Renewable Portfolio Standard Analysis for the State of North - - PowerPoint PPT Presentation

Renewable Portfolio Standard

Analysis for the State of North Carolina

Prepared by: Jonathan Winer Mon-Fen Hong La Capra Associates, Inc. Dick Spellman GDS Associates, Inc.

January 12, 2007

Presented by: Commissioner James Y. Kerr, II Sam Watson, Staff Attorney North Carolina Utilities Commission

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Outline of Discussion Our Goal Key Findings Renewable and Energy Efficiency Potential Electric Rate Impact Other Potential Costs and Benefits

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Our Goal Provide an objective view of the issues related to a possible Renewable Portfolio Standard for North Carolina.

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Three Key Findings North Carolina has sufficient renewable resources to meet a 5% RPS requirement for new renewable generation. It would be difficult to meet a 10% RPS with

• nly new North Carolina renewable supply

resources. Inclusion of energy efficiency would enable the State to achieve a 10% RPS and would reduce consumers’ overall electricity bill.

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Three Key Findings North Carolina has sufficient renewable resources to meet a 5% RPS requirement for new renewable generation.

• Less than 1% increase in retail electricity rates
• Doubles current level of renewables
• Potential job creation and property tax benefits

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Three Key Findings It would be difficult to meet a 10% RPS with only new North Carolina renewable supply resources.

• Must include wind in both the west and off-shore locations

and larger hydroelectric generation

• If these additional resources can be developed, a 3.6%

estimated rate increase, at most, by the 10th year

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Three Key Findings Inclusion of energy efficiency would enable the State to achieve a 10% RPS and would reduce consumers’ overall electricity bill.

• Energy efficiency could easily meet one-quarter of RPS
• Both a 5% RPS and a 10% RPS with energy efficiency

could produce net savings of about half a billion dollars over 20 years

• Less than 1% increase in rates, but average bill decreases

due to less usage overall

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Renewable Resource Overview North Carolina has over 2,000 MW of renewable generation already.

Equal to 4% to 5% of the State’s current energy needs

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New Renewable Resource Potential in North Carolina Technical potential for over 12,000 MW of new in-state renewable supply resources

Strong logging and farming sectors – fuel for additional

renewable generation

Good wind resources, but development may be more

challenging

Practical potential is as much as 3,400 MW

Maximum amount that could reasonably be expected to

be implemented

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New Renewable Resource Potential in North Carolina

N/A N/A N/A Wind (off-shore) 3,900 1,500 9,600 Wind (on-shore)*** 16,700 3,373 12,909 Total In-State Potential N/A N/A N/A Solar PV 1,700 425 508 Hydro**** 600 93 116 Hog Waste 800 105 175 Poultry Litter

2,500 384 1,875 Co-Firing**

8,700 1,100 2,270 Biomass (Wood and Ag. Crops Waste) 1,000 150 240 Landfill Gas Practical Energy Potential ( GW h) * Practical Potential ( MW ) Technical Potential ( MW ) Resources

*Energy estimate rounded to nearest hundred GWh. **Co-firing is a subset of the Biomass assessment. ***Includes wind development in the western mountains. **** Includes hydroelectric generation larger than 10 MW.

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Biomass (Wood) Across the State

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Poultry Litter and Hog Waste More Concentrated

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Wind in the West and Eastern Coastline

Source: TrueWind Solutions

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Hydroelectric Potential by River Basins

50 100 150 200 250 Cape Fear Kanawha Pamlico-Neuse Roanoke Santee Savannah Tennessee Yadkin-Pee Dee River Basins Hydroelectric Potential (MW)

Impoundments With Power Impoundments Without Power Undeveloped

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Range of Rate Impacts for 5% RPS is -0.3% to 0.9% by 2017*

*Assumes average electricity rates of 8.5 cents per kWh by 2017

(0.05) 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Rate Impact (cents per kWh)

• I. NCGP Criteria (5%)
• II. Expanded Resources (5%)
• III. Expanded Plus EE (5%)

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Range of Rate Impacts for 10% RPS is 0.4% to 3.6% by 2017*

*Assumes average electricity rates of 8.5 cents per kWh by 2017

(0.05) 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Rate Impact (cents per kWh)

• I. NCGP Criteria (10%)
• II. Expanded Resources (10%)
• III. Expanded Plus EE (10%)

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Total Cost for RPS Scenarios ($1,000) ($500) $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

• I. NCGP (5%)
• II. Expanded

(5%)

• III. Plus EE

(5%)

• I. NCGP (10%)
• II. Expanded

(10%)

• III. Plus EE

(10%) Scenarios 20-year NPV ($million)

Total Incremental Cost/Savings (NPV) Over 20 Years

The Utilities’ Portfolio, comprised of new proposed generation (9,000 MW) for the period of 2008-2017 by NC utilities, has a 20-year NPV of about $15 billion.

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Jobs: 5% RPS Without Energy Efficiency*

10,000 20,000 30,000 40,000 50,000 60,000 70,000 Increase in Renewable Job- Years Decrease In Conventional Job- Years Job Loss Due to Rate Increase Net Change in Jobs For RPS Portfolio Job-Years

Net Change Job Loss Construction O&M Fuel

• *Job-years for O&M and Fuel assume 20 years of operation. Electricity rate impact assumed over 20 years.

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Jobs: 10% RPS With Energy Efficiency*

20,000 40,000 60,000 80,000 100,000 120,000 Increase in Renewable Job-Years Decrease In Conventional Job-Years Net Change in Jobs For RPS Portfolio Job-Years

Net Change Energy Efficiency Construction O&M Fuel

• *Job-years for O&M and Fuel assume 20 years of operation. No electricity rate impact or job

losses because overall electricity bill decreases.

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Key Environmental Benefits

Energy efficiency would have the greatest positive impact. The annual displacement of Carbon Dioxide, once a 5% or 10% RPS is achieved, could total at least 7.3 to 13.6 million tons per year, respectively. Potential displacement of emissions related to air quality and health, such as Nitrogen Oxides, Sulfur Dioxide, particulate matter, and mercury. Renewable generation facilities either do not produce waste or the waste products are more benign than from coal and nuclear fuels. Renewable energy resources do not have significant environmental impact from fuel extraction in contrast to the extraction impacts of coal, oil, natural gas, and nuclear fuel.

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Conclusions

There should be sufficient renewable resources within the State to meet a 5% RPS requirement for new renewable generation. The State would have difficulty meeting a more aggressive 10% RPS with only new renewable resources located within North Carolina. Inclusion of energy efficiency would enable the State to achieve a 10% RPS and reduce average electricity bill. An RPS would produce direct economic and environmental benefits to the State. An RPS may enable the State to avoid the development of 1,000 MW or more of baseload conventional generation.

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The full RPS Report is available on the North Carolina Utilities Commission website: www.ncuc.net