Renewable Energy and Energy Efficiency Caucus. Page 2. 2. SDG&E is Committed to Meeting Renewable Goals. SDG&E .
Business Council for Sustainable Energy's State of the Industry Series Sponsored by:
The United States House of Representatives Renewable Energy and Energy Efficiency Caucus
Trends and Barriers to Increased Deployment and Investment in Renewables
Washington, DC. May 9, 2012
Juancho Eekhout | Director of Origination & Portfolio Design
SDG&E is Committed to Meeting Renewable Goals SDG&E Historic Performance (RPS as % of Retail Sales)
CA RPS Requirements (RPS as % of Retail Sales)
E
E
‘ CP1*
‘14-16 CP2
‘17-20 CP3
* CP = Compliance Period
2
SDG&E also explores investing in renewables if our participation enhances viability and reduces customer costs Washington
Rim Rock Wind: • 189 MW, CODe in 2012 Montana
Oregon
Solar Energy Program:
Idaho
• 26 MW, UOG
Wyoming
• CPUC approved in 2010 • CODs in 2014
• CPUC / FERC approved in 2011 • Subject to CPs being met, funding (tax equity) at COD
Nevada Utah
Colorado
California
Shu’luuk Wind: • 160 MW, CODe in 2014
Arizona
New Mexico
• Expected to be filed (tax equity) with CPUC in 2012 • Potentially, one of the first US wind project with Tribal ownership
3
Renewable Portfolio Standards
Source: FERC, as of May 2011
4
Renewables have had successful penetration in the last 6 years United States Gas
Coal & Oil
Renewable
100%
100%
90%
90%
17,168 MW
21,924 MW
70%
60%
50%
40%
30%
19,61 MW 20,654 MW
10%
7,145 MW
90%
3,999 MW 7,010 MW
60%
50%
40%
2006-08
2009-11
Gas
Renewable
462 MW
1,624 MW
80%
70%
10,109 MW
30%
4,234 MW
70%
60%
50%
40%
1,962 MW 2,954 MW
30%
20%
10%
0%
376 MW
Coal & Oil 100%
20%
20%
0%
Renewable
80%
% of total capacity additons net of retirements
% of total capacity additons net of retirements
80%
Gas
California
% of total capacity additons net of retirements
Coal & Oil
WECC
783 MW
1,401 MW
2006-08
2009-11
10%
0%
Source: Energy Information Administration, Annual Generator Information Report 2011
2006-08
2009-11 5
Pricing is decreasing and viability increasing… both benefiting end customers
More Expensive PPAs
Less Expensive PPAs
20082009
20102011
20112012 20052007
20032005
More Speculative Projects
Source: offers received by SDG&E on renewable RFOs and industry analysis
Highly Viable Projects 6
Key Factors for Continued Deployment of Renewables Issue
Description
Policies
Relative Pricing
• Spot Natural Gas prices remain low • Renewables competitiveness is assessed taking into account the contango market structure
Encourage Nat Gas and Renewables
Incentives Set to Expire
• Forecasters predict ~8% p.a. growth through 2025 but assume PTC extension (expire in 2012) • Wind may lose competiveness
Extend PTCs. Comprehensive support past 2016
Tax Equity
• Cash Grant has supported two thirds the capacity additions since 2009 • ITCs harder to monetize for smaller developers
Support nontraditional Investors
Transmission & Integration
• Transmission needed • Intermittency in renewables require integration • Storage may help with integration and curtailment of renewables
Support Integration & Transmission Needs 7
