Renewable Energy Markets: Investment & Policy Trends

Renewable Energy Markets: Investment & Policy Trends Sponsored by the: U.S. House Renewable Energy & Energy Efficiency Caucus October 9, 2012

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Trends and Barriers to Increased Deployment and Investment: Wind Jack Thirolf, Regulatory Affairs Enel Green Power North America, Inc. October 9, 2012, Washington, DC

EGP North America

Diversified portfolio across the US and Canada •

Presence in 21 U.S. States and 3 Canadian Provinces

•

More than 90 plants in operation with a total installed capacity exceeding 1.2 GW

•

Offices in Andover, Massachusetts (Headquarters), Washington, D.C., San Diego, California, Reno, Nevada, and Montreal, Canada.

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More than 320 people employed in North America Technology

Capacity

Hydro

313 MW

Wind

830 MW

Geothermal

47 MW

Biomass

21 MW

Solar

26 MW

Tot

1,237 MW

Balanced long-term presence across all main renewable technologies in the United States and Canada 2

North American Presence

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Key Wind Projects: North America Name: Name: Rocky Rocky Ridge Ridge Location: Kiowa Location: Kiowa and and Washita Washita Counties, Counties, Oklahoma Oklahoma Size: Size: 148.80 148.80 MW MW Machine: Machine: 93 93 turbines turbines of of 1.6 1.6 MW MW each each COD: COD: July July 2012 2012

Name: Name: Smoky Smoky Hills Hills Location: Ellsworth Location: Ellsworth & & Lincoln Lincoln counties, Kansas counties, Kansas COD: COD: 2008 2008 Size: Size: 250 250 MW MW (largest (largest wind wind project project in in Kansas) Kansas) Machine: Machine: 56 56 Vestas Vestas V80, V80, 1.8 1.8 MW MW (Smoky (Smoky I), I), 99 99 GE GE 1.5 1.5 MW MW (Smoky (Smoky II) II) Name: Name: Snyder Snyder Location: Location: Hermleigh, Hermleigh, TX TX COD: COD: 2007 2007 Size: 63 Size: 63 MW MW Machine: Machine: 21 21 Vestas Vestas V90, V90, 3MW turbines 3MW turbines (345 (345 ft) ft) Households: Households: 17,000 17,000

Wind Wind Projects Projects under under construction construction in in 2012 2012

Name: Name: Caney Caney River River Location: Location: Elk Elk County, County, Kansas Kansas Size: 200 MW Size: 200 MW Machine: Machine: 111 111 turbines turbines (V-90 (V-90 Vestas; Vestas; 1.8MW) 1.8MW) COD: COD: December December 2011 2011 Off-taker: Off-taker: Tennessee Tennessee Valley Valley Authority Authority (TVA) (TVA) Customers: 60,000 households Customers: 60,000 households

Name: Name: Chisholm Chisholm View View Size: Size: 235 235 MW MW Location: Location: Garfield Garfield and and Grant Grant counties, counties, Oklahoma Oklahoma COD: COD: Q4 Q4 2012 2012 Name: Name: Prairie Prairie Rose Rose Size: Size: 200 200 MW MW Location: Rock Location: Rock county, county, Minnesota Minnesota COD: COD: Q4 Q4 2012 2012 4

10 Years of Growth

1. Source: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, 2011 Wind Technologies Market Report, August 2012.

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Short-Term: Uncertainty Hurts

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1. Source: AWEA, EIA.

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Long Term: Growth and Policy

1. Source: U.S. Energy Information Administration, Annual Energy Outlook 2012, June 2012.

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State RPS projected to create 4 to 5 GW/year of demand for all renewables for 10 years

•

Future tax policy: how are renewables treated in comprehensive tax reform—open question

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LCOE: what happens to natural gas prices, further innovation in wind turbine design (lower costs, increased performance)

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Electricity demand: how do efficiency gains, economic growth rate effect demand for power

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Transmission and VER integration: will renewables have an easier or tougher time coming onto the grid

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Contact

Jack Thirolf Associate for Regulatory Affairs Enel Green Power North America, Inc. Email: [email protected] Phone: 202-609-7799

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BCSE Congressional Briefing Kathy Weiss, VP‐Government Affairs, First Solar First Solar Confidential & Proprietary | © Copyright 2012

© Copyright 2012, First Solar, Inc.

