300 likes | 532 Views
Feed-in Tariff Primer Feed-in tariffs are successful. They have created rapid growth in new renewable generation They have created the most kilowatt-hours of actual renewably-generated electricity of any policy They have proven successful in Germany, France, & Spain.
E N D
Feed-in Tariff Primer Feed-in tariffs are successful • They have created rapid growth in new renewable generation • They have created the most kilowatt-hours of actual renewably-generated electricity of any policy • They have proven successful in Germany, France, & Spain
Feed-in Tariff PrimerFeed-in tarifs are adaptable to North America • No intrinsic limitations to use in • Canada or the United States • No intrinsic limitations to use in • States, Provinces, or at the Federal level • Have been successfully used in both • Ontario, Canada and California (early 1980s) • Currently being considered in several • US States & Canadian Provinces
Feed-in Tariff PrimerFeed-in tariffs go by many names • Advanced Renewable Tariffs • A system of feed-in tariffs (prices or payments) for different technologies • Renewable Energy Payments • Because the “tariffs” are a payment per kilowatt-hour of electricity generated • Standard Offer Contracts (Incorrect!) • Feed-in tariffs use “standard contracts” but not “standard offers” as the “offers” differ by technology (one price for solar, another for wind)
Feed-in Tariff PrimerFeed-in taiffs are more equitable • Everyone can participate • Homeowners, farmers, Native Americans, small & large businesses • Payments not tax credits • Participants do not have to be rich or have tax liability to participate • Payments not subsidies for hardware • Payments for electricity generated • Payments are bankable
Feed-in Tariff PrimerFeed-in tariffs are bankable • Predictable revenues • Enable traditional financing • Tariffs are high enough to work • Prices based on the cost of generation plus a reasonable profit • Prices not based on “value” of electricity
Feed-in Tariff PrimerKey program elements • Priortity access to the grid for all • Long contracts (20-25 years typical) • Prices Differentiated • By technology, size, application, and resource intensity (wind and now solar) • Prices determined by cost plus profit • Fair but not excessive profit • Inflation protection • Periodic Review (every 2-4 years)
Feed-in Tariff PrimerAccess to the grid • Must be able to connect • Connection must be simple, timely, and at reasonable cost
Feed-in Tariff PrimerPriority purchase • Renewable energy must be first priority • Take or pay contracts • Producer must be assured that the electricity they produce is purchased • Only exception is “system emergencies”
Feed-in Tariff PrimerContract length • 20 years or more • Longer contracts = lower initial tariff • Shorter contracts = higher initial tariffs • Germany: 20 years • Spain: 25 years to life of plant
Feed-in Tariff PrimerDifferentiated prices • Differentiated by technlogy • wind, solar, biomass, geothermal, hydro, etc. • Differentiated by size • higher prices for small projects • lower prices for large projects • Differentiated by application • higher prices for rooftop solar • lower prices for ground-mounted solar
Feed-in Tariff PrimerDifferentiated prices for wind energy • Differentiated by resource intensity • Lower prices for windy sites • Higher prices for less windy sites • Ensures nearly all can participate • Landowners can’t move to windier sites • Limits excessive profits at windy sites • Distributes development geographically • Avoids concentrating wind development
Feed-in Tariff PrimerPrices determined by cost • Prices (tariffs) determined by cost • Of generating electricity by each different technology, and • Reasonable profit • Determined by existing regulatory practice • Fair but not excessive profit • Prices are not based • On the cost of conventional fuels, or • On the “avoided cost”, or • On the “value” of the electricity
