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Who is EnerVision?. OverviewManagement, engineering and technical consulting firmSince 1998, an independent employee-owned companyPrimarily serving electric utilities in more than 30 statesPrimary ServicesAlternative Energy Technical AdvisorRenewable Energy (RE)Energy Efficiency (EE)Demand S
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1. 2008 Bonbright ConferenceSession 5: Current Environmental Issues The Alternative Energy Picture
Nelson Hawk
Chairman
EnerVision, Inc.
Atlanta, GA
nelson.hawk@enervision-inc.com
888-999-8840
October 10, 2008
2. Who is EnerVision? Overview
Management, engineering and technical consulting firm
Since 1998, an independent employee-owned company
Primarily serving electric utilities in more than 30 states
Primary Services
Alternative Energy Technical Advisor
Renewable Energy (RE)
Energy Efficiency (EE)
Demand Side Management (DSM)
Demand Response (DR)
Power Supply
Transmission
Pricing & Rates
End-User & Energy Systems
Management Consulting
3. Today’s Discussion – Key Points Alternative Energy Sources Strategic Overview
Why Alternative Energy?
What/How?
Southeastern Update
Key Contingency Planning Issues/Conclusions
4. 1. Alternative Energy Sources Strategic OverviewElectric Utility Basic Mission: Provide reliable, affordable electric services to meet customers’ needs and community requirements
5. 1. Alternative Energy Sources Strategic OverviewPower Supply Options
6. “Today I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years.”
Al Gore
July 17, 2008 1. Alternative Energy Sources Strategic Overview
7. 1. Alternative Energy Sources Strategic Overview The Man with the Plan?
Build Wind to offset natural gas generation.
Use natural gas as transportation fuel.
“The United States is the Saudi Arabia of wind power.”
“An economic revival for rural America.”
“A cheap new replacement for foreign oil.”
T. Boone Pickens
8. 2. Why Alternative Energy? Rising Energy Prices/Future Construction Costs
Environmental Drivers
Energy Security/Independence
Technology Advancements
Government Emphasis
Commercial Customers/ Community Focus
Economic Development
9. 2. Why Alternative Energy?A. Rising Energy Prices/Future Construction Costs
10. 2. Why Alternative Energy?B. Environmental Drivers Biggest Concern:
Climate change/greenhouse gases (GHG)
Carbon emissions reduction – carbon footprints
Key Question:
Are alternative energy sources the “low-hanging fruit” to reduce carbon emissions?
Other environmental concerns:
Air
Water
Land-use
11. 2. Why Alternative Energy?C. Energy Security/Independence Transportation Sector
Dependency on foreign sources of oil
Major focus on improving biofuel opportunities
Corn-based ethanol
Cellulosic ethanol
Biodiesel
Weather/Storm Impacts
Not another Katrina situation
Natural Gas
Growing potential dependency on foreign sources
More Liquefied Natural Gas (LNG) Facilities
12. 2. Why Alternative Energy?D. Technology Advancements Renewable Resources
Wind/solar designs/equipment efficiency gains
Expanding solar markets
Geothermal experiences increasing
Biomass technologies improving
Increased R&D activities
Ocean/wave/tidal power technologies
Governments/Universities emphasis
13. 2. Why Alternative Energy?D. Technology Advancements Energy Efficiency (Smart Grid)
Automated thermostats
Equipment operating cost calculators
Web services
Energy cost calculators
On-line audits
Whole house controls
Home energy monitors
14. 2. Why Alternative Energy?D. Technology Advancements Load Management (Smart Grid)
Intelligent switches
Two-way communications/remote control-configuration
Customer web access
Demand Response Tariffs (Smart Grid)
Time of use (TOU) rates
Real-time pricing (RTP)
Critical peak pricing (CPP)
Others (Smart Grid)
Solar power options – PV/water heating
Plug-in hybrids
Combined heat and power (CHP)
15. 2. Why Alternative Energy?E. Government Emphasis Federal/state tax incentives
Energy Independence and Security Act (EISA) – 2007
Renewable production tax credit (PTC) status
Feed-in tariff options
Appliance standards/building codes
Government programs/plans
Larger R&D funding
EPA ENERGY STAR
State energy strategies
Government facility programs/mandates
Approval of power plants
Renewable Portfolio Standards (RPS)
16. 2. Why Alternative Energy?E. Government Emphasis
17. 2. Why Alternative Energy?E. Government Emphasis EE/DSM/DR – National Action Plan (NAP)
Major players – DOE, EPA, NRECA, APPA, EEI, many others
Key Implementation Steps:
Recognize as high-priority
Make a strong commitment
Communicate benefits/opportunities
Promote cost-effective program funding
Modify internal policies and ratemaking practices
Proposed NAESB Standard
18. 2. Why Alternative Energy?F. Commercial Customer/Community Focus Major “green” business initiatives
Cities/communities adopting climate change initiatives
Coordinated university/college networks
19. 2. Why Alternative Energy?G. Economic Development State governments focusing on creation/ addition of alternative energy jobs
Consideration of carbon reduction strategies with industry recruitment
More environmental considerations
Focus on clean/green businesses
20. 3. What/How? What constitutes renewable resources/green power? (utilities/customers/third parties)
21. 3. What/How? What constitutes EE/DSM efforts?
