Feed in Tariffs: A Time for Real Action on Renewable Energy
Roadmap to a 100% RE Future
June 12, 2010 San Francisco, California
Designing the Perfect FIT • Defining the objective? – – – – – –
Increasing the overall RE content Creating jobs and new Industries Improving the environment Mitigating climate change Increasing energy security Reducing energy costs
Designing the Perfect FIT Review existing frameworks that support the objectives – separate the doers from the green washers! – – –
If the intent is not real the results will not be significant (UK (initially), US, non FIT countries). Effectively Supporting the growth of a new Sector is a key indicator Investment community must become a central player and partner in any scheme.
RPS systems RPS a target or quota, can be legislated or determined in policy regulations. May specify regulation to achieve the target/quota • In many cases based on a system of tradable renewable credits and bidding processes (RFPs) • Value of the credits is determined by a wide range of design parameters
Feed in Tariff Benefits FEED-IN
•Rapid deployment of resources •Rapid development of local manufacturing •Increase in local acceptance and participation •Encourages geographic distribution •Transparent and lower administrative costs •More jobs, more investment, more competition in manufacturing, equipment and suppliers •Projected and real costs are minimal
Benefits of RPS or Quota Systems RPS (REC) Quota Systems
Predictable, rather than anarchic, market growth Minimizes costs to taxpayers and/or ratepayers through increased competition among developers No picking technological winners Market-based system of tradable credits Projected costs minimal in reality – project costs are higher
RPS in Trouble (hopefully???) • Focus on lower price – Geographic concentration and utility influence – High contract failure rates as there is investor uncertainty Targets near-market technologies and leaves technology markets to foreign manufacturers Deployment rates under current regimes are insufficient to meet stated objectives and expansion falling short of targets in most cases as in CA. Mono-price RPS market means windfalls for existing generators and good sites with power companies in control Favors oligopolies of large developers that can handle risks of investment in centralized generation; drives out small investors and companies • No picking winners means no portfolio diversity or encouragement of longer term resources – not “dynamically efficient” • Administratively cumbersome and costly
Wind energy in Germany
In 2009 Germany installed nearly 2,000 MW of new wind generating capacity--roughly equivalent to 1,000 wind turbines.
FIT Success Stories
FIT Success Stories Italy installs more capacity in two months 250 MWs than CA in a year • Italy is three-fourths the size of California with similarly sized economies. Italy has a population of 60 million, to California's 40 million. The population of the US is five times that of Italy.
FIT Success Stories • Germany installed more solar PV in the first month of 2010, about 240 MW, than the state of California installed in all of 2009, 212 MW. • Italy installed 720 MW of solar PV in 2009, nearly all of that on rooftops. In contrast, the US installed 435 MW during the same period
US RPS Laws
Designing the Perfect FIT State initiatives and programs play a key role for the development of new technologies.
Newly Installed Wind Capacity in Europe
An Epic Battle
Incentives vs Subsidies
Designing the Perfect FIT • Design the overall objective(s) • Create a level playing field (keep utilities out) • Design a system that is predictable, long term, transparent and easy to administer • Ensure interconnection and payments • Do not pick technological winners • Built in flexibility to accommodate changes • Encourage technological breakthroughs (R&D) • No artificial limits
Future Actions • Provide opportunity for technological and economic development in all sectors • Ensure Investor clarity and long term confidence • Built in flexibility to anticipate problems • Anticipate new challenges and opportunities
Future Actions • Forge new alliances and partnerships – – – – –
Energy storage Transportation Micro-grids and smart grids Conservation Buildings as energy generators
Climate Crisis
Pollution Crisis
Water Crisis
Food Crisis
In the meantime, fossil fuel dependence is causing multiple convergent, existential crises. If you don’t change directions, you may end up where you are headed. - Lao Tzu
Safety/Security Crisis
Biodiversity Crisis
Poverty Crisis
Energy War Crisis
Thank you
www.renewables100.org
Solutions for a 100% RE future