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					California’s Renewable Energy Programs
for utility-scale projects




  Implementing one of the most ambitious renewable energy standards in the country



                               Sara Kamins, Senior Policy Analyst
                               California Public Utilities Commission
                               September 16, 2010
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




2
Overview of 20% RPS Program
All California retail energy sellers must procure 20%
renewable energy by 2010
• 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.

3
RPS Program Goals
RPS policy reflects statutory 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”)




4
Status of RPS Procurement
Recent RPS solicitations have been robust
• 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


5
RPS Procurement Process

    CPUC                                      IOU rank bids
                     IOUs hold                                         IOUs negotiate
approves RPS                                    pursuant to
                       annual                                           bids, execute
 procurement                                “least-cost, best-
                    solicitation                                          contracts
    plans                                   fit” methodology


                   • Independent evaluator oversees solicitation, bid evaluation, and
                      negotiations
                   • Utilities can also sign bilateral contracts




 Once the IOU executes contract, must submit to the CPUC for approval




6
                                Large IOU RPS Track Forecasted Generation
                              Utilities on Actual and for RPS Targets
                      100

                      90

                                                                                                                          Almost
                      80
                                                                                                                          at 33%
                                                                                                                          on a
                      70      2020 33% RPS Target                                                                         contract
Energy (MWh) / year




                                                                                                                          basis –
                      60                                                                                                  but
                                                                                                                          some
                                                                                                                          face risk
                      50

                      40
                                              2010 20% RPS Target

                      30

                      20

                      10

                          0
                              2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

                      7                         Online Generation   Expiring Generation   Contracted Generation
                                                Pending Approval    Under Negotiation     Annual RPS Target
Project Development Barriers
RPS solicitations attract larger projects, which face
project development risk and take time to develop

• 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:
     - Transmission                                   - Technology maturity
     - Permitting (CEC and County)                    - Fuel supply
     - Site control (e.g., BLM application process)   - Equipment procurement
     - Project financing                              - Military radar
     - Developer experience


 8
CPUC Working on Solutions
CPUC is working to create multi-agency solutions to
known barriers
•   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


9
                 System-Side DG Programs
                 Program      Participating        Eligible RPS            CPUC Status            Market
                 Size (MW)    Buyers and Sellers   Technologies and                               Opportunity
                                                   Project Size
Feed-In Tariff   500          All IOUs             All technologies        Fully Implemented      Contracts accepted
(AB 1969)                                          Up to 1.5 MW            (D.07-07-027)          until cap reached

Senate Bill 32   750 (incl.   IOUs and municipal   All technologies        CPUC working to        Contracts accepted
                 FIT)         utilities            Up to 3 MW              implement for IOUs     until cap reached

RAM              1000         3 large IOUs         All technologies        Proposed Decision      Proposes 2
                                                   Up to 20 MW                                    auctions per year

SCE Solar PV     500          250 MW UOG           Solar PV                Fully Implemented      At least 1 auction
Program                       250 MW IPP           Primarily rooftop 1-2   (D.09-06-049)          per year, first in
(SPVP)                                             MW                                             4/2010
PG&E Solar       500          250 MW UOG           Solar PV                Approved in            At least 1 auction
Program                       250 MW IPP           Primarily ground-       D.10-04-052, Staff     per year, first in
                                                   mount 1-20 MW           implementing           Q1 2011
SDG&E Solar      100          26 MW UOG            Solar PV                D.10-09-016 approved   At least 1 auction
Program                       74 MW IPP            Primarily ground-       program, Staff to      per year,
                                                   mount 1-5 MW            implement              implementation
SCE RSC          250          IPPs                 All technologies        N/A                    SCE accepting
Program                                            Up to 20 MW                                    bids in September
                                                                                                  2010
    10
Renewable Auction Mechanism
CPUC may offer new simple, streamlined opportunity
for system-side DG consistent with RPS goals
• 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.


11
Questions?

Sara Kamins
Senior Policy Analyst, RPS Team
California Public Utilities Commission
Phone: 415-703-1388
Email: smk@cpuc.ca.gov




12
                                     Large IOU RPS Solicitation Bids
                        RPS        Solicitation Bids by Fuel Type
                                              by Fuel Type
                               Solar participation has increasing most dramatically

                      100
Energy (TWh) / year




                      80



                      60



                      40



                      20



                       0
                            2003     2004        2005              2006         2007     2008    2009
                                                        Solicitation Year

                      13    Wind      Solar     Small Hydro               Geothermal   Biogas   Biomass
Source: California Public Utilities Commission, 1st Quarter 2010
Breakdown of Solar Bids by Technology
                              60



                              50
        Energy (TWh) / year




                              40                                                     35%


                              30                           58%


                              20   63%
                                                                                     65%

                              10
                                                           42%
                                   37%

                              0
                                   2007                    2008                      2009
                                                    Solicitation Year

                                     Solar PV                             Solar Thermal
  14
       Source: California Public Utilities Commission, 1st Quarter 2010

				
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