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RENEWABLE PORTFOLIO STANDARD (RPS) – IMPLICATIONS FOR TVA. Daryl Williams June 8,2007. Outline. State and Federal RPS Outlook TVA Renewables 2% RPS Scenario 15% RPS Impact Analysis Key Takeaways. Proposed Federal RPS Legislation. State Renewable Portfolio Standards. MN: 25% by 2025;

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outline
Outline
  • State and Federal RPS Outlook
  • TVA Renewables
  • 2% RPS Scenario
  • 15% RPS Impact Analysis
  • Key Takeaways
state renewable portfolio standards
State Renewable Portfolio Standards

MN: 25% by 2025;

(Xcel: 30% by 2020)

VT: RE meets load growth by 2012

ME: 30% by 2000;

10% by 2017 goal - new RE

*WA: 15% by 2020

WI: requirement varies by utility; 10% by 2015 Goal

MT: 15% by 2015

MA: 4% by 2009 +

1% annual increase

RI: 15% by 2020

CT: 10% by 2010

IA: 105 MW

CA: 20% by 2010

  • NY: 24% by 2013
  • NJ: 22.5% by 2021

IL: 8% by 2013

  • NV: 20% by 2015
  • CO: 10% by 2015
  • PA: 18%¹ by 2020

*MD: 7.5% by 2019

*NM: 20% by 2020 (IOUs)

10% by 2020 (Co-ops)

  • AZ: 15% by 2025

*DE: 10% by 2019

  • DC: 11% by 2022

TX: 5,880 MW by 2015

HI: 20% by 2020

State RPS

State Goal

  • Minimum solar or customer-sited requirement

* Increased credit for solar or customer-sited

  • ¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resource

Solar water heating (SWH) eligible

IREC Interstate Renewable Energy Council March 2007

tva existing renewables
TVA Existing Renewables
  • Non-hydro renewables made up 0.04% of TVA generation in 2006
  • Current Drivers:
    • Green Power Switch® growth
    • Federal Renewables Purchase Requirement, EPACT 2005
renewable resource potential
Renewable Resource Potential

4,572,545 MWh would be barely enough to meet just the first year of RPS

2 renewable scenario
2% Renewable Scenario

2% non-hydro renewables is a challenge in the Southeast

  • It would take the following renewable energy footprints per technology to equal approximately 2% of TVA’s generation
    • Solar: 13 million solar panels on 600,000 roof-tops; this is 25% of all the homes in Tennessee
    • Wind: 519 wind turbines placed on 100 miles of ridgeline; 519 wind turbines lined up from Knoxville to Chattanooga
    • Biomass: 10 biomass-fired plants and about 900 square miles for growing energy crops; the combined land areas of Hamilton and Bradley counties in Tennessee
15 bingaman rps case
15% Bingaman RPS Case
  • Federal RPS, 15% by 2020
  • Graduated at 3.75% (2010), 7.5% (2013), 11.25% (2017),

15% (2020)

  • Applies to all utilities that sell 4,000,000 MWh or more per year
  • RECs - $.02/kWh
  • Penalty – the greater of $.02/kWh or 200% of average market value of RECs
  • Includes incremental hydro in service after January 1, 2001
rps based on actual energy generated
RPS Based on Actual Energy Generated

Capacity factor: The ratio of the electrical energy produced by a generating unit for the period of time considered to the electrical energy that could have been produced at continuous full power operation during the same period.

economic dispatch of generation resources
Economic Dispatch of Generation Resources

TVA operates its generating units to minimize power cost to the consumer, bringing generation on line as needed, and beginning with generating units with the lowest production costs. As demand increases, the next more costly unit is brought online until demand is met.

ECONOMIC DISPATCH ORDER

rps impact
RPS Impact
  • The Bingaman RPS applies to retail electric suppliers which sell more than 4 million MWhs each year.
  • TVA is a retail electric supplier for its 62 directly served customers. So the direct serve load is subject to the RPS.
  • Each individual power distributor is a retail electric supplier. However, only those which sell more than 4 million MWhs at retail each year would be subject to the Bingaman RPS. Under full requirements contracts with the power distributors, TVA would have to provide the renewable resources necessary to comply with the RPS.
  • TVA’s six largest distributors would be subject to the Bingaman RPS. Several more would "grow" into becoming subject over the period between 2010 and 2030.
  • TVA’s direct serve load + load of the largest distributors would be subject to the RPS.
what tva would like to see in rps
What TVA would like to see in RPS
  • Exemption
  • Conventional hydro as a qualified renewable resource  
  • Prior years incremental hydro
  • Credit for existing Green Power Switch®
compliance options
Compliance Options

Must determine the lowest cost option

  • Existing renewables: HMOD, biomass cofiring, landfill gas
  • Build new renewable assets
  • Purchase renewable energy (PPAs)
  • Purchase renewable energy credits (RECs)
  • Alternative Compliance Payments
key takeaway
Key Takeaway
  • TVA is planning for RPS
  • Substantial Financial impact
  • Most favorable treatment – exemption; credit for existing Green Power Switch® program
  • Competition for resources will drive prices

Recommended path-forward

  • Develop strategy
  • Update detailed impact analysis
  • Evaluate unsolicited proposals
  • Monitor REC, green tag markets
  • New technologies
incremental hydro hmod capacity
Incremental Hydro – HMOD Capacity

622

620

597

Existing HMOD Capacity

Planned HMOD Capacity

Annual Incremental Increase

561

541

521

508

486

469

463

455

444

358

MW

317

272

257

222

204

97

39

renewable energy certificates recs
Renewable Energy Certificates (RECs)

What will the price be under RPS? $1 – $50 MWh?

