth by 2012*WA: 15% by 2020
☼ MD: 9.5% in 2022
☼ NH: 23.8% in 2025
OR: 25% by 2025 (large utilities)5% - 10% by 2025 (smaller utilities)
*VA: 12% by 2022
MO: 11% by 2020
☼ *DE: 20% by 2019
☼ NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops)
☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)
ND: 10% by 2015
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California Energy Commission
CEC-CPUC RPS CollaborationCEC-CPUC RPS Collaboration
CEC ROLE
Certify renewable facilities as eligible for the RPS.
Design and implement accounting system to track and verify RPS compliance.
Distribute Supplemental Energy Payments.
CEC ROLE
Certify renewable facilities as eligible for the RPS.
Design and implement accounting system to track and verify RPS compliance.
Distribute Supplemental Energy Payments.
CPUC ROLEOversight of IOU procurement: Approve procurement plans. Set baselines and targets. Develop market price referent. Develop least-cost-best-fit
process to evaluate bids. Set rules for flexible compliance. Standardize contract terms. Approve/ reject contracts. Ensure RPS competitiveness.
Oversight for other “retail sellers.”
CPUC ROLEOversight of IOU procurement: Approve procurement plans. Set baselines and targets. Develop market price referent. Develop least-cost-best-fit
process to evaluate bids. Set rules for flexible compliance. Standardize contract terms. Approve/ reject contracts. Ensure RPS competitiveness.
Oversight for other “retail sellers.”
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California Energy Commission
RPS Eligible Technologies Biomass Biodiesel Conduit hydro 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 electric Wind
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California Energy Commission
Renewable Development Goals and Statewide Potential
Technical Potential20% by 2010
56,160 GWh/yr
*Estimated potential for other WECC states is 3.7 million GWh/yr
262,150 GWh/yr*
108,000 GWh/yr
33% by 2020
Source: Renewable Resources Development Report and Implementing California’s Loading Order for Electricity Resources
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California Energy Commission
IOU Progress toward 20 Percent Renewables by 2010
Note: IOU percentages based on retail sales; Statewide percentages based on generation.
Sources for 2001, 2004 and 2005 data: California Energy Commission, August 7, 2007, Renewables Portfolio Standard Procurement Verification Report (Tables 7, 15, and 20), CEC-300-2007-001-CMF, located at www.energy.ca.gov/2007publications/CEC-300-2007-001/CEC-300-2007-001-CMF.PDF. *2006 data was submitted by the IOUs in RPS Track Forms, to be verified in the forthcoming 2006 RPS Procurement Verification Report. Total statewide percentages include generation data from the three large IOUs, electric service providers, small and multi-jurisdictional utilities, and local publicly-owned utilities. The data source for the total statewide percentages is the 1983-2005 California Electricity Generation database located at www.energy.ca.gov/electricity/ELECTRICITY_GEN_1983-2005.XLS. Although the total statewide data is incomplete because some entities have failed to report, it represents data from entities serving approximately 95 percent of total state retail sales.
2001 2004 2005 2006PG&E 8.9% 11.6% 11.9% 11.9%
SCE 14.8% 18.2% 17.2% 16.0%
SDG&E 1.0% 4.3% 5.2% 5.3%
IOUsCombined 10.9% 13.9% 13.7% 13.1%Total Statewide 10.5% 10.1% 10.7% 10.9%
Percent Renewables
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California Energy Commission
16.0%14.8%
11.9%
8.9%
5.3%
1%0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
2001 2003 2004 2005 2006
San Diego Gas & Electric
Pacific Gas & Electric
Southern California Edison
California IOU Renewable Progress
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California Energy Commission
IOU RPS Contracts by Technology (MW)
Source: California Energy Commission, Database of IOU Contracts for Renewable Generation, August 6, 2007 update, www.energy.ca.gov/portfolio/IOU_CONTRACT_DATABASE.XLS.
PG&E SCE SDG&E Total
Wind 331 1,939-2,301 338 2,609-2,971
Biogas 50– 55 8 – 9 16 74 - 80
Biomass 45 – 65 44 – 69 20 109 - 154
Geothermal 242 – 370 80 – 220 20 342 - 610
Small Hydropower 1 0 5 6
Solar Thermal 554 500 – 850 399 – 999 1,452 – 2,402
Solar Photovoltaic 7 1 0 8
TOTAL 1,228 – 1,381 2,572 – 3,451 798-1,398 4,598-6,230
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California Energy Commission
RPS Certification 534 facilities are certified as RPS eligible representing
7,453 MW of capacity– 71 facilities are pre-certified representing 7,654 MW of proposed new
capacity.
Fue l # of Facilities M WBiogas 4 7
Biom ass 39 837
Conduit Hydro 8 16
Diges ter Gas 9 24
Geotherm al 43 2,210
Landfill Gas 45 247
MSW 2 27
PV 3 0.023
Sm all Hydro 254 1,246
Solar Therm al 9 379
Wind 118 2,460
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California Energy Commission
Barriers to Achieving RPS Goals Inadequate transmission infrastructure to connect
remotely-located renewable resources Binding 33% goal needed for all retail sellers Uncertainty regarding whether projects with SEPs
awards will be able to obtain project financing Complexity and lack of transparency in RPS process Insufficient attention to the possibility for contract failure
and delay Lack of progress in repowering aging wind facilities Unclear requirements for POUs
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California Energy Commission
Recommendations to Reach20% by 2010
Provide transmission access Improve financeability of SEPs Enforce penalties for noncompliance Increase transparency Incorporate risk of contract failures and delays Require bilateral contracts at or below MPR Use financial incentives Use consistent natural gas price forecasts Encourage repowering of aging wind facilities
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California Energy Commission
Long-Term Strategies to Reach 33% by 2020
Transmission: streamline process, improve CAISO queue, cost allocation
Integration of nondispatchable & intermittent renewables Capture full benefits of renewables in MPR and/or joint
CPUC-CEC process to consider feed-in tariffs Establish market-based mechanisms to value renewable
energy benefits; e.g., GHG adder Evaluate potential structural changes to SEP process
California’s aggressive greenhouse gas reduction goals place added importance on achieving 33% by 2020.
California’s aggressive greenhouse gas reduction goals place added importance on achieving 33% by 2020.
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California Energy Commission
Additional Information
Web Sites: Renewable Energy Program
www.energy.ca.gov/renewables/index.html
New Solar Homes Partnership/California Solar Initiativewww.gosolarcalifornia.ca.gov
California’s Consumer Energy Centerwww.consumerenergycenter.org
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California Energy Commission
Thanks for visiting California!
Kate ZocchettiRenewable Energy Program
(916) 653-4710or e-mail: