smartmeter&projectin&gothenburg,&&sweden&nov 23, 2010 · through the advanced...

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Deployment of the Smart Meters and Feed-in Tariff for Renewable Energy

Market Penetration

23 November 2010 Cairo, Egypt

Prof. Saifur Rahman Virginia Tech, Washington, DC

Invited Talk Cairo University

(c) Saifur Rahman 2

Source: Interna-onal Energy Agency (IEA Sta-s-cs 2007 data, available as of September 2010)

Smart Meter Project in Gothenburg, Sweden

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Smart Meter to Hub -‐ Zigbee Connec;vity

(c) Saifur Rahman 4

Voltage Reduc;on Program in Virginia

In April, 2007, the Virginia State Corporation Commission (SCC) passed legislation enacting a statutory goal of 10% reduction in retail energy consumption over 2006 levels by 2022. One such program is a novel Conservation Voltage Reduction (CVR) program leveraging Advanced Metering Infrastructure for both control and verification purposes.

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(c) Saifur Rahman 5

Voltage Reduc;on Program in Virginia

In Virginia, the electric utility is required to maintain the retail residential voltage within +/- 5% of standard 120V. Through the Advanced Metering Infrastructure (smart meter) the utility is able to maintain the voltage within range. For each 1% voltage reduction, they can reduce the energy consumption between 0.5 to 1%

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Voltage Reduc;on Program in Virginia Fully deployed, CVR systems like this could reduce 2.6 million mega-watt hours per year by 2016. Dominion calculates over $1 billion in customer savings over 15 years and a $600 million total investment.

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Renewable Energy – Deployment Experience


Why some countries are more successful than others ?

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Feed-‐in Tariff (FIT)


FIT is a renewable energy policy that offers guaranteed payments to renewable energy developers for the electricity they produce FITs are responsible for approximately 75% of global PV and 45% of global wind deployment

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Basic FIT Payment Choice


Fixed FIT policies - Guaranteed price for a fixed period of time Premium FIT policies - Either a sliding or a constant premium payment on top of the spot market price

Time

FIT Purchase Price (c/kWh)

FIT Price(c/kWh)

ElectricityPrice(c/kWh)

Time

FIT Premium (c/kWh) FIT Premium

(c/kWh)

ElectricityPrice

Actual FIT Premium Amount (c/kWh)

Source: NREL, “Feed-in-Tariffs: A Policy and Economic Analysis” , 2009

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United States Incentives/Policies for Renewable Energy

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US Federal Incen;ves for RE


Renewable Electricity Production Tax Credit (PTC):

•  Commercial and industrial sectors •  Amount: 2.2¢/kWh for wind; 1.1¢/kWh for other eligible

technologies. Generally applies to first 10 years of operation. •  Carryover Provisions: Unused credits may be carried forward

for up to 20 years following the year they were generated U.S. Department of Treasury - Renewable Energy Grants:

•  Amount: 30% of capital subsidy for solar and small wind •  Ends 12/31/2010


California – Incen;ves and Policies


California Incentives/Policies for Renewable Energy

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California Feed-In Tariff - Performance-Based Incentive (time-differentiated, market-based prices):

Example: FIT for Southern California Edison: At 1 PM on a weekday in June is $0.32/kWh

(baseline grid supplied electricity costs about $0.20/kWh at this time).



Other examples: Property Tax Exclusion for Solar Energy Systems:

•  100% of system value; No maximum cap

California Solar Initiative - PV Incentives - •  Performance-Based Buy-downs for systems under 30 kW at $2.50/W

•  Performance-Based Incentives (PBI) for systems 30 kW and larger at

$0.39/kWh for the first five years

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Virginia – Incen;ves and Policies


Virginia Incentives/Policies for Renewable Energy


Virginia – Incen;ves and Policies

Tenn Valley Authority - Generation Partners Program:

•  $1,000 plus $0.12/kWh above the base rate for Solar •  PPA: 10 years

Property Tax Exemption for Renewable Energy Systems: •  Allows any county, city or town to exempt or partially exempt

solar energy equipment Virginia - Net Metering:

•  Net excess generation credited to next bill at retail rate

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European Union Incentives/Policies for Renewable Energy


Germany: Feed-‐In Tariffs

Cost plus profit model (Fixed FIT Policy):

- Average grid-supplied domestic electricity price: $0.29/kWh

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UK: Feed-‐In Tariffs (April 2010)

Cost plus profit model (Fixed Tariff):

