The Future of Renewable Energy

Renewable Energy SCAMPS Annual Meeting Marcus Harris, P.E. SCE&G, Director, Wholesale Power July 12, 2009 Disclaimer… The opinions stated in this presentation are those of Marcus Harris and may not reflect the opinions or strategies of SCANA Corporation, SCE&G, or any subsidiary of SCANA Corporation. Uncertainty “Periods of great uncertainty produce winners and losers; today is such a period. We are living in a world of heightened anxiety about the future of energy.The concern is not just oil, but nearly every aspect of the energy value chain.The stakes are high for all participants in the global economy…” James Burkhard, Senior Director Cambridge Energy Research Associates Obama – August 2008 The Obama‐Biden comprehensive New Energy for America plan will: • Provide short‐term relief to American families facing pain at the pump • Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future. • Within 10 years save more oil than we currently import from the Middle East and Venezuela combined • Put 1 million Plug‐In Hybrid cars – cars that can get up to 150 miles per gallon – on the road by 2015, cars that we will work to make sure are built here in America • Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025 • Implement an economy‐wide cap‐and‐trade program to reduce greenhouse gas emissions 80 percent by 2050 Obama – March 2009 "So we have a choice to make. We can remain one of the world's leading importers of foreign oil, or we can make the investments that would allow us to become the world's leading exporter of renewable energy. We can let climate change continue to go unchecked, or we can help stop it. We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for lasting prosperity.“ -President Obama, March 19, 2009 Obama – June 23, 2009 This week, the House of Representatives is moving ahead on historic legislation that will transform the way we produce and use energy in America. This legislation will spark a clean energy transformation that will reduce our dependence on foreign oil and confront the carbon pollution that threatens our planet. This energy bill will create a set of incentives that will spur the development of new sources of energy, including wind, solar, and geothermal power. It will also spur new energy savings, like efficient windows and other materials that reduce heating costs in the winter and cooling costs in the summer. These incentives will finally make clean energy the profitable kind of energy. And that will lead to the development of new technologies that lead to new industries that could create millions of new jobs in America, jobs that can't be shipped overseas. At a time of great fiscal challenges, this legislation is paid for by the polluters who currently emit the dangerous carbon emissions that contaminate the water we drink and pollute the air we breathe. It also provides assistance to businesses and communities as they make the gradual transition to clean energy technologies. So I believe that this legislation is extraordinarily important for our country. -Text of Obama Press Briefing U.S. Energy Production and Consumption U.S. Energy Production and Consupmtion U.S. Energy Consumption Energy Sources - 2007 2.5% 3.7% Renewable Energy Definition  Varies greatly depending on  Geographic area  Business interest  Political interest  Included in all (?)  Solar  Wind  Geothermal  Biomass  Hydro – Low-impact  Tidal and Wave  Included in most  Biomass, landfill gas  Included in some  Nuclear Solar Energy  Photovoltaics  Solar cells convert sunlight directly into electricity  Photovoltaic efficiency is currently around 15%  Concentrating Systems  Collect and store the sun’s energy in fluid filled pipes using various mirror mechanisms  The energy stored in the fluid can then be used to turn turbines  Passive  Heating and daylighting  Incorporated into building design  Water Heating  Various systems used to heat water for building heat and energy, direct use Wind Energy  Wind turbines capture energy from the wind  Typically mounted 100 feet, or more, above ground  Stand-alone applications such as water pumping or communications  Multiple units combined to offset grid power  Large, interconnected farms of wind turbines Geothermal  Energy from the earth captured in various forms  Hot water or steam reservoirs deep in the earth  Can be used to drive generators to produce electricity  Heat can be pumped into buildings and industrial processes  Geothermal heat pumps can be used to heat/cool homes and other buildings  Heat energy from the hot rock and magma deep in the earth may be harnessed in the future Biomass  Energy from plant and plant-derived materials  Wood, food crops, grassy plants, agriculture and forestry residues, organic components of municipal and industrial wastes, and methane fumes from landfills  Used as fuels and in products as substitute for fossil fuels  Controversial because of GHG emissions of burning materials Hydro Low-impact  Small hydro projects that have minimal total environmental impact, typically much less than 10 MW  Low Impact Hydropower Institute  Certification  River flows  Water quality  Fish passage and protection  Watershed protectionT  Threatened and endangered species protection  Cultural resource protection  Recreation  Facilities recommended for removal Tidal and Wave  Tidal energy can be used to create electricity from the large energy force behind the tides  Use the kinetic energy of moving tides to power turbines  Wave energy is similar to tidal energy, but instead uses the force behind the waves (not the tide) to generate electricity.  