Global PV Demand Drivers

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Power Plant Overview PV Module Arrays

Inverters Transformers Photovoltaic Combining Switchgear

Substation

Gen Tie‐line

First Solar Confidential & Proprietary | © Copyright 2012

Combiner Boxes

Power Grid

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PV Module • Converts sunlight into electricity (DC power) • Manufactured by First Solar • Installed on string in series


PV Module Arrays

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Combiner Box • Aggregates DC wiring from multiple strings • Provides single output to inverter


Combiner Boxes

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Inverter Inverters • Converts DC power to AC (low voltage)

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Transformer • Increases low AC voltage to medium

AC voltage


Transformers

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Photovoltaic Combining Switchgear (PVCS)

• Aggregates AC power from multiple

transformers First Solar Confidential & Proprietary | © Copyright 2012

Photovoltaic Combining Switchgear

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Substation and Generator Tie‐line • Provides plant controls, disconnects, and

step up transformer • Delivers electricity to the grid

Gen Tie‐line


Substation

Power Grid

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Sempra – El Dorado 13MW (DC) | 2008

NRG – Blythe 26MW (DC) | 2009

Sempra – Copper Mnt. 58MW (DC) | 2010

Enbridge – Sarnia 97MW (DC) | 2010

Southern / Turner – Cimarron 37MW (DC) | 2010

Enbridge – Tilbury 6MW (DC) | 2010

NRG – Santa Teresa 23MW (DC) | 2011

PNM – 5 Projects 27MW (DC) | 2011

APS – Paloma 23MW (DC) | 2011

Enbridge – Amherstburg II 19MW (DC) | 2011

NextEra – Moore 26MW (DC) | 2011

NextEra – Sombra 26MW (DC) | 2011

Enbridge – Silver State N. 63MW (DC) | 2012

Constellation – St. Mary’s 17MW (DC) | 2012

Verve/GE – Greenough River 13MW (DC) | 2012

Completed Projects 474MW (DC) | September 2012

NRG/MidAmerican – Agua Caliente 410MW (DC)

NRG – Alpine 85MW (DC)

MidAmerican – Topaz 749MW (DC)

NRG – Avra Valley 35MW (DC)

NextEra/GE–Desert Sunlight 725MW (DC)

Exelon – AVSR 304MW (DC)

Tenaska – ISECS 172MW (DC)

Sempra – Copper Mnt. II 118MW (DC)

GE – Walpole 27MW (DC)

GE – Amherstburg I 13MW (DC)

GE – Belmont 27MW (DC)

Pending bids…

In Construction 2,665 MW (DC) | September 2012

Awards and Recognition First Solar Honor

PV Plant

Project Finance

Project Finance Deal of the Year

Desert Sunlight

2012

Power Intelligence

Best Renewables Deal

Desert Sunlight

2012

CLP Resources Renewable Energy World.com Solar Power Generation USA

Year

2012

2011 National Safety Winner Solar Project of the Year

Agua Caliente

2012

PV Project of the Year

Agua Caliente

2012

Power Magazine

Renewable Top Plant

Copper Mountain

2012

Power Magazine

Renewable Top Plant

Sarnia

2011

Solar Project of the Year

Copper Mountain

2010

Solar PV Project of the Year

Sarnia

2010

Excellence in Energy Awards— Best Utility Scale Project

Sarnia

2010

Renewable Energy World.com CanSIA Renewable Energy World.com


Awarded By

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13 First Solar Confidential & Proprietary | © Copyright 2012

Solar Industry Growth and Policy Drivers First Solar Confidential & Proprietary | © Copyright 2012

Stable Tax Policy Has Resulted in Strong Growth • PV Installations Grew by 116% in Q2 2012 over Q2 2011


30% ITC Enacted

ITC Years: CAGR = 77%

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Job Creation and Increased Value • The value of solar installations grew to $8.4 billion in 2011, up from $6 billion in 2010


• Solar employment more than doubled from 2009 to 2011, topping 100,000 American workers

SEIA/GTM Research U.S. Solar Market Insight: Year In Review

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U.S. Market To Continue Strong Growth


• U.S. PV Market Forecast to Install Over 3.2 GW in 2012

Source: SEIA/GTM Research “U.S. Solar Market Insight: Q2 2012”

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PV System Prices Falling Dramatically

Source: SEIA/GTM Research “U.S. Solar Market Insight: Q2 2012”

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Conclusions Diverse set of global PV demand drivers. Technology advancement and adaptation continue to drive down the cost of solar electricity. All energy is subsidized – government has been providing policy support for traditional fuels for decades.


In a relatively short period of time, solar support policies, including the solar investment tax credit and the loan guarantee program, are yielding the desired results. Tax and regulatory policy that promotes access to a diverse and abundant supply of clean energy is in the national interest.