- Average grid-supplied domestic electricity price: $0.30/kWh

Energy Source

Scale FIT(USD/kWh)

Duration(years)

Solar PV < 4kW (New) 0.58 25Solar PV < 4kW (Retrofit) 0.67 25Solar PV > 4-‐10 kW 0.58 25Solar PV > 10-‐100 kW 0.51 25Solar PV > 100kW -‐ 5 MW 0.47 25Wind < 1.5kW 0.56 20Wind > 1.5-‐15 kW 0.43 20Wind > 15-‐100 kW 0.39 20Wind > 100-‐500 kW 0.30 20Wind > 500kW -‐ 1.5 MW 0.15 20Wind > 1.5 MW -‐ 5 MW 0.07 20


Italy: Feed-‐In Tariffs

Average grid-supplied domestic electricity price: $0.35/kWh!

Peak Power/Type Field Plant

Partially Integrated

Fully Integrated(BIPV)

[kW] [USD/kWh] [USD/kWh] [USD/kWh]1 -‐ 3 kW 0.53 0.58 0.65

3 kW to 20 kW 0.50 0.56 0.61 > 20 kW 0.48 0.53 0.58

Grid connection Upto 31.12.2010

2010 Feed-in Tariff

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Spain: Feed-‐In Tariffs

- Retroactive reduction in “subsidies” in 2010 - Average grid-supplied domestic electricity price: $0.19/kWh


Asia Incentives/Policies for Renewable Energy

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India: Feed-‐In Tariffs (Launched -‐ 2009)

Cost plus profit model: Examples: West Bengal: Solar PV @ $0.25/kWh; PPA for 15 years Haryana: Solar PV @ $0.34/kWh; PPA for 5 years Rajasthan: Solar PV @ $0.35/kWh; CSP @ $0.31/kWh Tamil Nadu: CSP @ $0.27/kWh; Wind @ $0.08/kWh Average grid-supplied domestic electricity price: $0.08/kWh


China: Feed-‐In Tariffs

- Wind tariffs based on resource intensity $0.08–0.09/kWh - Average grid-supplied domestic electricity price: $0.05/kWh

Roof-‐top $ 2.26/WattBIPV $3.01/Watt

Grid-‐connected 50% of total project costOff-‐grid 70% of total project cost

FIT for Solar PV -‐ 2010 Auction-‐based price discovery

BIPV capital subsidy (> 50 kW): 2009-‐2011 -‐ PHASING OUT

Golden Sun capital subsidy (> 300 kW): 2009-‐2011 -‐ PHASING OUT

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Japan: Feed-‐In Tariffs

Residential Solar - “Net" feed-in tariff - A variant of net-metering where only excess generation receives payment

-  Term: 15-20 years -  Average grid-supplied domestic electricity price: $0.23/kWh

Year 2009(USD/kWh)

Year 2010(USD/kWh)

Rooftop PV -‐ "Net" FIT 0.58 0.58Large scale PV 0.29 0.29Wind -‐ 0.17


Thailand: Feed-‐In Tariffs (Launched 2006)

Avoided cost + Premium (called an “adder”):

-  Total FIT = 0.12 +0.34 = $0.46/kwh -  Average grid-supplied domestic electricity price: $0.12/kWh

Energy Source

AdderAdditional for

diesel offsetting areas

Additional for 3

southern provinces

Duration(Years)

Wind [USD/kWh] [USD/kWh] [USD/kWh] <= 50 kW 0.13 0.05 0.05 10 > 50 kW 0.10 0.05 0.05 10 Solar 0.24 0.05 0.05 10

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Feed-‐In Tariffs – Best Prac;ces -  Payments based on the cost of generation

-  Payments differentiated by technology type, project size, location, and resource quality

-  Contracts are based on lifetime of the project -  Policy stability is as important to investors as initial price

-  Clear interconnection rules and cost allocation procedures (e.g. for T&D)

-  Larger projects need to provide daily/hourly forecasts to facilitate grid balancing

Source: NREL, “A Policymaker’s Guide to FIT Policy Design”

(c) Saifur Rahman

Key Market Strategies

n  Price Support/Policies • Tax Subsidies • Min Fixed Payment Prices • Mandates (Renewable Portfolio Standards)

n  Cost Reductions/Balance of Systems

n  New Technologies

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Thank You

Saifur Rahman

Email: [email protected]

www.SaifurRahman.org

smartmeter&projectin&gothenburg,&&sweden&nov 23, 2010 · through the advanced...

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