Energy Security through Distributed Generation

THE UNITED STATES IS AT GRAVE RISK TO BOTH “MALIGNANT” AND “MALEVOLENT” DISRUPTIONS TO THE GRID AND THAT THREAT CAN BE ADDRESSED THROUGH DISTRIBUTED RENEWABLE GENERATION WHICH CAN SIMULTANEOUSLY REDUCE THE IMPORTANCE OF OIL TO THE IGNOMINIOUS FALL FROM GRACE OF SALT.

– R. JAMES WOOLSEY, FORMER CIA DIRECTOR

Over 50% increase in electricity prices during the last decade

Source: Energy Information Administration

Rate Increases Expected to Continue

Source: Bradenton Herald

Source: South Florida Sun-Sentinel

Add the Concern for the Environment and National Security

• Wind• Solar Thermal• Hydro• Biomass• Geothermal• Waste to Fuel

• Ocean Gradient

• Tidal Power

• Hybrid Systems• Fuel Cell

• Solar Photovoltaics

Distributed Generation

Floridians Need a Sustainable Energy Policy

• 2006 - SB8888 Created a solar rebate program

• Rebates jumpstarted industry for two years

• Funding fell short• Industry pulled back• Renewable energy

rollercoaster• This discourages

investment

What attracts debt investments?

• Long Term Fixed price contracts.

• Investment Grade Backing.

• Stability and Security.

Source: Good Energies

What gets financed

• Fixed, long term contracts

• Low default risk• Dedicated funding

source• Policy makers who

“get it”

"There's enormous potential for new jobs and reduced carbon pollution just by implementing existing technologies like energy efficiency and wind energy, but we also need to develop transformative new solutions. As a scientist, I remain optimistic that these breakthroughs are within our reach, and investments like these are an important part of achieving them."

Steven Chu Ph. D. Secretary Dept. of Energy

PRODUCTION BASED INCENTIVES

What is the solution?

What are PBIs

• Allows consumers to generate electricity for a profit

• Payments based upon energy produced • Allows anyone to sell Renewable Energy

to the grid• Utilities will buy renewable electricity at a

fair price for a fixed period of time• Includes all sources of renewable energy

From Centralized Production and Delivery by Utilities

Utility

Homes Schools Business Church

To Distributed Production

Utility

Homes Schools Business Church

25 MWSolar Farm

“Solar on Every Rooftop and Widespread Renewables”

Why PBIs?

• Quickest way to increase the use of renewable energy by consumers

• Proven least cost to rate payers for rapid renewable energy transition

• Increased energy production significantly for the states/countries where adopted

• Slowed the increase in energy costs by replacing fossil fuel

* Above facts from National Renewable Laboratory reports, EPIA reports & World Future Council

Benefits

CommunityCommunity

Job Creation Boom of local and foreign investment

Creates local wealth

Stabilize Energy Costs

InvestorsInvestors

Simplicity

Guaranteed Revenue Stream

Predictable Returns

Renewables Enhance Property Values

Environment/Environment/SecuritySecurity

Reduce dependence on foreign oil

Improve national security

Protect our health

Global Warming

Everyone can participate. The average American can become an entrepreneur by selling the electricity that they produce.

Common Concerns

A New A New ParadigmParadigm

• Centralized vs. Distributed Production• Opens market

• Individual producers get paid vs. utility• Imagine the possibilities

CostCost• PBIs increase cost to ratepayers• PBIs 1% vs. 3% annual increase in fossil fuels

• Renewable more expensive than fossil• Hidden costs of fossil fuels

Source: BMU, 2008, NREL 2009

Total Jobs in RE Sector (2007)

0

50

100

150

200

250

300

Ge

rma

ny

Sp

ain

UK

Ita

lyTot

al J

obs

in R

E S

ecto

r ('0

00)

N/A

Germany & Spain use a FIT Model while UK & Italy use a REC Model

Total Generation from Biomass Sources (2006)

0

20

40

60

80

100

120

140G

erm

an

y

Sp

ain

UK

Ita

ly

To

tal G

en

era

tio

n (

TW

h)

Total Generation from Wind Power (2006)

0

5

10

15

20

25

30

35

Ge

rma

ny

Sp

ain

UK

Ita

ly

To

tal G

en

era

tio

n (

TW

h)

Source: BMU, 2008, NREL 2009

Germany & Spain use a FIT Model while UK & Italy use a REC Model

Total Installed Solar PV Capacity (2006)

0

500

1000

1500

2000

2500

3000

3500

Ge

rma

ny

Sp

ain

UK

Ita

ly

Ins

talle

d C

ap

ac

ity

(M

W)

Who benefits from a PBI policy?

Individuals and residents Small businesses Commercial Developers Finance Community Industry & Trade Associations Solar producers Renewable energy producers Climate Groups Electricians Local Governments Municipalities Churches and houses of worship Green Building Industry Environmental organizations Communities with common areas Condo organizations Farms & Ranches Individuals who can produce renewable energy 67 counties and over 175 cities in Florida.

WHY NO PBIs?

Expected Profit/kWh for Onshore Wind 2006

0

1

2

3

4

5

6

7

8

Ge

rma

ny

Sp

ain

UK

Ita

ly

Ex

pe

cte

d P

rofi

t (E

uro

ce

nts

/kW

h)

Germany & Spain use a FIT Model while UK & Italy use a REC Model

“Solar on Every Rooftop and Widespread Renewables”