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Wind EnergyWind Energy

Recent California DevelopmentsRecent California Developments

Report to CREPC WIWET

Wind EnergyWind Energy

Recent California DevelopmentsRecent California Developments

Report to CREPC WIWET

Energy Commission Staff

Cynthia PraulAssistant Executive Director

January 21, 2003

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Renewable Energy In CA Supply Mix

Renewable Energy Program Auctions

Renewable Portfolio Standard

Provisions

Public Interest Wind Energy Research

Overview of PresentationOverview of Presentation

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CEC Contact InformationCEC Contact Information

• Renewable Energy In Renewable Energy In California Supply MixCalifornia Supply MixTim Tutt / Todd Lieberg916-654-4590ttutt@energy.state.ca.u

s

• Renewable Energy Renewable Energy Program AuctionsProgram AuctionsSuzanne Korosec916-654-4516skorsec@energy.state.c

a.us

• Renewable Portfolio Renewable Portfolio Standard ProvisionsStandard ProvisionsHeather Raitt916-654-4735hraitt@energy.state.ca.

us

• PIER Renewables PIER Renewables Wind Energy R&DWind Energy R&DDora Yen-Nakafuji916-653-4128dyen@energy.state.ca.u

sRenewable Call CenterRenewable Call Center

1-800-555-77941-800-555-7794

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I. Background: Renewable Energy I. Background: Renewable Energy in California Supply Mixin California Supply Mix

• The Highest Percentage of Renewables in California The Highest Percentage of Renewables in California (12.7%) was Achieved in 1993.(12.7%) was Achieved in 1993.

• For 2001, the Percentage was about 10.5%For 2001, the Percentage was about 10.5%• Renewable Generation Declined Between 1993-1998. Renewable Generation Declined Between 1993-1998.

This Trend Reversed in 1998 with the Beginning of the This Trend Reversed in 1998 with the Beginning of the CEC’s Renewable Energy Program.CEC’s Renewable Energy Program.

• The Percentage of Renewable Generation for 2001 The Percentage of Renewable Generation for 2001 was About the Same Level as it was in 1986 (10.5%)was About the Same Level as it was in 1986 (10.5%)

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California’s In-State California’s In-State Renewable Capacity (MW) Renewable Capacity (MW)

20002000

1379 383 1737

9362626

WindBiomass and WasteGeothermalSmall HydroSolar

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02000400060008000

1000012000140001600018000

GeothermalSmall Hydro(estimated)Organic WasteWindSolar

Renewable GWhs Generated in Renewable GWhs Generated in CaliforniaCalifornia

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Percent of Renewable Generation Percent of Renewable Generation in California that comes from Windin California that comes from Wind

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

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Percent of California's GWhs Percent of California's GWhs Derived from Wind Derived from Wind

Generation Generation

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

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II. Renewable Energy II. Renewable Energy Program(REP)Program(REP)

New Auction ResultsNew Auction Results

• Restructuring included PGC and established REPRestructuring included PGC and established REP• To date, the New Renewable Resources Account To date, the New Renewable Resources Account

has held three auctionshas held three auctions• First Auction: June 1998, $162 MillionFirst Auction: June 1998, $162 Million• Second Auction: November 2000, up to $40 MillionSecond Auction: November 2000, up to $40 Million• Third Auction: September 2001, up to $40 MillionThird Auction: September 2001, up to $40 Million

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Cumulative Total of All Three Cumulative Total of All Three New Account Auctions (MW)New Account Auctions (MW)

0100200300400500600700800900

1000

Total of All Three Auctions

BiomassDigester GasGeothermalLandfill GasSmall HydroWaste TireWind

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Summary of All Winning Projects Summary of All Winning Projects Participating in the New Renewable Participating in the New Renewable

Resources AccountResources Account

0

200

400

600

800

1000

1200

1400

Total MW Bid

MW On-Line MWCancelled

MW Not YetOn-Line

Wind Grand Total

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Target of 20 percent renewable energy for the state Each Electrical Corporation (IOU) shall increase its

procurement of eligible renewables by at least 1% of retail sales per year to reach 20% portfolio by 2017

