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Presentation Overview

Presentation Overview. Renewables Portfolio Standard (RPS) program overview Progress toward RPS targets Project development barriers Solutions for achieving RPS in a cost-effective and timely manner. Overview of 20% RPS Program.

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Presentation Overview

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  1. Presentation Overview • Renewables Portfolio Standard (RPS) program overview • Progress toward RPS targets • Project development barriers • Solutions for achieving RPS in a cost-effective and timely manner

  2. Overview of 20% RPS Program All California retail energy sellers must procure 20% renewable energy by 2010 • All RPS-obligated retail sellers* must have procured an incremental 1% of retail sales (from baseline year) in renewable energy per year until 2010 • 20% obligation starts in 2010 and continues indefinitely • California has a further goal of 33% by 2020 • RPS satisfied by MWhs generated on system-side of meter and delivered to CA, when applicable • Bundled contracts only now, but potentially tradable RECs soon *RPS-obligated entities include: Investor owned utilities, energy service providers, small and multi-jurisdictional utilities, and community choice aggregators. Municipal utilities (not regulated by the CPUC) have a voluntary RPS obligation.

  3. RPS Program Goals RPS policy reflects statutory goals • Statutory goals of the RPS include: • Diversifying California’s electricity supply for reliability, public health and environmental benefits • Promoting stable electricity prices by hedging against volatile natural gas prices • Stimulating sustainable economic development • Developing competitive procurement process to obtain least-cost, viable MWhs in a short time frame (“cost, risk, time”)

  4. Status of RPS Procurement Recent RPS solicitations have been robust • CPUC has approved ~166 contracts for over ~13,000 MW of new and existing eligible renewable energy capacity • ~5,000 MW of long and short term contracts currently under review • ~1080 MW of projects under long-term contracts have come online since 2003, 50% out-of-state • ~1000 MW of projects under short-term contracts have come online since 2003; 99% out-of-state • Participation in RPS solicitations is increasing: • Greater participation from larger and more experienced developers • Dramatic increase in number of solar PV bids • 2009 RPS solicitation resulted in 100,000 GWh of bids • Shortlisted 2009 bids would meet half of IOUs’ 33% target

  5. RPS Procurement Process CPUC approves RPS procurement plans IOUs hold annual solicitation IOU rank bids pursuant to “least-cost, best-fit” methodology IOUs negotiate bids, execute contracts • Independent evaluator oversees solicitation, bid evaluation, and • negotiations • Utilities can also sign bilateral contracts Once the IOU executes contract, must submit to the CPUC for approval

  6. Utilities on Track for RPS Targets Almost at 33% on a contract basis – but some face risk

  7. Project Development Barriers RPS solicitations attract larger projects, which face project development risk and take time to develop • Of 140 approved contracts, 23 have been terminated and 10 are delayed (have missed commercial online date) • CPUC identifies and tracks the development barriers for each approved RPS project • Significant project development barriers: • Technology maturity • Fuel supply • Equipment procurement • Military radar • Transmission • Permitting (CEC and County) • Site control (e.g., BLM application process) • Project financing • Developer experience

  8. CPUC Working on Solutions CPUC is working to create multi-agency solutions to known barriers • Tradable Renewable Energy Credits (TRECs) • Increases procurement options and increases competition • Renewable Energy Transmission Initiative (RETI) • Identifies most cost-effective renewable resource zones and transmission to access them • 33% Implementation Analysis • Analyses costs and tradeoffs between various 33% RPS scenarios • More robust long-term procurement planning methodology • Streamlining inputs and assumptions in utility procurement scenarios to understand their fossil needs in relation to all other demand and supply-side energy programs • Programs aimed at smaller system-side DG projects • To hedge against risk and timing of larger-scale RPS projects, programs for smaller RPS-eligible projects emerging

  9. System-Side DG Programs

  10. Renewable Auction Mechanism CPUC may offer new simple, streamlined opportunity for system-side DG consistent with RPS goals • Key program design elements of RAM include: • Standard Contract • Simple contract based on the IOUs’ existing feed-in tariff contract. • Terms and conditions are set before the auction and cannot be negotiated. • Market-Based Pricing • Sellers compete for a contract in a renewable auction mechanism. • Bids are selected by least-cost price first until the auction capacity cap is reached. • Price (and contract) is not negotiable and is paid as bid. • Project Viability • Minimum viability criteria to participate in the auction, e.g. 100% site control, developer experience constructing a project of similar technology and size. • Project development security, performance assurance (for >5 MW projects). • Project must be online within 18 months.

  11. Questions? Sara Kamins Senior Policy Analyst, RPS Team California Public Utilities Commission Phone: 415-703-1388 Email: smk@cpuc.ca.gov

  12. RPS Solicitation Bids by Fuel Type Solar participation has increasing most dramatically

  13. Breakdown of Solar Bids by Technology

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