NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Review of Renewable Energy Generation in U.S.

CDFA, Intro to Energy Finance

David Feldman

July 31, 2012

2

U.S. Energy Mix

•Currently Renewables only produce ~5% of electric generation •However, a large portion of capacity being built in near future will come from renewable sources

Geothermal Nuclear

Other

Coal

Solar Thermal

and Photovoltai

c

Wind

Natural Gas

Planned U.S. Electric Generation Capacity Additions, 2011-5 (85 GW)

Coal

Natural Gas

Nuclear

Petroleum Hydroelectric

Other

Wind

Solar Thermal & PV Wood

Geothermal Other

Biomass

Other Renewables

Net U.S. Generation by Energy Source, 2011

Sources: Energy Information Agency (EIA). “Electric Power Monthly”, 07/26/12. Planned U.S. Electric Generation Capacity Additions only includes systems > 1 MW, therefore distributed PV included through: EIA, “Annual Energy Outlook”, table A16, PV End-Use Sector, 06/25/12.

3

Renewable Portfolio Standards

Current policy is largely driven by

states through the electoral process (aka the people)

But there are federal incentives:

• Production Tax Credit (PTC): ~2.2 cent/kWh of energy produced. Exp. end of ‘12. • Investment Tax Credit (ITC): Tax credit on 30% of the capital cost (non avail. for wind) • Treasury 1603 grant (exp. end of ‘11): Cash grant instead of tax credit (limited tax appetite) • Clean Renewable Energy Bonds (CREB’s): Bonds for non-taxable entities • Accelerate Depreciation

4

Different Types of Solar

Solar Thermal

Photovoltaics (PV)

Concentrated Solar Power (CSP)

Distributed Generation, on-site or near point of use

Centralized Generation, large users or utilities

5

Photovoltaic Technology •Employs a semiconductor material to generate electricity

•All other types of energy generation rely on mechanical energy •PV produces DC current which must be converted to AC energy to feed into grid (through an inverter)

•Market: Residential; Commercial, Utility •Geographically diverse

•System Size: 1 kW to 250 MW •U.S. Capacity, EY ‘11: ~4 GW •Technologies: thin-films, crystalline silicon (c-Si), CPV

•c-SI modules have 40+ yr. history and are ~85% of market

•Storage: batteries are used, though is a niche market •Distributed generation relies on “net-metering” or sells directly to grid

6

Photovoltaic Solar Resources

0

10

20

30

40

50

2005 2006 2007 2008 2009 2010 2011E 2012P 2013P 2014P

Glo

bal

De

man

d (

GW

)

U.S. China India Japan Europe ROW

•U.S. has very good PV resources as compared to places like Germany/Spain •Last year Germany installed ~4x more PV capacity that U.S. and is 1/6 the size

•Subsidies have played a large role on where PV has been installed

Note: E = estimate, P = projection Sources: median of Barclays (03/19/12), BNEF (02/06/12), Citibank (02/22/12), Cowen (03/20/12) EPIA (Market Outlook 2011, Global Market Outlook until 2015), Goldman Sachs (02/29/12), Navigant Consulting (01/26/12) Photon Consulting (Solar Annual 2012), Stifel Nicolaus (01/25/12), UBS (01/20/12)

7

U.S. Installation Breakdown

* “Next Four States”: 2011: NM , PA, CO, NY Sources: GTM/SEIA : U.S. Solar Market Insight Q4 2011 & 2011 Year-in-Review. Q1 ’10 – Q2 ‘11 data supplemented by earlier GTM/SEIA Solar Market Insights

• An estimated 1.86 GW of PV was installed in U.S. in 2011 • Non-residential installation was the largest sector, followed closely by the Utility sector

• CA & NJ consistently the top two states in PV U.S. installations

62 62 66 75 72 69 73 83 67 73 101 119 166 212 173

250

22 51 18

167 38 50

227

443

152 187 187

361

276 331

473

776

-

100

200

300

400

500

600

700

800

900

Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11

Qu

art

erl

y P

V I

nsta

lle

d (

MW

DC)

U.S PV Installations by Market Segment

Utility

Non-Residential

Residential

California 542

New Jersey 313 Arizona

273

Next Four States*

355

Other 256

U.S. PV Installations by State (MWDC), 2011

8

Sample PV Projects

Residential System Installed by SolarCity

Commercial System Installed by SunEdison

Utility-Scale System Installed by First Solar

9

CSP: Overview

•CSP requires direct sunlight •Limited to certain areas like Southwest U.S.

•Different Technologies: • Troughs, Towers, Dishes

•Most applications are very large in scale •After fluid is heated, it operates much like traditional energy generation (coal, nuclear) •Has the ability to store energy

• Molten salt •Can be incorporated into traditional energy generation (hybridized)

10

• Linear Focus – Tube Receiver

• Scale: Utility | 30 to 250 MW

• Solar Concentration: 50 suns

• Storage Capability – Oil to Salt Heat Exch.

