Opportunity in the Old Dominion: What the Virginia Clean Economy Act Means for Business An Advanced Energy Economy Webinar [May 19, 2020] 0
Opportunity in the Old Dominion: What the Virginia Clean Economy Act Means for Business Panelists: • Sen. Jennifer McClellan (D-9th District) • Rick Counihan , Global Lead Energy Product Policy & Regulation, Google • Hayes Framme , Government Relations & Communications Manager, Ørsted • Devin Welch , Chief Executive Officer, SunTribe Solar • Harry Godfrey , Executive Director, Virginia AEE 1
Sen. Jennifer McClellan (D) 9 th Va. Senate District 2
Live Poll Let’s find out a little about you! 3
Virginia Clean Economy Act: Deep Dive 4
Key Components of the VCEA Clean Demand Energy Unshackling Pathway to Side Standard Distributed Zero Prioritization (RPS) Generation Emissions (EERS) + Storage Complementary Components 5
Energy Efficiency Standards EE Targets 2022-25 6.00% 5% Total Annual Savings (% Retail Sales) 5.00% 4.00% 3.75% Demand 3.00% 2.50% Side Prioritization 2% 2.00% (EERS) 1.50% 1.25% 1% 1.00% 0.50% 0.00% 2022 2023 2024 2025 Dominion Appalachian 6
Components for Distributed Generation • 1% RPS Carve-out for Distributed Generation – 25% of carve-out directed to low-income projects as available • Raises NEM cap from 1% to 6% – 1% Reserved for NEM projects service low-income communities – SCC Revisits NEM tariff at 3% or by date certain (2024 / 25) • Raises PPA cap: Unshackling – Dominion: 1,000 MW (500 jurisdictional / 500 non jurisdictional) Distributed – Appalachian: 40 MW Generation • Raises DG ceiling 1 MW à 3MW for individual project • Raises standby threshold for Res. Projects 10KW à 15KW 7
Annual RPS Program Requirements 100% 90% Renewables (as % of total electric energy) 80% 70% 60% 50% Clean 40% Energy Standard 30% (RPS) 20% 10% 0% 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 1 2 3 4 6 7 8 9 1 0 0 5 0 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 2 3 4 4 5 0 0 0 0 0 2 2 2 2 2 Dominion Appalachian Power 8
Renewable & Energy Storage Deployment Targets Year (Petition to SCC) Onshore RE (Dominion) Onshore RE (Appalachian) 2023 N/A 200 MW 2024 3,000 MW N/A 2027 3,000 MW 200 MW 2030 4,000 MW 200 MW 2035 6,100 MW N/A Clean Energy + Year (Petition to SCC) Storage (Dominion) Storage (Appalachian) Storage 2035 2,700 MW 400 MW Deployment Year (In Service) Offshore Wind (Dominion) 2028 2,500 – 3,000 MW 2034 2,100 – 2,600 MW 9
Pathway to Zero: Carbon Mitigation & Retirements • Air Board directed to establish emission regulations for large plants b/t 2031 & 2050 – Effectively picks up where RGGI stops (RGGI enacted separately) – No emissions permits may be issued post-2049 • Retirement Deadlines for IOU Plants: – 2024: All coal-fired generation (except for VCHEC & Clover) – 2028: All biomass-fired generation Pathway to Zero – 2045: All generation that emits carbon Emissions • Social Cost of Carbon: – SCC must consider social cost of carbon when evaluating applications for new generating facilities 10
Additional Key Components: • Accelerated Buyer Provisions (RPS & OSW): – Applies to buyers with an aggregate load >25MW – Accelerated Buyers may be exempt from utility RPS costs equal to the portion of their load covered by eligible RE resources / contracts • Low-Income (LI) & Historically Disadvantaged (HD) Comm. Provisions: – Percentage of Income Payment Program (PIPP) – Sets policy of Commonwealth to prioritize LI & HD Communities in RE development job training, energy programs, etc. – Triennial DMME & EJ Council Report re: VCEA’s impact to LI & HD communities 11
SCC Regulatory Milestones (2020-25) 2020 – 2021 2022 – 2023 • Energy Storage interim targets & regs • Evaluation of IOU’s EE performance* • Universal svc. fee to support PIPP • Report to GA re: EE feasibility* • Non-bypassable tariff proceeding for • [Admin] Recs on 100% clean - include CSP customers* Fossil CPCN Moratorium rec. • Est. rules for Large C&I EE opt-out • [Admin] Report re: VCEA & Disadvantaged Communities** • Utilities’ RPS obligations* 2024 – 2025 • Net Metering proceedings for IOUs * Repeats on annual basis • Est. new triennial EE targets (to start ** Repeats on a triennial basis the following year)** 12
Richard Counihan Google 13
Google Makes the Nest Learning Thermostat 14
Smart Thermostats Have Multiple Benefits • For the Customer – Energy Savings – Convenience!! • For the Utility – Energy Efficiency – Demand Response – Peak Load Management (TOU) – Customer Satisfaction 15
