Kansas' Future in Renewable Energy

Kansas' Future in Renewable Energy Presentation to the Kansas Wind & Renewable Energy Conference September 24, 2008 Mike Eckhart American Council On Renewable Energy (ACORE) www.acore.org

Topics • ACORE • Renewable Energy in America • Kansas Renewable Energy • Current status and potential • Wind • Solar • Biomass / biofuels • Jobs in Kansas • Case Examples: • Colorado energy plan • Nolan County, Texas: Economic impact • Policy Perspective

ACORE’s Membership Scope

8,600 people from around the world Ministerial + Global Business Conference Nest global meeting in India in 2010 Trade Show to RETECH 2009 Las Vegas Washington International Renewable Energy Conference (WIREC 2008)

Finance ConferenceRenewable Energy Finance Forum–Wall StreetProduced with Euromoney at Waldorf-Astoria Hotel in New York City Next: June 2009

Policy Conference“Phase II of Renewable Energy in America”Cannon Caucus Room, Washington, DCNext: December 3-4, 2008

RETECHACORE’s All–Renewables Trade Show in Las VegasFebruary 25-27, 2009

Senate PassedBaucus/Grassley Amendment to HR 6049 • Production Tax Credit (PTC) • One-year extension wind PTC • Three-years for biomass, geothermal, hydro, LFG, waste-energy + marine energy • Investment Tax Credit (ITC) • Solar: 6-year extension of 30% ITC • Fuel cells: 6-year extension and increase cap to $1,500/kw • New 10% ITC on CHP • Removes limitation on use of ITC by electric utilities • Personal / Residential • Efficiency / solar 30% ITC extended 6 years • Increase cap from $2,000 to $4,000 • Offset AMT • Clean RE Bonds: $2 billion authorization

Resource Potential The Challenge of Putting RE into Use- Regional Resources, Economics, and Politics - SOLAR ENERGY WIND POWER GEOTHERMAL BIOMASS

Wind Power US Wind Power Installations (MW/Year) Key Issues: Production Tax Credit Manufacturing in U.S. Transmission capacity Sources: AWEA (actual) and ACORE (forecast)

Solar PV U.S. Solar PV Production (MW/Year) Key Issues: Investment Tax Credit Manufacturing in U.S.

Concentrating Solar Power 354 MW SEGS 64 MW Solar One 4,000 MW under contract + 40,000 MW Proposed: • Key Issues: • Cost and Economics • Investment Tax Credit • Financing

Geothermal Energy Geothermal Power: 3,600 MW in operation 3,000 MW coming online 100,000 MW mid-term future Vision: 500,000 MW potential, displacing coal’s baseload role • Key Issues: • Production Tax Credit • R&D and Tech Transfer

Hydropower • 72,000 MW in place • + 3,000 MW • incremental hydro • + 20,000 MW Small Hydro • + 90,000 MW New: • Ocean power • Kinetic power

Biomass Energy Outlook to 2025: Over 100,000 MW of additional potential: Industrial CHP: 57,000 MW Wholesale power: 37,000 MW Solid Waste: 10,000 MW • Key Issues: • Economics • Fuel supply risks

Renewable PortfolioStandards DSIRE Database – September 2008 ME: 30% by 2000 10% by 2017 - new RE MN: 25% by 2025 (Xcel: 30% by 2020) VT: (1) RE meets any increase in retail sales by 2012; (2) 20% by 2017 *WA: 15% by 2020 • NH: 23.8% in 2025 ND: 10% by 2015 WI: requirement varies by utility; 10% by 2015 goal MA: 15% by 2020 + 1% annual increase(Class I Renewables) MT: 15% by 2015 OR: 25% by 2025(large utilities) 5% - 10% by 2025 (smaller utilities) RI: 16% by 2020 SD: 10% by 2015 • OH: 25%** by 2025 CT: 23% by 2020 • *NV: 20% by 2015 *UT: 20% by 2025 IA: 105 MW • NY: 24% by 2013 CA: 20% by 2010 IL: 25% by 2025 • NJ: 22.5% by 2021 • CO: 20% by 2020(IOUs) *10% by 2020 (co-ops & large munis) • PA: 18%** by 2020 MO: 11% by 2020 • MD: 20% by 2022 • NC: 12.5% by 2021(IOUs) 10% by 2018 (co-ops & munis) • AZ: 15% by 2025 • *DE: 20% by 2019 • DC: 11% by 2022 • NM: 20% by 2020(IOUs) • 10% by 2020 (co-ops) *VA: 12% by 2022 TX: 5,880 MW by 2015 HI: 20% by 2020 State RPS State Goal • Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE • **Includes separate tier of non-renewable “alternative” energy resources Solar water heating eligible

Kansas Energy Mix and Fuel Prices Renewables 2.2% Nuclear 20.5% Kansas relies heavily on coal imported from Wyoming Prices of all types of fuel have increased since 2001 Payments for coal go out of state, even out of country Natural Gas 4% Coal 73.1%

Wind Potential: 3rd in the US 120,000 MW 12x Total State Peak Load: 10,000 MW

New Wind Capacity Per Year 5 projects 549 MW 2 projects 250 MW 1 project 112.5 MW 1 project 101 MW

Wind DevelopmentKansas Ranked 12th in the U.S. • Installed Capacity • 465 MW • 4 projects • Under Construction: • 548.5 MW • 5 projects • 1,013 MW end of 2008 • Constraints: • Transmission line availability • Uncertain policy Source: AWEA