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SOLAR POWER: MAINSTREAM ENERGY SOLUTION

Stationary Fuel Cell Power Renewable Energy Markets Investment & Policy Trends Washington, DC October 9, 2012

Integrated Fuel Cell Company Manufacture

Sell (direct & via partners)

Install

Services

Growing Market Presence ~180 MW installed and in backlog plus 120 MW MOA

Over 80 Direct FuelCell® plants generating power at more than 50 sites globally

• •

Providing: On-site power Utility grid support

Delivering Ultra-clean Baseload Distributed Generation Globally

600 kW plant at a food processor

1.4 MW plant at a municipal building

2.4 MW plant owned by an independent power producer

11.2 MW plant – largest fuel cell park in the world

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Application Examples

Natural Gas

1.4 MW at a municipal building, CA

2.4 MW plant owned by an Independent power producer in S Korea

600 kW plant Gills Onion Food Processor

900kW Tulare Wastewater Treatment Plant

11.2 MW plant in S. Korea- largest fuel cell power plant in the world

Renewable Biogas

1.2 MW DFC1500 Turlock Irrigation District Wastewater Treatment

DFC Powerplants have been supplied commercially since 2003 for clean natural gas and biogas applications 3

Stationary Fuel Cell Technology Commercial – Poised to be part of Mainstream Resources to serve the US Electricity Grid Part of a Family of Technologies– Transportation ,Stationary and Backup Power, Electronics US Technology ‐ Developed with investment from US DOE, DOD and NASA and Private Capital Hundreds of systems in operation worldwide US Manufacturing Base and Supply chain in place Designed to standards for Commercial, Industrial and Utility duty

Key Messages • Fuel Cells for Electric Power generation are cost Competitive with Renewables • The Value is increasingly being recognized outside the US • Fuel cells offer Best and Highest use of Domestic Natural Gas and Renewable Fuels for power generation

Summary

For Congress and National Policymakers 1. Recognize Economic Development Value – American Technology = American Jobs – manufacturing plus installation offers 3.5x Job growth of just installation 2. Reward the combination of efficiency and cleanliness and US Technology with incentives that motivate adoption 3. Reward the ability to combine high efficiency and domestic fuels (renewable and natural gas)

Renewable Energy Markets HYDRO

Don Webb Voith Hydro

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Voith Hydro Headquarters for U.S. is in York, PA with 540 employees

Last month we celebrated 135 years in the hydro business

Design, test, manufacture and install hydro electric generating equipment

Product provides: • Highly efficient & environmentally friendly • •

power production Fast response time to electric grid demands Quick recovery from blackouts 2

Trends in the hydro industry Hydropower accounts for 2/3 of United State’s renewable energy portfolio

Growing interest in low head hydro at existing dams • Only 3% of the over 80,000 dams in the

United States currently produce power Continued modernization of existing plants Renewed interest in pumped storage • Only large scale energy storage • Connection to wind & solar power Environmental friendliness • Fish passage • Aeration Development of ocean energy • Tidal • Wave

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Barriers to deployment, federal policy issues Regulatory/Licensing Reform •

Hydropower is subject to a long and complicated regulatory approval process involving numerous federal and state resource agencies, local governments, tribes, NGOs, and the public

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A 2009 study said that with the right policies in place, the hydropower industry can create 1.4 million cumulative jobs by 2025

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Congress needs to reform and improve the licensing process to create more clean, renewable power and more American jobs

Federal Use of Hydropower •

Hydropower is underutilized in the federal government’s efforts to expand renewable energy

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Disappointing considering the vast untapped hydropower potential across the United States

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Moreover, the federal government is already highly involved in the production of hydropower (Army Corps, TVA, USBR, etc.); placing a priority on expanding production would ensure additional hydro resources come online

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Barriers to deployment, federal policy issues Certainty •

The hydropower industry is not reliant on federal tax credits and incentives

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However, hydropower is eligible for the Production Tax Credit (PTC), which is set to expire at the end of 2013

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Congress needs to decide whether it will extend the credit or not so developers have the certainty they need as they pursue new projects

Legislation •

Legislation has been introduced in the House and Senate that would streamline the regulatory process for small hydropower projects across the country

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The Hydropower Improvement Act, S. 629, passed the Senate Energy and Natural Resources Committee and the Hydropower Regulatory Efficiency Act, H.R. 5892 unanimously passed the House earlier this year

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Both of these bills take incremental – but important – steps to improve the regulatory process for hydropower and should be starting points for further discussions in the next Congress 5