is the renewable energy foundation right about uk wind subsidies?
TRANSCRIPT
REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 1
Is the Renewable Energy Foundation
Correct about UK Wind Subsidies?
Renewable Energy World Europe 2012Renewable Track
Session 3: Renewable Energy Policy & FinanceLeslie Martel Baer, MS, MA, Strategist
13 June 2012
REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 2
Acknowledgements University of Colorado Business
School Global Energy Management Program
Herb Rubenstein, Lecturer John Constable, Head of Policy &
Research, Renewable Energy Foundation
13 June 2012
REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 3
Agenda Renewable energy policies
Why RE policies?How do different policies compare?
The Renewable Energy Foundation and wind Other models
Colorado: Wind as a least cost sourceNREL: Room for coalRMI: Down to 26% Fossils by 2050
Wrap up, Q&A
13 June 2012
REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 4
A Response to Climate Change
Renewables Policies
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 5
Example:UK Renewables Obligation (RO) Establishes a
standard for electricity suppliers
Suppliers meet standard through ROCs
Suppliers pass cost to consumers
Regressive mechanism
Efficient market (?)
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 6
Example:US’s Production Tax Credit Credit to
developers Requires either
Raising of taxesCutting of
programs Can be regressive Attractive only to
developers with a tax bill to offset
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 7
Total Installed Wind Generation Capacity, 1992–2010
Stability Matters: U.S. driven by temporary stability, multiple incentives, urgency
1992 1997 2002 20070
10000
20000
30000
40000
UKU.S.Colorado
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 8
Wind Generation Capacity as a Percentage of Total Capacity1992–2010
Colorado’s RES Similar to UK’s RO: Paid for by rate payers
U.S. states are driving RE action
1992 1997 2002 20070%
2%
4%
6%
8%
10%
UKU.S.Colorado
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 9
What is theRenewable Energy Foundation? Non-profit Think tank “sustainable
development for the benefit of the public by means of energy conservation and the use of renewable energy”
Award winning Other Agenda?
REF’s Approach Analyze the data Empirical research
REF’s Conclusion The RO is regressive Hurts consumers Emphasize
○ Efficiency○ Baseload
renewables
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 10
REF’s Evolving Stance
2006: 25 GW wind may be too much
Distributed wind helps smooth variability; resource remains volatile
Weather systems are bigger than countries, making smoothing difficult
Wind requires firm generators to cycle more than without wind
Wind reduces investment in more firm renewables
Dramatic increases of wind could cause struggles with system balancing
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 11
REF’s Evolving Stance
2006: 25 GW wind may be too much
2011: Address indirect & direct costs, macroeconomics
Distributed wind helps smooth variability; resource remains volatile
Weather systems are bigger than countries, making smoothing difficult
Wind requires firm generators to cycle more than without wind
Wind reduces investment in more firm renewables
Dramatic increases of wind could cause struggles with system balancing
Avoid regressive RE levies Non-profits: implement climate,
efficiency agenda Efficiency to cushion lower
income consumers from prices Focus: firm generation
(biomass), district heating (waste)
Policies, costs, savings on bills Make data accessible and more
transparent to consumers
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 12
Where Do REF’s Recommendations Apply? Policy-making bodies: dig deep into
the technical and economic implications
Question “prevailing wisdom” Regionalism is crucial for analysis
(REF’s analyses do not apply globally)
A “price” on carbon emissions may ultimately be the best mechanism for market efficiencies13 June 2012
REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 13
The AlternativesOther Models
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 14
Colorado GEO:Wind as a Least Cost Resource Utility-scale RE
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REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 15
Colorado GEO:Wind as a Least Cost Resource Utility-scale RE Water issues
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Colorado GEO:Wind as a Least Cost Resource Utility-scale RE Water issues Large geographic
region; weather systems factor differently
Large grid; balancing factors differently
Mid-continent NG (?)13 June 2012
REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 17
NREL: Making Room for Coal The “right”
carbon cap and RPS
Reduce emissions w/ more coal in portfolio (not CCS)
Cheap domestic fuel
Modest impact to prices
Unlikely, but feasible
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Reinventing Fire:An Optimal Energy Scenario to 2050One of Rocky Mountain Institute’s scenarios shows the “best case” dovetails with REF’s recommendations:
• Incentivize efficiency and DSM first, fairly
• Renewables make it to parity
• Transparency for and by producers, suppliers, consumers is essential
• Players operate under values, goals that fit their functions (e.g., suppliers supply)
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Is REF Right? Yes…
We need people asking these questionsThe UK focus is not in the best placeOther think tanks support REF’s analysis○ Efficiency and DSM are the crucial first steps○ RPSs and carbon caps will change the landscape
But…Solutions are not globalPolicies must consider the region
13 June 2012
REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 20
Please contact mewith questions
Renewable Energy World Europe 2012Renewable Track
Session 3: Renewable Energy Policy & FinanceLeslie Martel Baer, MS, MA, Strategist
13 June 2012