Energy from the rise and fall of the waves captured to create electricity Photovoltaic Potential Concentrating Solar Potential Wind Potential Geothermal Potential Biomass Potential What about Hydrogen?  Fuel cells electrochemically combine hydrogen and oxygen      to produce water, electricity, and heat Hydrogen should be viewed as an energy carrier, rather than a fuel Does not occur naturally by itself Must always be separated from other elements Most hydrogen production in the U.S. today comes from steam reforming of natural gas, essentially trading one relatively clean fuel for another Current research on more efficient ways to extract hydrogen and using renewable energy to extract hydrogen Renewable Energy Requirements  State Requirements  24 states with binding renewable energy requirements  5 states with nonbinding renewable goals  Range from 8% - 40%  Currently no requirement in S.C. State Arizona California Colorado Connecticut District of Columbia Delaware Hawaii Iowa Illinois Massachusetts Maryland Maine Michigan Minnesota Missouri Montana New Hampshire New Jersey New Mexico Nevada New York North Carolina North Dakota* Oregon Pennsylvania Rhode Island South Dakota* Texas Utah* Vermont* Virginia* Amount 15% 33% 20% 23% 20% 20% 20% 105 MW 25% 15% 20% 40% 10% 25% 15% 15% 23.80% 22.50% 20% 20% 24% 12.50% 10% 25% 8% 16% 10% 5,880 MW 20% 10% 12% Washington Wisconsin 15% 10% Year Organization Administering RPS 2025Arizona Corporation Commission 2030California Energy Commission 2020Colorado Public Utilities Commission 2020Department of Public Utility Control 2020DC Public Service Commission 2019Delaware Energy Office 2020Hawaii Strategic Industries Division Iowa Utilities Board 2025Illinois Department of Commerce 2020Massachusetts Division of Energy Resources 2022Maryland Public Service Commission 2017Maine Public Utilities Commission 2015Michigan Public Service Commission 2025Minnesota Department of Commerce 2021Missouri Public Service Commission 2015Montana Public Service Commission 2025New Hampshire Office of Energy and Planning 2021New Jersey Board of Public Utilities 2020New Mexico Public Regulation Commission 2015Public Utilities Commission of Nevada 2013New York Public Service Commission 2021North Carolina Utilities Commission 2015North Dakota Public Service Commission 2025Oregon Energy Office 2020Pennsylvania Public Utility Commission 2019Rhode Island Public Utilities Commission 2015South Dakota Public Utility Commission 2015Public Utility Commission of Texas 2025Utah Department of Environmental Quality 2013Vermont Department of Public Service 2022Virginia Department of Mines, Minterals, and Energy 2020Washington Secretary of State 2015Public Service Commission of Wisconsin *Five states, North Dakota, South Dakota, Utah, Virginia, and Vermont, have set voluntary goals Renewable Energy Requirements Federal  U.S. House of Representatives  Passed the Waxman-Markey “American Clean Energy and Security Act”, H.R. 2454 June 26, 2009  Passed by 219-212 vote  1200+ Pages  Includes 20% renewable energy requirement, carbon cap and trade, energy efficiency requirements, research funding, smartgrid promotion  U.S. Senate  Draft bill currently in the Energy and Natural Resources Committee  Includes 15% renewable energy requirement  Expect debate in late-summer  Will the House and Senate work out an Energy Bill this year? Waxman Markey Renewable Requirement  Requirement on retail, load-serving entities that serve at     least 4 GWh per year Hydro , new nuclear, and GHG sequestered fossil energy deducted from retail energy prior to calculating renewable requirement Requirement begins in 2012 and increase thereafter One fourth may be met with “electricity savings” Regulated and monitored by the Federal Energy Regulatory Commission Renewable Energy Credits  Annual Requirements  2012-2013  2014-2015  2016-2017  2018-2019  2020-2039 6% 9.5% 13% 16.5% 20% Definition of Renewable Electricity  Electricity generated from  Wind  Solar  Geothermal  Renewable biomass  Biogas and biofuels derived exclusively from renewable biomass  Marine and hydrokinetic  Qualified hydropower  Other qualifying energy resources: landfill and wastewater treatment gas, coal mine methane and qualified waste-to-energy Definition of “Electric Savings”  Reductions in electricity consumption, relative to business as       usual projections Customer facility savings Reduction in distribution system losses Combined heat and power savings Fuel cell savings Savings from mandatory building codes and efficiency protocols specifically excluded FERC to establish standards for defining electricity savings Renewable Energy Requirements  One credit is awarded for each MWh generated after December      31, 2011 Credits issued to retail suppliers when generator supported by payments from a retail supplier Otherwise, credits awarded to generator Alternative compliance payment of $25/MWh, adjusted for inflation may be paid to the State to be dedicated to energy efficiency and renewable programs Credits may be sold, transferred, or exchanged, and may be used the year issued or three subsequent years Failure to submit sufficient credits subject retail entity to penalty double the alternative compliance payment Senate Bill  Renewable energy requirement similar  Requires 15% REC’s by 2021  Many issues in Senate Bill Still under development  Likely to be debated in the Fall 2009  Challenging, party-line vote expected