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Renewables & Natural Gas: Market Driver Strategy for U.S. Energy Independence

Explore the confluence and conflict between renewables and natural gas in Texas energy. Learn about ACORE's mission and strategic plan for successful integration of renewable energy in the U.S. Discover the market and policy drivers shaping the future of energy generation, including the impact of renewables and natural gas on market dynamics. Gain insights into collaborative approaches and policy implications for building on the strengths of both energy sources. Find out about upcoming initiatives and the phased-in approach for enhancing energy security, climate resilience, and economic growth.

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Renewables & Natural Gas: Market Driver Strategy for U.S. Energy Independence

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  1. Texas Energy Independence Week“Renewables & Natural Gas: Confluence, Conflict, or Something In Between?”February 23, 2011Todd FoleySenior Vice President, PolicyAmerican Council On Renewable Energy (ACORE)www.acore.org

  2. ACORE’s 600+Organizational Members Strategy to Assemble All the Players Necessary to Make Renewable Energy Successful in the U.S.

  3. ACORE’sMission & Strategy 501(c)(3) tax-exempt research & education nonprofit organization: “…bring renewable energy into the mainstream of our economy and lifestyle” “…be for renewable energy & against nothing” ACORE encompasses all renewable & inexhaustible energy options: - Solar energy - Biomass energy & fuels - Wind power - Geothermal energy - Hydropower & ocean - Waste-to-energy …in all forms of energy: - Electricity - End-use thermal energy - Fuels - Hydrogen …while focusing on three strategic themes & three major activities: - Markets - Research & publishing - Finance - Convening & education - Policy - Communications

  4. A Strategic Plan to Make Renewable Energy Successful in the U.S. Three Goals to Be Achieved National Security Climate & Environment Growth & Jobs Three Means by Which to Achieve Them Policy Finance Education

  5. Renewables/Natural Gas Market &Policy Drivers Market Policy EPA MACT Rules – coal plant retirements Offset by new renewables, efficiency & gas As much as 40% of existing fleet by 2020 National RES/CES: 80% CES by 2035 (President Obama) Partial credit for gas State RPS FERC RenewablesIntegration Incentives • Cost Reduction • Technology Improvements • Market Growth: • Wind • 20% growth in 2009 (10 GWs) • 39% of all new generation • Solar • 96% growth in 2010 (~850 MWs) • New Technologies: • Smart grid • Storage • information

  6. Market Driver: Impressive Cost ReductionU.S. Electricity Generation & Retail Cost by Energy Source, 1930 – 2010

  7. Renewables/Natural Gas: Building on Strengths Natural Gas Renewables • Reliable 24/7 • Ramps up/down quickly • Robust delivery infrastructure • Can bid into day-ahead electric markets • No emissions, not even carbon • Domestic resource • Dispatches near zero price, little volatility Strengths • Price volatility • Vulnerable to economic dispatch • Emits some NOX, carbon • “Dash to Gas” fear among customers • Intermittent/Variable • Immature Delivery Infrastructure • Difficult to bid into day-ahead electric market Weaknesses 7 7

  8. Scope of Collaboration: Explore Issues to Build on Strengths • Joint bidding – single unit bid (allows renewables to compete in day-ahead, dispatchable market) • FERC market-pricing rules • RTO dispatch rules- change “one unit, one bid” rule so separate gas &renewable units can bid as single unit • Reliability obligations • Market impacts: Day-ahead vs. regulated. How will combined bid work in varying markets? • Effect of emerging smart-grid & other technologies • Issues around locational differences & those co-located; • Policy & process issues

  9. Phased-in Approach Seek Feedback: RTOs, Utilities, PUCs Generators Announcement at ACORE annual meeting Form steering committee; Develop plan Series of meetings FERC, industry (webinar, workshops) Next Steps? November/December 2010 December 2010 January – April 2011 2Q– 4Q 2011 #

  10. Thank you!www.acore.org

  11. Market Driver: Increasingly Cost Competitive U.S. Levelized Cost of Wholesale & Retail Energy, 2010 Sources: “Levelized Cost of Energy Analysis – Version 4.0”, Lazard, June 2010; Hudson Clean Energy Partners estimates Notes: Solar PV assumes conventional silicon modules; gas assumes $4/MMBtu; retail energy for gas and coal incorporate a $53/MWh cost of transmission and distribution

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