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Home My WebLink AboutWEATS Renewable Energy Policy Driving Force 08-14-2007Renewable Energy Policy:A Driving ForceChris RoseExecutive DirectorRenewable Energy Alaska Project (REAP)WEATSAnchorage, AlaskaAugust 14, 2007 What is Renewable Energy Alaska Project (REAP)?•Alaska’s first and only education and advocacy group for renewable energy •An Alaskan coalition of small and large electric utilities and utility interests, environmental groups, consumer groups, businesses, Alaska Native organizations and energy agencies with the goal of “increasing the production of renewable energy in Alaska.” REAP Director MembersChugach Electric Association (CEA)Municipal Light and Power (ML & P)Golden Valley Electric Association (GVEA)Homer Electric Association (HEA)Kotzebue Electric Association (KEA)Alaska Village Electric Cooperative (AVEC)TDX PowerAlaska Power Association (APA)Alaska Power and TelephoneSierra ClubAlaska Center for the Environment Alaska Conservation AllianceAlaska Public Interest Research Group (AkPIRG)Rural Alaska Community Action Program (RurALCAP)Green StarChena Hot SpringsPowerCorp Alaska, Inc.Siemens Building TechnologiesAlaska Inter-Tribal CouncilAleutian/Pribilof Islands Association (APIA)Yukon River Inter-Tribal Watershed Conference REAP ADVISORY MEMBERSAlaska Energy AuthorityNational Renewable Energy LabDenali CommissionAlaska Housing Finance CorporationCold Climate Housing Research CenterUS Department of Agriculture Rural Development REAP’s Strategies • Put viable renewable energy projects in the ground•Advocate for statewide policies that promote renewables•Grow the market for renewable energy •Foster and demonstrate stakeholder unity in support of renewable energy•Promote energy efficiency What is Renewable Energy?• Wind•Geothermal•Solar•Biofuels•Hydro•Tidal & Wave Advantages of Renewable Energy• No fuel costs = stable prices•Local•Clean •Inexhaustible Renewable Energy is Risk Management:Worldwide Energy Use Expected to Double by 2050800600400200019701990201020302050ProjectedTo DateYear Renewable Energy is Risk ManagementTwo Thirds of the World’s Proven Conventional Oil Reserves are in the Persian Gulf Renewable Energy is Risk Management:Natural Gas Prices are Uncertain02468101214161990199119921993199419951996199719981999200020012002200320042005200620072008200920102011Nominal $/MMBtu (Henry Hub)0246810121416Nominal $/MMBtu (Henry Hub)Source: LBNLNYMEXnatural gas futures stripfrom 07/21/2006Daily price history of 1st-nearbyNYMEX natural gas futures contract Widespread anticipation that CO2will soon get a value Recent US Supreme Court decision ruled that CO2is a “pollutant” under the Clean Air ActCongress is considering over ten different options today$10 - $85 per ton of CO2Many utilities are already figuring carbon risk into their integrated resource plans (IRPs)Renewable Energy is Risk Management:A Carbon Tax is Inevitable Renewable Energy is Risk Management:The World’s Climate is Changing“For Swiss Re, climate change is more than a scientific issue. It is a financial issue.”Chris Walker, Managing Director, Greenhouse Gas Risk Solutions Unit for Swiss Re, the world’s second largest re-insurer Renewable Energy is Risk Management:The $40 billion/yr Clean Energy Market is Expected to Quadruple by 2015• General Electric•Goldman Sachs•Siemens•British Petroleum•FedEx Kinkos 050001000015000200002500030000350004000019821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004Capacity (MW)United StatesEuropeRest of World1. Germany: 16500 MW2. United States: 6800 MW 3. Spain: 6202 MW4. Denmark: 3121 MW5. India: 2800 MWSource: WindPower MonthlyWorld total 2004: 46048 MWTotal Installed Wind CapacityWind is the Fastest Growing Energy Sector in the World Federal Production Tax Credit• Primary Federal Policy•1.9 cent kWh tax credit•Expires December 31, 2008 Recent Wind Project Development Has Largely Been Driven by State Policy Renewables Portfolio StandardsState Goal☼PA: 18%¹ by 2020☼NJ: 22.5% by 2021CT: 10% by 2010MA: 4% by 2009 + 1% annual increaseWI: requirement varies by utility; 10% by 2015 GoalIA: 105 MWMN: 25% by 2025;(Xcel: 30% by 2020)TX: 5,880 MW by 2015*NM: 20% by 2020 (IOUs)10% by 2020 (Co-ops)☼AZ: 15% by 2025 CA: 20% by 2010☼NV: 20% by 2015ME: 30% by 2000;10% by 2017 goal - new REState RPS*MD: 7.5% by 2019☼Minimum solar or customer-sited requirement* Increased credit for solar or customer-sited¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resourceHI: 20% by 2020RI: 15% by 2020☼CO: 10% by 2015☼DC: 11% by 2022DSIRE: www.dsireusa.org March 2007☼NY: 24% by 2013MT: 15% by 2015*DE: 10% by 2019IL: 8% by 2013VT: RE meets load growth by 2012Solar water heating (SWH) eligible*WA: 15% by 2020 State Production Tax Credits•Examples:–New Mexico:10 years, 1 cent/kWh–Oklahoma:Through 2011, 0.25-0.75 cents/kWh•Issues:–Transferability:Allow non-taxable entities to transfer credit to taxable entities (e.g., Oklahoma)–Federal PTC:May not need to worry about federal PTC impacts – private letter ruling suggests that state PTCs will not impact federal PTC Integrated Resource Planning: It’s BackWestern IRPs are leading to significant planned wind investments, above and beyond RPS requirements Feed In TariffsUsed extensively in EuropeOntario’s Standard Offer ProgramEstablished in 2006 through the Ontario Power AuthoritySets a price for electricity generated by small generators of electricity (under 10MW) from renewable resources like solar, wind, small hydro and some biomassTwenty (20) year contractsGenerators pay all interconnections and licensing feesPrices paid for wind, small hydro and biomass begin at 11¢/kWh in 2006 and escalate over the 20 years42 ¢/kWh for solar photovoltaic projects Public Benefit Funds for RenewablesFunded by Voluntary Contributions$127 $85 $80 $22 $111 $2,048$95 $10 $20 RI: $10MA: $383 NJ: $279 DE: $11 CT: $338 Cumulative 1998 – 2017 (Million $)15 State Funds + DC$4 B by 2017www.dsireusa.org February 2007DC: $10.5 $1,122VT: $36 2007 Alaska Legislative SessionREAP Policy Consensus:Renewable Energy Fund Loans and production creditsGrants with matching moniesAdministered by the Alaska Energy Authority withseven member energy stakeholder oversight committeeappointed by the GovernorFunded with capital appropriationsHB152Passed the House 35-0Needs just one more Senate (Finance) Committee hearing23 sponsors in House13 sponsors in the Senate Why Renewables Now?• Natural gas is becoming less available and more expensive & the Railbelt’s natural gas turbines are aging•Diesel prices are driving people out of rural Alaska•Alaska could become a world leader in diesel (e.g. wind-diesel) hybrid technology•Without sequestration new coal plants will increase CO2emissions and be subject to expensive carbon regulation* Power plants last 20-50 years* Many major decisions for Alaska’s long term future will be made in the next 5-10 years Iceland’s Vision Thanks!Chris RoseREAP Executive Director308 G Street, Suite 218Anchorage, Alaska 99501907-929-7770907-745-6000crose@alaska.netalaskarenewableenergy.org