Local Publicly Owned Utilities are directed to: Prepare individual plans to comply with RPS Implement Legislative intent while taking into

account effect on rates, reliability, financial resources, environmental benefit and report to customers annually

Applies to Community Choice Aggregators and ESPs (CPUC rulemaking to specify requirements)

Seeks to address problem of the lack of power purchase agreements

III: California’s Renewable Portfolio III: California’s Renewable Portfolio Std.Std.

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AB 995/SB 1194 (Wright/Sher, ‘00) Extended collection of Public Goods Charge (PGC) of $135 million per year over ten years, beginning 1/1/02.

AB 57 (Wright, ‘02) Directs utilities to file annual procurement plans to the CPUC

SB 1038 (Sher/Bowen, ‘02) Authorizes expenditures of PGC, funding for new facilities tied to RPS (almost $70 million/year)

SB 1078 (Sher, ‘02) Creates RPS

RPS: Legislative HistoryRPS: Legislative History

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By June 30, 2003 the CPUC shall adopt by rule, in consultation with the CEC:A process to provide criteria for rank ordering

and selection of least cost and best fit renewable resources

Flexible compliance rulesStandard Terms and Conditions to be used by

utilities in contracting for renewables, including performance requirements for renewable generators

A process for determining market prices

RPS: CPUC Implementation RoleRPS: CPUC Implementation Role

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Prepare renewable procurement plan--

“least cost best fit”: Assesses “annual or multiyear portfolio supplies

and demand to determine optimal mix of renewable generation resources with delivery characteristics that may include peaking, dispatchable, baseload, firm, and as-available capacity.”

Employs CPUC’s processes to meet Annual Procurement Targets, including least-cost best-fit, compliance flexibility, and (possibly) renewable diversity.

Describes a bid solicitation.

RPS: Utilities’ Implementation RoleRPS: Utilities’ Implementation Role

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Within 90 days of being deemed credit worthy, the utility would conduct solicitations to implement CPUC approved procurement Offer standardized contracts, for at least 10 years Contracts at or below market price considered

reasonable Any costs above market price can be supplemented

with PGC funds, to the extent funds are available, within caps

If unable to procure 1% in given year, 3 years to make up

Rank order resulting bids by least cost best fit Propose to CPUC which contracts to accept Sign contracts CPUC approves

RPS: Utilities’ Role (cont.)RPS: Utilities’ Role (cont.)

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Certify facilities as “eligible renewable energy resources”

Establish criteria for “incremental” output from existing geothermal facilities

Design and implement an accounting system to verify retail sellers’ compliance with the RPS

Verify that generation is counted only once in this or any other state

Develop comprehensive renewable electricity generation resource plan by December 1, 2003

RPS: CEC Implementation RPS: CEC Implementation RoleRole

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Allocate/award supplemental energy payments (SEPs) to eligible renewable resources to cover the above-market costs

May set caps on PGC /kWhMay reduce or terminate SEP if project fails to

meet obligationDetermine eligibility of out-of-state facilitiesDetermine definition of newDetermine applicability of requirement that only

25% of funds may go to any particular project Integrate PGC payments allowed by SB 90 with

SEP for 10 years

RPS: Integration with CEC RPS: Integration with CEC REPREP

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RPS: Implementation RPS: Implementation QuestionsQuestions

Verification and Accounting? Tags? Munis/ESPs? PGC/ Market Price:

What will the market price be? Will FERC and the courts accept it?

Will the PGC funds be adequate to meet the RPS? How will PGC funds be allocated among utilities/

others? How will projects that already have PGC awards be

integrated?