ACEEE Ratings of States and Utilities • In a 2019 report of state policies the Commonwealth’s placed 29 th out of 50, but • In a 2020 report on utility programs Dominion placed 50 out 52 large investor owned utilities. • The VCEA will change both of those ratings significantly. 16
Hayes Framme Orsted 17
Ørsted overview and business units Ørsted develops energy systems that are green, independent and economically viable • Revenue (2019): DKK 67.8 bn (USD 10 bn) Major Shareholders (voting share %) • Danish State 50% • EBITDA (2019): DKK 17.5 bn (USD 2.6 bn) • Seas NVE 7.8% • Credit Rating: Moody’s Baa1 (stable), S&P BBB+ (stable) • Capital Group 5-10% • 6,526 employees • Active in Scandinavia, United Kingdom, Germany, The Netherlands, Poland, USA, Taiwan, Japan Offshore Onshore Markets & Bioenergy § Heat and power plants converted from coal and § Global market leader in offshore wind § Develops, constructs, owns and operate onshore gas to biomass and waste-to-energy wind, solar and energy storage projects § Develops, constructs, owns and operates offshore wind farms § #1 in Danish heat and power generation with § 1 GW onshore operational capacity 25% of market § Provides 100% wind backed Corporate PPA’s & § 1.1 GW under construction and pipeline to reach merchant products to large business customers § Energy supply solutions for B2B customers 5GW by 2025 § Renewable hydrogen projects in electrolysis and § Provides route-to-market for own and customers’ § Energy storage solutions with a first 20MW battery Power2X technologies generation portfolio storage project in operation § 6.8 GW operational capacity § Market trading operations to optimize hedging § Permian Energy Center which consists of 420MW § 3.1 GW build-out plan towards 2022 contracts Solar PV and 40MW storage facility § Ambition of 15 GW installed offshore wind capacity by 2025 18 Ørsted Offshore, March 2020
Offshore Wind in Virginia – Past, Present, and Future Landscape Industry Outlook 9 9 Policy: up to 16MW “in the public interest” - Virginia seen as low priority market Developer opportunity: minimal - Economic benefits likely not to PAST materialize given lack of policy Industry participation: minimal directive and small-scale of CVOW Economic benefits to Virginia: minimal Policy: up to 5,200MW by 2034 mandate – 2.6GW to 3GW by 2028 in VWEA - Virginia moving to market leadership Developer opportunity: Potentially significant – EPC or similar - Economic benefits potentially PRESENT significant with cluster opportunity -- Industry participation: Significant – Cluster potential supply chain opportunity to centralize Economic benefits to Virginia: Jobs, capital investment, cluster potential operations and combine project pipeline Policy: up to 5,200MW by 2034 mandate – 2.2GW – 2.6GW through 2034 - No near-term opportunity for multiple Developer opportunity: Potentially significant – EPC, Build/sell, other FUTURE projects to participate, but long-term Industry participation: Significant – Cluster potential potential for other lease areas to Economic benefits to Virginia: Jobs, capital investment, cluster potential (mandated) participate Ørsted activities: CVOW – Lynnhaven inlet construction base, PMT lease Long-term – Options to expand activities at PMT to serve multiple projects, potential involvement in Virginia Wind Energy Area, late 2020’s project potential COVID impacts in Virginia – minimal in getting to project completion; has limited personnel relocation 19
Devin Welch Sun Tribe 20
About Sun Tribe Charlottesville HQ Some of our Partners Founded in Virginia, work throughout the Mid-Atlantic 80% Virginia On-Site Public Sector Market Share 23GW+ Team Lifetime Experience; 70 Employees 21
Market Certainty = Private Sector Investment VA Solar and Onshore Wind Targets – Recent Historical Perspective 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2014 2015 2016 2017 2018 2019 Start 2020 VCEA (2035) 22
Keys To Virginia Solar Success Post-VCEA Commonwealth-wide goals require local… …innovation + engagement …national/local collaboration 23
Taking VCEA Success Forward • PRE-VCEA – Challenges included PPA cap, uncertain future for VA renewables • DUAL CRISIS – New Public Health W/ COVID & Economic Challenge • RECOVERY – Opportunity for advanced energy to be an economic engine Devin Welch – CEO devin.welch@suntribesolar.com 24
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