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Transcript of Selecting Renewable Projects at Colorado Springs Utilities APPA Conference John Romero GM...
Selecting Renewable Projects at Colorado Springs Utilities
APPA Conference
John RomeroGM Acquisition, Engineering and Planning
October, 2009
Overview
• Overview of Colorado Springs Utilities
• What is Driving Renewable Investment
• Which Projects and Why
• Challenges with Renewables
• Summary
Overview of Colorado Springs Utilities
Total Energy Resource by Entity 2008, MWH
Coal, 3,524,364 ,
66%
Front Rang n gas,
1,149,813 , 22%
Spot Purchases,
194,059 , 4%
Wind, 1,565 , 0%
Nat Gas, 14,234 , 0%
Hydro, 416,686 , 8%
DSM, 6,660 , 0%
2008 Capacity Mix MW
Coal46%
FRP Purchase32%
Hydro - WAPA7%
Wind0%Hydro - SU
3%
Nat Gas11%
Solar0%
DSM1%
•Four Service Utility
•500,000+ Combined Customers
•863 MW Peak (2007)
•200,000+ Electric Customers
Front Range
• Colorado Renewable Portfolio Standard (RPS)
• Customer Desire for Renewables
• Potential Environmental Legislation
• American Recovery and Reinvestment Act (Stimulus)
What is Driving Renewable Investment?
Colorado Renewable Portfolio Standard
Investor Owned Utilities Munis/Co-ops2008-10 5% 1%2011-14 10% 3%2015-19 15% 6%2020 20% 10%
• Renewable energy: solar, wind, geothermal, biomass, landfill gas, animal waste, hydropower, recycled energy and fuel cells.
• IOU’s must generate at least 4% of the requirement from solar with one-half coming from customer on-site generation
• No solar requirement for munis/co-ops• 300% RPS credit per MWH for solar before July 1, 2015• 125% RPS credit per MWH for Colorado generated renewable energy
Percentage based on retail electric sales
What is Driving Renewable Investment?
Customer Desire for Renewables
• General Desire• 76% of customers express a willingness to pay $1 - $2 more per
month to add wind to the resource mix
• Business Customers• Universities/small commercial requesting additional “green” power
• Military Bases• Stimulus Money
• Net Zero Energy Users by 2020
What is Driving Renewable Investment?
Potential Environmental Legislation
• Waxman-Markey• Clean Energy
• Renewable Energy and energy efficiency: 6% in 2012 rising to 25% in 2025
• Carbon Capture and Sequestration
• Smart Grid
• Global Warming• CO2 reductions from 2005 levels: 3%:2012, 17%:2020, 42%:2030
and 83%:2050
What is Driving Renewable Investment?
American Recovery and Reinvestment Act (Stimulus)
• $11 billion for a smarter grid
• $5 billion for low-income home weatherization projects
• $4.5 billion to green federal buildings
• $6.3 billion for state and local renewable energy and energy efficiency efforts
• $600 million in green job training programs
• $2 billion in competitive grants to develop energy storage
What is Driving Renewable Investment?
• Renewable Energy Credits (RECs)
• Solar
• Wind
• Hydro
• Biomass
Which Projects and Why?
$-
$1,000.00
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
$7,000.00
$8,000.00S
olar
PV
Wav
e
Sol
ar T
herm
al
Tid
al
Win
d
Win
d O
ffsh
ore
Hyd
ropo
wer
(new
)
Hyd
ro
Bio
mas
s
Geo
ther
mal
MS
W -
Lan
dfill
Gas
CT
CC
GT
IGC
C
Coa
l
Nuc
lear
Fue
l Cel
l
Ove
rnig
ht
Co
sts
(200
6$/K
W)
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
Sol
ar P
V
Wav
e
Sol
ar T
herm
al
Tid
al
Win
d
Win
d O
ffsh
ore
Hyd
ropo
wer
(new
)
Hyd
ro
Bio
mas
s
Geo
ther
mal
MS
W -
Lan
dfill
Gas
CT
CC
GT
IGC
C
Coa
l
Nuc
lear
Fue
l Cel
l
Cap
acit
y F
acto
r
Source: NREL May 2009
Renewable Energy Credits
• Five Year Contract with Western Area Power Administration (2006 – 2010)
• Purchase of over 1.5M RECs
• Price: $2.49 / MWh
• Assured Compliance through 2018
• Value Proposition of $100M+ over Alternatives
Which Projects and Why?
Wind
• Issued RFP for 10 – 100 MW of Wind
• 14 Respondents, 4 Finalists, Recommendation of Award in June 2009
• Wind Integration Study: 50 MW Limit
• Contract Negotiations for Delivery in 2011
Which Projects and Why?
Solar
• United States Air Force Academy (USAFA) Stimulus
• $18.3 Million to Provide Solar Service
• 2 – 4 MW of Capacity
• Working with USAFA to Meet Military Renewable Objectives
Which Projects and Why?
Hydro
• Cascade Hydro• 850 KW
• 2009 Online Date
• Finished Water Micro Turbines (evaluation stage)• USAFA Project
Which Projects and Why?
Biomass – Co-firing
• 20 MW co-fire at Drake Coal Facility
• Reduced Coal Burn of 75,000 tons
• 150,000 MWh of Production
• Grants (applications)• USDA Woody Biomass Grant ($250,000)• Cooperative State Research Education and Extension Service ($5
Million matching)
Which Projects and Why?
• Costly Compared to Traditional Resources (at least, for now)
• Typically Low Capacity Factors
• Intermittent
Challenges with Renewables
Summary
• Renewables Driven by:• Legislation
• Customer Desire to be “Green”
• Desire to be Environmentally Friendly
• Resource Portfolio Diversity
• Project Selection• Cost
• Customer Directed
• Integration• Changes to Dispatching Resource Mix