• Commercially Proven – 20 yrs Experience

• Point Focus – Central Receiver

• Scale: Utility | 3 to 250 MW

• Dual Axis Tracking – Azimuth & Elevation

• Solar concentration: 800 suns

• Storage Capability – Salt | Lowers Cost

• First Commercial Plant Just Completed

CSP: Different Technologies Troughs Towers

• Point Focus – Engine/Receiver

• Scale: Distributed/Utility | 10kW to 100 MW

• Dual Axis Tracking – Always Looking at the sun – No cosine loss

• Storage Capability: Under Development

Dishes

11 11

Under Development: 7.5 GW

Under Construction with DOE Loan Guarantees: Ivanpah (Bright Source): 392 MW Tower $1.6 B Solana (Abengoa): 280 MW Trough w/Storage $1.4 B Crescent Dunes (Solar Reserve): 110 MW Tower w/Storage $0.7 B Genesis (FPL-NextEra): 250 MW Trough $0.7 B Mojave (Abengoa): 280 MW Trough $1.3 B Total 1,312 MW $5.7 B

Currently Operating: SEGS 1-2 (Cogentrix): 44 MW Trough SEGS 3-9 (FPL-NextEra): 310 MW Trough Nevada Solar One (Acciona) 64 MW Trough Martin (FPL-NextEra): 75 MW Trough Sierra (eSolar) 5 MW Tower Coalinga Hybrid (Bright Source) 5 MW Tower Maricopa (Stirling Energy Systems) 1 MW Dish Cameo Hybrid (Abengoa) 1 MW Trough Total 505 MW

CSP Market Status: U.S.

12

CSP: Sample Projects

Solana • Under Construction • Location: Phoenix, AZ • Developer: Abengoa Solar • Capacity: 280 MWe • Technology: parabolic trough w/ 6 hours storage

Solar Two • Built: 1996 • Location: Barstow, CA • Developer: DOE, SCE • Capacity: 10 MWe • Technology: molten-salt power tower

13

Wind Turbine Technology

Rotor

Yaw

Pitch

Rotation • Blade acts much like an airplane wing, using “lift” to turn blade

• Designed to turn into wind to capture most energy

• Blades turn shaft, which turns gears connected to generator

• Higher heights capture faster, less turbulent wind

• Generally divided into: nacelle; tower; and foundation

Adjusted to control rotation speed and generated power

14

Sizes and Applications

Small (10 kW)

Homes

Farms

Remote Applications

(e.g. water

pumping, telecom

sites, icemaking)

Intermediate

(10-250 kW)

Village Power

Hybrid

Systems

Distributed

Power

Large (250 kW – 2+ MW)

Central Station Wind Farms

Distributed Power

• Different sized turbines for different applications

• The majority of capacity currently installed is from large systems

• Off-shore turbines are relatively new development

• More expensive installation & O&M

• Larger turbines with more reliable, stronger wind

15

Regional Potential of Wind

• The strongest wind resources in U.S. is in the middle of the country – Most of U.S. capacity is currently installed in that region – Transmission needed to connect to large portions of population

16

Wind Installation Market

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Cap

acit

y (G

W)

Annual Growth in Wind Power Capacity

PTC lapses

Fin. crisis, lower demand, cheaper nat. gas.

International Rankings of Wind Power Capacity

Annual Capacity (2010, MW)

Cumulative Capacity (end of 2010, MW)

China 18,928 China 44,781 U.S. 5,113 U.S. 40,267 India 2,139 Germany 27,364 Germany 1,551 Spain 20,300 U.K. 1,522 India 12,966 Spain 1,516 France 5,961 France 1,186 U.K. 5,862 Italy 948 Italy 5,793 Canada 690 Canada 4,011 Sweden 604 Portugal 3,837 Rest of World 5,205 Rest of World 28,371

TOTAL 39,402 TOTAL 199,513

• U.S. is one of the leading markets for wind turbine installation • In 2010 was supplanted from top spot by China which installed over 3x the

capacity of U.S. • 47 GW installed in U.S. through 2011

• Majority of capacity has been installed in past 5 years • Vulnerable to loss of Federal incentives

• PTC currently expires at end of 2012

17

Sample Wind Project

Lakefield Wind Project, MN

• Capacity: 205.5 MW – 137 GE 1.5 MW turbines

• Installed in 2011 (11 month build)

• 20 year PPA between EnXco (developer) and IPL (offtaker)

• Financed through leveraged lease with Union Bank & Metlife

Source: Renewable Energy Magazine, 10/18/11

18

How Geothermal Electricity Generation Works

Source and more information at : DOE Geothermal Technologies Program, “How a Geothermal Plant Works (Simple)” at http://www1.eere.energy.gov/geothermal/gpp_animation.html

Turbine & Generator

19

Geothermal Electricity Generation in the U.S. in 2011

Source: DOE Geothermal Technologies Program, “Geothermal Technologies Program Annual Peer Review ” at http://www1.eere.energy.gov/geothermal/pdfs/gtp_2012peerreview_dhollett.pdf

and Geothermal Energy Association (GEA), “Annual US Geothermal Power Production and Development Report” at http://geo-energy.org/reports/2012AnnualUSGeothermalPowerProductionandDevelopmentReport_Final.pdf

3,187 MW installed in US •97% in CA and Nevada •5 new/expanded plants in 2011 (91 MW)

147 confirmed projects under development in US

•Capacity of ~4,116 – 4,525 MW under development •Project development activity in 13 states outside of CA and NV (Source: GEA)

Very limited number of operating geothermal rigs in US (approx. 6-10)

•Estimates of +1900 for onshore oil and gas (not including horizontal drilling)

US Geothermal Hydrothermal Resource

Source: NREL Dynamic Maps, Geothermal

20

Sample Geothermal Project

The Geysers, CA • Capacity: 1.5 GW

– 18 separate power plants – 50% of U.S. installed capacity

• First electric generation from site: 1960 – Reached peak capacity in 1987

• Owned by several companies – Calpine owns 15 of the power plants

• Future Geothermal development in U.S. will most likely use different technology – Geysers produce very high-temperature steam – Other geothermal technologies use heat exchanger to boil fluids that vaporize at

lower temperatures

Sources: Calpine corporate website, www.geysers.com. http://www.power-technology.com/projects/the-geysers-geothermal-california/

Thank You David Feldman Solar Technology Financial Analyst National Renewable Energy Laboratory 202-488-2231 david.feldman@nrel.gov