State Wind Development vs. Potential *States in green have RPS

Kansas Wind Position *States in green have RPS *TX and CA excluded

Kansas Solar Energy • Western Kansas: • “Excellent” potential for photovoltaic power • “Particularly good” potential for solar thermal-electric • No major projects underway yet Source: DOE

Kansas Biofuels and Biomass Biofuels 11 existing ethanol plants Total capacity: 527 mgpy 9 ethanol plants in development Additional capacity: 628.3 mgpy Abengoa Bioenergy constructing $400 million cellulosic ethanol plant in Hugoton—will produce 30 mgpy of second generation ethanol. Biomass Crop and crop residue biomass: 13.9 million dry tons Cellulosic biomass: 8.1 million dry tons Upcoming projects: Biomass cofiring plant under construction in Goodland—owned by Energy Holdings.

Manufacturing Job Loss • In oast 6 years, Kansas has lost 10,944 manufacturing jobs • 6% of total manufacturing workforce • Manufacturing fell from 18% of the total non-farm workforce to 16.6% over that time. • Manufacturing is important to Kansas Source: US Department of Labor

Renewable Energy is a Growth Industry • For every 1000 MW of wind/year, about 3000 manufacturing jobs are created (ref: NREL). • Attracting renewable energy companies to Kansas will increase the economic base: • Component manufacturers • Systems engineers and installers • RE equipment manufacturers • Support professionals

Wind Component Manufacturing Locations

Topics • About ACORE • Renewable Energy in America • Kansas Renewable Energy • Current Status • Potential • Wind • Solar • Biomass / biofuels • Jobs in Kansas • Case Examples • Colorado energy plan • Nolan County, Texas: Economic impact • Policy Perspective

2007 2015 1,884 MW 271 MW 1,618 GWh 1,084 MW 147 GWh 17 MW Wind Solar DSM Energy Sources Colorado Resource PlanGeneration Additions and Retirements 2007-2015 MW Wind 800 Central Solar 225 Customer Solar 29 Biomass 4 DSM 360 Gas Generation 980 Additions 2,398 Retirements -340 Net Additions 2,054 Source: Colorado Public Service Co.

Economic Case Study: Nolan County, Texas • Current Wind Capacity: 2,500MW • Future: add 3,000 MW by 2009 • More wind capacity than California • 1,124 direct jobs in Nolan County • 20% of the county’s workforce. • Permanent O&M jobs make up 29% of direct jobs • 2008 economic impact in Nolan County: $315 million/year Source: “Nolan County: Case Study of Wind Energy Economic Impacts in Texas.” Prepared by New Amsterdam Wind Source LLC.

Nolan County, TexasSince the Wind Boom Began: Unemployment is DOWN 6.1% - 4.8% since 2003 Real Wages are UP by 9%

Property Taxes Tax base has increased 5x since 1999 Projected to continue growing to 7x. Nolan County has expanded services, while loweringresidential tax rates. Lower tax rates mean more disposable income for residents.

Land-Lease Payments to Nolan County Farmers T. Boone Pickens

Topics • About ACORE • Renewable Energy in America • Kansas Renewable Energy • Current Status • Potential • Wind • Solar • Biomass / biofuels • Jobs in Kansas • Case Examples • Colorado energy plan • Nolan County, Texas: Economic impact • State Policy Perspective

Additional Policy Benefits of Renewable Energy • Energy Supply • Coal Money goes out of Kansas to Omaha and London • Wind, Solar and Biomass can be Kansas-growth energy sources • State response to Climate Change • Regional and state-level innovation today • Preparing for longer-term reduction of GHG emissions • Environment: • Reduced emissions of all pollutants associated with power generation • Reduced water consumption • Health Benefits • Lower smog, soot, acid rain, and toxic air emissions. • Lower rates of asthma, respiratory illness in children, cardiovascular failure, and chronic bronchitis (ref: EPA)

Policies to Promote Renewables • Current Kansas renewable energy policies: • Property Tax Exemption • Solar Easements • Interest-free loans and utility rebates • Future legislation under consideration: • Renewable Portfolio Standard • Financial incentives • Transmission line development • ACORE recommends: • Economic development incentives • Continuing to protect the environment and important view shed

Closing Thoughts • Kansas has excellent renewable energy resources: • #3 state in wind potential: 12x state peak load • Very good opportunities on solar energy • Substantial opportunities in biomass power • Kansas can begin to receive economic benefits: • Investment in new manufacturing facilities • Construction, operations and maintenance jobs • Increased land lease payments to Kansas farmers • Increased property taxes to local governments • Higher average wages and disposable income • Lower unemployment. • ACORE urges Kansas to continue its commitment to renewable energy, and we stand ready to help.

Kansas' Future in Renewable Energy Thank You Mike Eckhart ACORE meckhart@acore.org

Reference Slides

Technology Comparison Total State Load: 10,000 MW Demand growing at 1.5% per year

Existing Wind Projects

Price of Wind Wind and Wholesale Power Prices by Region: 1998-2007 Projects

Price of Wind Power Competitive at a National Scale 2003 to 2007 Average Cumulative Price of Wind and Wholesale Power Prices over Time This is Illustrative Must model this on a Portfolio-specific basis

Kansas Renewable Resources:Biomass

Kansas' Future in Renewable Energy