Rick Dunn, P.E. Benton PUD Senior Director Engineering & Power - PowerPoint PPT Presentation

Energy Northwest Member Forum Navigating Utility Impacts from Solar Resources Rick Dunn, P.E. Benton PUD Senior Director – Engineering & Power Management October 23, 2014 1

WHY NOW AT BENTON PUD?  Washington State  Lowest solar potential per square meter in the U.S. Source: NREL Resource Assessment Program Benton PUD   80% renewable hydro On On th the surface ce, , number bers are not ot 91% carbon free  compelli elling ng for our sta tate but t  Washington State busin iness ess and indus dustr try tr trend nds s  70% renewable hydro are telling ing a different erent story. 77% carbon free  Source: State of Washington Department of Commerce 2

LEGISLATORS – ACTING ON ENVIRONMENTAL BELIEFS 3

ORGANIZATIONS & BUSINESSES RESPOND 4

BUSINESS INFLUENCES “ GOOGLE FACTOR” 60 St Stores res  Arizona izona  Califor orni nia  Hawa waii  New York rk  Oregon on Google gle invest sted ed $280M in SolarCity City 5

SOLAR INSTALLATION COST CURVE ≈$5.50/Watt Source: Rocky Mountain Institute 6

LOCAL COMMUNITY INFLUENCES 7

NEW TECHNOLOGY RESEARCH & DEVELOPMENT UBIQUIT ITOUS OUS SOLAR R PANELS LS? Colorful, see-through solar cells invented at the University of Michigan could one day be used to make stained-glass windows, decorations and even shades that turn the sun's energy into electricity. ENERGY STORAGE ADVANCEMENT NTS Harvard University researchers say they’ve developed a new type of battery that could make it economical to store a couple of days of electricity from wind farms and other sources of power. Battery based on an organic molecule — called a quinone —that’s found in plants such as rhubarb and can be cheaply synthesized from crude oil. The molecules could reduce, by two-thirds, the cost of energy storage materials in a type of battery called a f flow battery, which is particularly well suited to storing large amounts of energy. 8 Source: MIT Technology Review

SOLAR + ENERGY STORAGE  Electri ctric c Vehicle e Market et • Lithium-Ion Technology • Tesla & Solar City  FERC C Orders 755 & 784 • Increased pay for “fast” grid frequency regulation (generation & load balance) • Requires tariffs to include accuracy in addition to capacity Source: Rocky Mountain Institute  Calif ifor orni nia AB 2514 • 1,325 MW energy storage by 2020 • First solicitation by December 1, 2014 • Absolute installation by 2024 9

WHY NOW AT BENTON PUD? Worldw dwide de and nation onal al trends s toward small-sc scal ale e more dispersed sed generat ation on  resour urces ces make it apparent we need to begin considering adjustments to our current practices and policies Susta taina nabilit ity and minimizing your carbon on footpri otprint nt  Common objectives for many individuals, particularly the next generati tion on of  energy consumers Solar energy emerging as the renewable resource with the stronges gest t  susta tain inability ability label Washi hingt ngton n state e renewable energy system cost-recovery incenti tive e payment nts s  are some of the highest in the nation Platform for customers to develop energy independen ndence ce and/or exercise  envir ironme nment ntal al beliefs efs Governor Inslee’s execut utiv ive e order 14-04 appears to support continued  incentives 10

WHY NOW AT BENTON PUD? Facts ts surrounding technologies and costs of "clean energy“ difficu icult t to comp mpil ile  and understa tand nd Benton PUD is well positioned to connect our customers with the technical  and financial resources they may need Benton PUD believes it is prudent to begin now to develop the relationshi onships, ps,  processes esses and capabi bilit ities es to efficiently and cost effectively integrate customer generation Need to increase se our credibility ility and influen ence ce in shaping state and national  energy policies Requires actions ons we can point to  Move from the “ no side ” of the renewable energy argument where possible  Maintain hallmarks of public utility business model; community munity ownershi ship p  and local control 11

COMMUNITY OWNERSHIP & LOCAL CONTROL Comm mmuni nity ty Solar Projec jects ts are gaining ng moment omentum m aroun und d the e coun untr try 79 kW Clean Energy y Collecti ctive 12

COMMU MMUNIT NITY Y SOLA LAR R - IN INCENTIVE ENTIVE PAYMEN ENTS 13

COMMUNITY SOLAR - WASHINGTON STATE Stan andar dard Utility ility Owned Compan pany Max Projec ject t Size e 75 kW 75 kW 75 kW • Local individuals • Voluntarily funded by • LLC • Households utility ratepayers • Cooperative Owner ersh ship ip • Nonprofit organization • Mutual Corp • Non-utility business • NOT a “utility” Local government entity not Own by Utility or lease Local government entity not Proper operty ty in the light & power business from LGE in the light & power business Incen entiv tive Limits $5,000 individuals $5,000 individuals $5,000 individuals Tax Incen entiv tive Limits s Balance of Funds up to 25% of $575k 5% of $575k 0.5% % Taxab able le $575k $143,750 $28,750 Power er Sales es Prac actic tical al Limit up 94 kW to 341 kW to Max Incen entiv tive 19 kW to 68 kW CapX: $470k to $1.7M Allowed d by Law Envir ironme mental tal Belong to participants Belong to Utility Belong to participants Attrib ibutes es 14

COMMUNITY SOLAR - BALANCED INTERESTS Bet etter econom nomics cs  Economies of scale vs. rooftop systems  Improved performance vs. rooftop systems  Warranties and performance guarantees  Improved financing options and opportunity to balance interests of developers, customers  and utility Reduced barriers to entry for lower income customers  Custome omer role & benefits  Only 27% of residential rooftop area suitable for solar (NREL)  Customers provide investment dollars on a voluntary basis  Scalable investment customized to customer wants and needs  Maintenance & operation not homeowners responsibility  Investment not tied to current residence; reduced risk and complexity  Reduced barriers to entry for non-technical customers; minimizes possible surprises  Utility y role and benefits  Simplified platform for customers who want to exercise their environmental beliefs  Responsive to renewable energy & DG trends while minimizing impacts on non-participants  Increases utility credibility and experience in developing long term power supply solutions  Utility buys the power and may be able to own the RECs  Strategic siting; possibly to the benefit of T&D system operations  15

INDIVIDU VIDUAL AL CUSTOMER OMER SOLAR AR - INCENTIVE TIVE PAYMENT ENTS 16

INDIVIDUAL CUSTOMER SOLAR - ECONOMICS 5 kilowatt att System Pa Payback ck Comp mparison arison Assumes es $5.5 per Watt Installed ed Cost 60.0 57.4 50.0 40.2 40.0 Years 30.0 20.0 18 18.0 12.6 10.0 4.5 6.4 - w/ 30% FTC w/ 0% FTC $0.54/ 4/kW kWh h WA $0.15/ 5/kW kWh h WA no WA incenti tive 17

NEXT STEPS – SOLAR PROGRAM DEVELOPMENT Get people and organizat zationa nal structure ucture in place; who will do what?  Review how other utilities have done it; better understanding of best practi tices es  Benton PUD is a Solar Electric Power Association (SEPA) member  SEPA's mission is to support utility integration of solar to the benefit of the utility, its  customers and the public good Develop written business ness plan for the program  Staff f developme ment nt and training requirements  Outreach to solar insta staller ers and other pot otenti ntial partner ners  Cust stome mer r outreach ch; near term and long term  Improve existing net et met eteri ring ng application and contracting process ess  Strong focus on communi nity ty solar  Stay engaged in legislativ lative process ss  18