Energy Efficiency (EE) Offerings
Energy Audits
Energy Information/Education/Training
End-Use Equipment Measures/Funding-Incentives
22. Energy Efficiency (EE) Offerings
Building Programs (Touchstone Energy Homes)
Existing Facilities
New Facilities
Advisory Services
LEED Certification
ASHRAE Standard 189P – Green Buildings – new
3. What/How?
23. Demand-Side Management (DSM) Offerings
Load Control
HVAC
Water Heating
Pumps – Pools/Irrigation, etc.
Other
3. What/How?
24. Demand Response (DR) Offerings
Advanced Metering Systems
Smart Metering Equipment Options
Rate Options
3. What/How?
25.
3. What/How?
26. 4. Southeastern UpdateTVA Current Traditional Power Supply Strategies
2007 activities
Drought reduces hydro output
Market purchases raise rates (over 20%)
Browns Ferry nuclear unit – mid-2007
Next steps – future plans
Complete Watts Barr nuclear unit – 1200 MWs by 2012
Explore Bellefonte nuclear options
Continue to meet environmental emissions requirements – existing coal units
Do not build new coal units until carbon situation defined
Work with Seven States Corporation (TVPPA)
Own/operate generation resources within + or – 5% of peak load
27. 4. Southeastern UpdateTVA Current Alternative Energy Strategies
Major commitment – reduce system peak demand – 1400 MWs by 2012 - $1 billion five-year budget
Focus on energy efficiency (EE), demand side management (DSM), and demand response (DR)
Pricing strategies (wholesale/retail) evolving
Exploring DR technology options – smart grid
Develop, implement and measure effective programs
Continue renewable energy (RE) efforts
Green Power Switch Program
No RPS
28. 4. Southeastern UpdateTVA Contingency Plans – Short Term
Hope for rain
Measure/verify alternative energy activities
Buy/build natural gas options – CCs and CTs as necessary
Contingency Plans – Long Term
Build nuclear plants
Monitor evolving carbon constraint plans for coal possibilities in the future
29. Current Traditional Power Supply Strategies
2007 Activities
Move forward with Cliffside coal unit
Phase out existing old coal plants
Next Steps – Future Plans
Pursue nuclear options
Continue to meet environmental emissions requirements – existing coal units
Do not build new coal units until carbon situation defined
4. Southeastern UpdateNorth Carolina
30. Current Alternative Energy Strategies
REPS legislation enacted – August 2007
RE/EE/solar/waste requirements
Utilities’ renewable resource RFPs
New NCUC rules – February 2008 (general)
Interconnection requirements updated
New net metering docket underway
IRP/REPS compliance plans filed – fall 2008
Duke solar program
Duke Save-A-Watt Program decision – fall 2008
Focus on EE, DSM, DR and RE
DENR Climate Change Plan – 2008
4. Southeastern UpdateNorth Carolina
31. Contingency Plans – Short Term
Comply with REPS requirements
Measure/verify alternative energy activities
Comply with climate change state requirements
Build natural gas options – CCs and CTs as necessary
Contingency Plans Long-Term
Build nuclear plants
Monitor evolving carbon constraint plans for coal possibilities in the future
4. Southeastern UpdateNorth Carolina
32. Current Traditional Power Supply Strategies
2007 Activities
Coal options cancelled (over 4000 MWs) – except recent Seminole unit
Governor/legislature emphasis on climate change/GHG efforts
Next Steps/Future Plans
Move forward with nuclear power plants
Improve/expand natural gas facilities
4. Southeastern UpdateFlorida
33. Current Alternative Energy Strategies
HB 7135 – passed/signed – June 2008
FPSC working on RPS recommendations – 02/09
Navigant renewable energy assessment underway
DEP working on climate change recommendations – 02/09
FPSC approves new interconnection/net metering standards for IOUs – 2008 (detailed)
Emphasis on biofuels/biomass
Focus on EE, DSM, DR and RE
Overall goal – impact climate change results 4. Southeastern UpdateFlorida
34. Contingency Plans