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IV. CA Wind Energy IV. CA Wind Energy ResearchResearch

PIERPIER• Economic MotivatorEconomic Motivator – wind energy most financed and – wind energy most financed and

developable renewable technologydevelopable renewable technology• California Energy Commission GoalCalifornia Energy Commission Goal – provide – provide

environmentally safe, affordable & reliable, diverse environmentally safe, affordable & reliable, diverse energy services/choices to the publicenergy services/choices to the public• Wind resource potential Wind resource potential 7000MW7000MW• OverOver 24 billion KWh wind generated24 billion KWh wind generated electricity to electricity to

displacedisplace NOx, CONOx, CO22 and other sources of emissions and other sources of emissions• Nearly Nearly $3.2 billion$3.2 billion investment revenue & jobs investment revenue & jobs

• National Energy (DOE/EERE) GoalNational Energy (DOE/EERE) Goal – promote diverse – promote diverse fuel supplies & foster a secure and reliable energy fuel supplies & foster a secure and reliable energy system that is environmentally sustainable and increase system that is environmentally sustainable and increase national renewable portfolio to 20% by 2020national renewable portfolio to 20% by 2020

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Top 5 Key ActivitiesTop 5 Key Activities

• Support for small wind communitySupport for small wind community• High-resolution remapping of CA wind High-resolution remapping of CA wind

resources & follow-on activitiesresources & follow-on activities• California Wind Energy ConsortiumCalifornia Wind Energy Consortium• Forecasting effortsForecasting efforts• Understand California’s Wind resources Understand California’s Wind resources

- monitoring & validation- monitoring & validation

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Wind Program AccomplishmentsWind Program Accomplishments

• Established California Wind Energy Consortium Established California Wind Energy Consortium (forum Dec 17-18, 2002)(forum Dec 17-18, 2002)

• PIER publishing annual WPRS reports (data PIER publishing annual WPRS reports (data from 1985-2001 available)from 1985-2001 available)

• Re-mapping and ValidationRe-mapping and Validation• Installation of WTC EMD 500kW turbine in Installation of WTC EMD 500kW turbine in

Lancaster, CA test siteLancaster, CA test site• Support for California based Clipper Windpower Support for California based Clipper Windpower

Technology to develop advance drivetrain (DGD)Technology to develop advance drivetrain (DGD)• Strong collaboration with industry and national Strong collaboration with industry and national

efforts (DOE, NREL)efforts (DOE, NREL)

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Re-mapping & Validation Re-mapping & Validation

• High resolution maps avail.High resolution maps avail. http://www.energy.ca.gov/maps/wind.html • Numerical modeling techniques coupled with meteorological expertise Numerical modeling techniques coupled with meteorological expertise

& field measurements& field measurements• Integrate GIS techniques for analysis & planningIntegrate GIS techniques for analysis & planning• Couple tall tower and Couple tall tower and remote sensingremote sensing data data

High resolution maps & GIS tools for planning wind project development

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Top 5 Lessons LearnedTop 5 Lessons Learned

• Invest in long-term, programmatic Invest in long-term, programmatic program approach for continuity program approach for continuity (transmission, siting, planning)(transmission, siting, planning)

• More collaboration among intra-state and More collaboration among intra-state and inter-states (mapping, forecasting, inter-states (mapping, forecasting, policies) – understanding of regional policies) – understanding of regional issues issues

• State leadership in standardization, State leadership in standardization, setting direction and data collectionsetting direction and data collection

• Education, educationEducation, education• Communication, communication Communication, communication

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Anticipated Future Wind Anticipated Future Wind RD&D ActivitiesRD&D Activities

• Developing wind systems for low wind speed Developing wind systems for low wind speed areas in CA ($5 million)areas in CA ($5 million)

• Wind Forecasting ($1 million)Wind Forecasting ($1 million)• Lowering the cost of wind energy systems ($2 Lowering the cost of wind energy systems ($2

million)million)• Integrating wind electricity into California’s grid Integrating wind electricity into California’s grid

($1 million)($1 million)• Lowering the cost of small wind energy systems Lowering the cost of small wind energy systems

($1 million)($1 million)