Alternative Energy Status: Western US

Alternative Energy Status: Western US

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Alternative vs. Renewable energy

• Alternative Energy: energy derived from sources that do not use up natural resources or harm the environment, can include nuclear (Dictionary.com)

• Renewable Energy: any naturally occurring, theoretically inexhaustible source of energy, that is not derived from fossil or nuclear (Dictionary.com, IPCC Intergovernmental Panel on Climate Change)

• States have their own definitions: – WV count waste coal and tire derived fuel

– NC counts municipal solid waste

– OH counts advanced coal technology

– ND counts all hydro, MN counts any <100mw

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Alternative Energy Drivers

• State

– RPS (Renewable Portfolio Standards)

– Tax credits

– Grants, loans, rebates

• Federal

– Production tax credits

– Corporate depreciation

– Grants, loans

• Carbon Policy – REGGI (Regional Greenhouse Gas initiative)

– AB32 (CA carbon cap and trade program) • First auction is November 2012

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States with the most wind

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CA leads in Solar Market Share

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Wind Challenges PNW

• Over generation

• Wind Forecast Error

• Block Scheduling

Price Volatility

Over Generation in the PNW

• During the spring when demand is low and hydro and wind are strong BPA forces wind units off the grid

• Wind generators lost over 2.1 MM in tax and energy credits in 2011

• June 2011 Iberdrola, NextEra, Invenergy and Horizon wind file petition against BPA with FERC and suit in the Ninth Circuit Court for BPA to pay damages

• Dec 2012 FERC rules BPA curtailment of wind “Discriminatory”

• BPA now revising policy structure

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Forecast Error

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Forecast Error

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Block Scheduling

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Price volatility

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Wind Challenges CA

• Lack of peaking capacity

• Negative Pricing

• Volatility

• Escalation of retail rates?

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Lack of Peaking Capacity

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Increasing Negative Pricing

Increasing Volatility

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Summation/ Thoughts

• Watch CA as the Guinea Pig for alternative energy integration

• Aggressive development of wind has consequences – Market Regulators work slow

• The queue of wind development is massive

• Federal Production Tax Credit continuation

• Solar a better fit?

• Renewables marketed cheap/ What effect on retail rates?

• Power is Politics/ In the end the people will decide

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