implementing one of the most ambitious renewable energy standards in the country california’s...
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Implementing one of the most ambitious renewable energy standards in the country
California’s Renewable Energy Programs
Implementing one of the most ambitious renewable energy standards in the country
Sara Kamins, Senior Policy AnalystCalifornia Public Utilities CommissionSeptember 16, 2010
for utility-scale projects
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Presentation Overview
• Renewables Portfolio Standard (RPS) program overview
• Progress toward RPS targets
• Project development barriers
• Solutions for achieving RPS in a cost-effective and timely manner
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Overview of 20% RPS Program
• All RPS-obligated retail sellers* must have procured an incremental 1% of retail sales (from baseline year) in renewable energy per year until 2010
• 20% obligation starts in 2010 and continues indefinitely
• California has a further goal of 33% by 2020
• RPS satisfied by MWhs generated on system-side of meter and delivered to CA, when applicable
• Bundled contracts only now, but potentially tradable RECs soon
*RPS-obligated entities include: Investor owned utilities, energy service providers, small and multi-jurisdictional utilities, and community choice aggregators. Municipal utilities (not regulated by the CPUC) have a voluntary RPS obligation.
All California retail energy sellers must procure 20% renewable energy by 2010
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RPS Program Goals
• Statutory goals of the RPS include:– Diversifying California’s electricity supply for reliability, public
health and environmental benefits– Promoting stable electricity prices by hedging against volatile
natural gas prices– Stimulating sustainable economic development– Developing competitive procurement process to obtain least-
cost, viable MWhs in a short time frame (“cost, risk, time”)
RPS policy reflects statutory goals
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Status of RPS Procurement
• CPUC has approved ~166 contracts for over ~13,000 MW of new and existing eligible renewable energy capacity
– ~5,000 MW of long and short term contracts currently under review
• ~1080 MW of projects under long-term contracts have come online since 2003, 50% out-of-state
• ~1000 MW of projects under short-term contracts have come online since 2003; 99% out-of-state
• Participation in RPS solicitations is increasing: – Greater participation from larger and more experienced developers
– Dramatic increase in number of solar PV bids
– 2009 RPS solicitation resulted in 100,000 GWh of bids
– Shortlisted 2009 bids would meet half of IOUs’ 33% target
Recent RPS solicitations have been robust
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RPS Procurement Process
CPUC approves RPS procurement
plans
IOUs hold annual
solicitation
IOU rank bids pursuant to “least-cost,
best-fit” methodology
• Independent evaluator oversees solicitation, bid evaluation, and negotiations• Utilities can also sign bilateral contracts
IOUs negotiate bids, execute
contracts
Once the IOU executes contract, must submit to the CPUC for approval
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0
10
20
30
40
50
60
70
80
90
100
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
En
erg
y (
MW
h)
/ ye
ar
Online Generation Expiring Generation Contracted Generation
Pending Approval Under Negotiation Annual RPS Target
2020 33% RPS Target
2010 20% RPS Target
Almost at 33% on a contract basis – but some face risk
Utilities on Track for RPS Targets
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Project Development Barriers
• Of 140 approved contracts, 23 have been terminated and 10 are
delayed (have missed commercial online date)
• CPUC identifies and tracks the development barriers for each
approved RPS project
• Significant project development barriers:
RPS solicitations attract larger projects, which face project development risk and take time to develop
- Transmission
- Permitting (CEC and County)
- Site control (e.g., BLM application process)
- Project financing
- Developer experience
- Technology maturity
- Fuel supply
- Equipment procurement
- Military radar
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CPUC Working on Solutions
• Tradable Renewable Energy Credits (TRECs)– Increases procurement options and increases competition
• Renewable Energy Transmission Initiative (RETI)– Identifies most cost-effective renewable resource zones and transmission to access them
• 33% Implementation Analysis– Analyses costs and tradeoffs between various 33% RPS scenarios
• More robust long-term procurement planning methodology– Streamlining inputs and assumptions in utility procurement scenarios to understand their
fossil needs in relation to all other demand and supply-side energy programs
• Programs aimed at smaller system-side DG projects
– To hedge against risk and timing of larger-scale RPS projects, programs for smaller RPS-eligible projects emerging
CPUC is working to create multi-agency solutions to known barriers
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Program Size (MW)
Participating Buyers and Sellers
Eligible RPS Technologies and Project Size
CPUC Status Market Opportunity
Feed-In Tariff (AB 1969)
500 All IOUs All technologies
Up to 1.5 MW
Fully Implemented (D.07-07-027)
Contracts accepted until cap reached
Senate Bill 32 750 (incl. FIT)
IOUs and municipal utilities
All technologies
Up to 3 MW
CPUC working to implement for IOUs
Contracts accepted until cap reached
RAM 1000 3 large IOUs All technologies
Up to 20 MW
Proposed Decision Proposes 2 auctions per year
SCE Solar PV Program (SPVP)
500 250 MW UOG
250 MW IPP
Solar PV Primarily rooftop 1-2 MW
Fully Implemented (D.09-06-049)
At least 1 auction per year, first in 4/2010
PG&E Solar Program
500 250 MW UOG
250 MW IPP
Solar PV Primarily ground-mount 1-20 MW
Approved in D.10-04-052, Staff implementing
At least 1 auction per year, first in Q1 2011
SDG&E Solar Program
100 26 MW UOG
74 MW IPP
Solar PVPrimarily ground-mount 1-5 MW
D.10-09-016 approved program, Staff to implement
At least 1 auction per year, implementation
SCE RSC Program
250 IPPs All technologies
Up to 20 MW
N/A SCE accepting bids in September 2010
System-Side DG Programs
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Renewable Auction Mechanism
• Key program design elements of RAM include:– Standard Contract
o Simple contract based on the IOUs’ existing feed-in tariff contract.
o Terms and conditions are set before the auction and cannot be negotiated.
– Market-Based Pricing
o Sellers compete for a contract in a renewable auction mechanism.
o Bids are selected by least-cost price first until the auction capacity cap is reached.
o Price (and contract) is not negotiable and is paid as bid.
– Project Viability
o Minimum viability criteria to participate in the auction, e.g. 100% site control, developer experience constructing a project of similar technology and size.
o Project development security, performance assurance (for >5 MW projects).
o Project must be online within 18 months.
CPUC may offer new simple, streamlined opportunity for system-side DG consistent with RPS goals
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Questions?
Sara KaminsSenior Policy Analyst, RPS TeamCalifornia Public Utilities CommissionPhone: 415-703-1388Email: [email protected]
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0
20
40
60
80
100
2003 2004 2005 2006 2007 2008 2009
Solicitation Year
En
erg
y (
TW
h)
/ ye
ar
Wind Solar Small Hydro Geothermal Biogas Biomass
Source: California Public Utilities Commission, 1st Quarter 2010
Solar participation has increasing most dramatically
RPS Solicitation Bids by Fuel Type
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Breakdown of Solar Bids by Technology
0
10
20
30
40
50
60
2007 2008 2009
Solicitation Year
En
erg
y (T
Wh
) /
year
Solar PV Solar Thermal
Source: California Public Utilities Commission, 1st Quarter 2010
63%
58%
35%
65%
42%37%