Measure/verify alternative energy activities
Expand solar options – utility/customers
Build nuclear plants
Build natural gas options – CCs and CTs as necessary
4. Southeastern UpdateFlorida
35. Current Traditional Power Supply Strategies
2007 Activities
Follow-up on State Energy Strategy (SES)
Next Steps/Future Plans
Georgia Power IRP – 2007 results
Expand Vogtle Nuclear Plant
Build natural gas CCs and CTs as necessary
Coal options still being pursued
Continue to meet environmental emissions requirements – existing coal units 4. Southeastern UpdateGeorgia
36. Current Alternative Energy Strategies
Implement SES results
Focus on energy efficiency (EE)
Focus on biomass/biofuels
Governor initiates Conserve Georgia – 2008
State government emphasis – economic development
Expand renewable energy efforts voluntarily
Focus on EE, DSM, DR, and RE
No RPS 4. Southeastern UpdateGeorgia
37. Contingency Plans
Continue to consider coal options
Build nuclear plants
Measure/verify alternative energy activities
Assess biomass – electric versus biofuels
Build natural gas options – CCs and CTs as necessary 4. Southeastern UpdateGeorgia
38. Similarities
Emphasis on EE, DSM, DR and RE
Need to measure/verify alternative energy program results
Must meet environmental emissions requirements
Nuclear plants being pursued
Natural gas options – contingency/backup plans
Differences
RPS in NC and FL
Climate change emphasis in NC and FL
Interconnection/net metering expanded – NC and FL
Coal options – GA
4. Southeastern UpdateComparisons
39. Federal Government emphasis on alternative energy
US DOE – grants, loans, programs
USDA – grants, loans, programs, Farm Bill
US EPA – LMOP, Green Power Partners Program, CHP Program, emissions requirements resolutions – Clean Air Act, CAIR mercury
FutureGen project dropped
Government facility requirements – lead by example
Production Tax Credits recently extended
PURPA Standards – review and consideration
Smart grid/demand response (DR) emphasis
New administration
Focus on carbon constraints efforts
Potential national RPS 4. Southeastern UpdateFederal Government Impacts
40. 5. Key Contingency Planning Issues/Conclusions General Concerns:
Utilities must evaluate/plan/implement alternative energy options
EE, DSM, DR, RE
Measure/verify results
Learn what works from others ASAP
Market penetration levels – customer responses
Focus on how to price/operate/integrate into utility systems
Estimate/project environmental impacts/ constraints
41. General Concerns:
Evaluate load forecasts under multiple scenarios/ models, including potential economic and environmental impacts
Assure reliability
Measure/verify results
Mandates – DSM programs/building codes/appliance standards
Utility programs versus customer options
Costs
Impacts to customers
Initial program costs
Operational costs
Incentives – customers/utilities 5. Key Contingency Planning Issues/Conclusions
42. General Concerns:
Contingency Planning
Government support/funding of critical research/technologies
Energy storage
Carbon sequestration
Coal gasification/liquification options
Others
What if alternative energy options do not meet expectations?
When will utilities move forward with plans/ implementation of more traditional sources? 5. Key Contingency Planning Issues/Conclusions
43. Electric Utility Basic Mission: Provide reliable, affordable electric services to meet customers’ needs and community requirements
Where/how do alternative energy initiatives fit into the mix?
44. The electric industry – now
Volatile Fuel Costs
Increasing Construction Costs
Alternative Energy Emphasis
Additional issues
Technology Advancements
Global Market Impacts
Climate Change
Key issues
Reliability
Costs/affordability
Technologies/research
Key Change – utilities must help improve management of loads –alternative energy options – EE/DSM/DR/RE 5. Key Contingency Planning Issues/Conclusions