Feed-in Tariff PrimerInflation Protection • Protects invested capital • Higher protection = lower initial tariffs • Prices adjusted periodically • For new projects • Inside existing contracts • Inflation indexing often less than 100% • France & Spain: 50% to 70% indexing
Feed-in Tariff PrimerPeriodic Review • Determines if program is robust • Determines if targets being met • Allows price adjustment • If profits are too high • If targets are not being met • Allows addition of new technologies • Every 2-4 years
Feed-in Tariff PrimerSolar Growing with Feed-in Tariffs • Major Solar PV Markets • Germany--1,500+ MW/year • Spain--500 MW/year • Italy--300-500 MW/yr • Japan--250 MW/year • California--200 MW/year • Markets with Feed-in Tariffs • Germany, Spain & Italy
World Solar PV Capacity 2008~13,000 MW Paul Gipe, wind-works.org
Renewable Tariffs & Solar Photovoltaics in Germany Paul Gipe, wind-works.org
Feed-in Tariff Primer Solar PV Success in Germany • 500 MW on Home Rooftops/year • 2,000 MW+ Total • 2 TWh/yr • ~ €1 Billion/yr Revenue • Anyone with a Roof Can Do Solar in Germany! • Because revenue stream is bankable 20007
150,000 New Systems €6 Billion Total of 600,000 Systems in Operation ~1,500 MW in 2008! ~2,000 MW in 2009 (Estimated) Total 5,000 MW, 2008; 7,000 MW, 2009 ~2%Supply in Conservative Bavaria ~1%Supply in Germany Feed-in Tariff Primer Solar PV for German Homeowners 2007
Feed-in Tariff PrimerSolar New Farm Crop in Germany • 700 MW on Barn Roofs in 2008 • Total of 1,500 MW in Operation • ~€9 Billion Invested by Farmers • 1.5 TWh/year • ~€700 million/year Farm Revenue
Feed-in Tariff PrimerEuropean Wind Market • Europe = 2/3 of World Wind Capacity • Gemany, France & Spain • = 2/3 of Europe’s Wind Capacity • Top European Markets • Germany, France & Spain • All Three Use Feed-in Tariffs
Feed-in Tariff PrimerWind Growing with Feed-in Tariffs • Germany 2004-2008: ~2,000 MW/year • 30,000 MW by 2012 • Spain 2004-2008:~2,000 MW/year • Germany • 50% Community Owned • ~€20 billion from Small Investors • Geographically Distributed • 7% of Supply
Feed-in Tariff PrimerResults of German Feed-in Tariffs • Renewables 15% of Supply • 12% of Supply from New Renewables • Renewables 9.6% of Primary Energy • 90,000 Employed in Wind Industry • 50,000 Employed in PV Industry • 8,000 Employed in Biogas Industry • 280,000 Employed in Renewables • €32 (~$50) Billion Turnover 2008
Cost of German EEG~$50/yr/household Paul Gipe, wind-works.org
North American Jurisdictionswith Modern Feed-in Tariffs • Ontario, Canada • First comprehensive system of feed-in tariffs in North America (2009) • Vermont (2009)
Ontario’sAdvanced Renewable Tariffs • Technology differentiation • Solar, Wind, Hydro, Biomass, Biogas • Size & application differentiation • Solar: 5 classes • Wind: On Land & Offshore • Biogas: 5 classes • Prices based on cost of generation • Community & aboriginal bonus • No program cap
Vermont’s Feed-in Tariffs • Technology differentiation • Solar, Wind, Hydro, Biogas, Biomass • Includes small wind tariff • Prices based on cost of generation • Modest program cap (50 MW) • Limited project size cap (2.2 MW)
Hawaii’s Proposed Feed-in Tariffs • PUC rules in favor of feed-in tariffs • Fall 2009 • Technology differentiation • Size differentiation • Prices based on cost of generation • Limited project size (5 MW) • Final rules end of 2009
Feed-in Tariff PrimerNorth American Experts • Toby Couture, E3 Analytics, toby@e3analytics.ca, 506-292-3585 • Karlynn Cory, NREL, Karlynn.Cory@nrel.gov, 303 384-7464 • John Farrell, Insitute for Local Self Reliance, jfarrell@ilsr.org, 612-379-3815 x210 • Wilson Rickerson, Rickerson Energy Strategies, wilson@rickersonenergy.com, 617 930 5502
Feed-in Tariff PrimerFor More Information • www.wind-works.org/articles/feed_laws.html • www.allianceforrenewableenergy.org • www.worldfuturecouncil.org/arguing_fits.html • International feed-in tariff news group • The Feed-in Tariff Channel