Green tags

Renewable Energy Certificate

although renewable energy presents certain benefits there are limitations
Although renewable energy presents certain benefits, there are limitations.
  • Comparing a 1000 MW nuclear unit to:
    • Solar: It would require 1.3 million roof tops, 31 million solar panels
    • Wind: 1,500 2.5 MW wind turbines placed on 200 miles of ridgelines
    • Biomass: 25 individual 50 MW plants, and 2,100 square miles for growing and harvesting energy crops such as switchgrass
  • Low cost demand-side management opportunities have the potential to reduce energy consumption and offset system peak resources.
the role of renewables in u s electricity generation
The Role of Renewables in U. S. Electricity Generation

Non-Hydro renewables make up just 1.6% of generation

3.0%

renewables increase by 2030 under advanced technology target scenario
Renewables Increase by 2030 Under Advanced Technology Target Scenario

Non-Hydro renewables could increase with investments, incentives

solar equivalent of 2 of tva generation
Solar Equivalent of 2% of TVA Generation

VA

IL

KY

MO

NC

TN

AR

SC

GA

AL

MS

600,000 House Units

TVA Power Service Area

600,000 Houses

wind equivalent of 2 of tva generation
Wind Equivalent of 2% of TVA Generation

LETCHER

CLAY

LESLIE

LAUREL

KNOX

HARLAN

LEE

BELL

100 Ridgetop Miles; 519 Turbines

WHITLEY

Virginia

Tennessee

MCCREARY

Kentucky

HANCOCK

Tennessee

HAWKINS

CLAIBORNE

CAMPBELL

SCOTT

GRAINGER

UNION

GREENE

HAMBLEN

JEFFERSON

Wind Turbines

ANDERSON

KNOX

COOKE

MORGAN

biomass equivalent of 2 of tva generation
Biomass Equivalent of 2% of TVA Generation

IL

VA

KY

MO

NC

TN

AR

SC

AL

GA

MS

Biomass Plants

Biomass Plant Supply Radius

TVA Power Service Area

562,354 Acres

of Switchgrass

10 Biomass Plants

incremental hydro prior years capacity
Incremental Hydro – Prior Years Capacity

RPS with prior years incremental hydro would help!

RPS enactment year

Eligible HMOD capacity assuming inclusion of incremental hydro back to 1999

biomass resources
Biomass Resources

This study estimates the technical biomass resources currently available in the United States by county. It includes the following feedstock categories:

  • Agricultural residues (crops and animal manure)
  • Wood residues (forest, primary mill, secondary mill, and urban wood)
  • Municipal discards (methane emissions from landfills and domestic wastewater treatment)
  • Dedicated energy crops (on Conservation Reserve Program and Abandoned Mine Lands)

* 1 Tonne = 2,204 pounds

Compared to the rest of the nation, the Southeast has limited renewable energy resources. Of all the renewables, biomass has the greatest potential in the Southeast.

*

solar resources
Solar Resources

Solar energy resources are limited in the Southeast compared to other parts of the country.

wind resources
Wind Resources

0

100

150

200

250

300

400

1000

0

4.4 (9.8)

5.1 (11.5)

5.6 (12.5)

6.0 (13.4)

6.4 (14.3)

7.0 (15.7)

9.4 (21.1)

0

200

300

400

500

600

800

2000

0

5.6 (12.5)

6.4 (14.3)

7.0 (15.7)

7.5 (16.8)

8.0 (17.9)

8.8 (19.7)

11.9 (26.6)

Classes of Wind Power Density

10 m (33 ft)

50 m (164 ft)

Wind

Power

Class

Wind Power

Density

(W/m2)

Speed

m/s

(mph)

Wind Power

Density

(W/m2)

Speed

m/s

(mph)

Wind energy is very limited in the Southeast. A very small amount of moderate wind resources exist in East Tennessee.

regional wind resources
Regional Wind Resources

Wind Resource at 65 m

Mean Speed

mph

m/s

Quality

< 12.3

12.3 – 13.4

13.4 – 14.5

14.5 – 15.7

15.7 – 16.8

16.8 – 17.9

17.9 – 19.0

19.0 – 20.1

20.1 – 21.3

> 21.3

< 5.5

5.5 – 6.0

6.0 – 6.5

6.5 – 7.0

7.0 – 7.5

7.5 – 8.0

8.0 – 8.5

8.5 – 9.0

9.0 – 9.5

> 9.5

Poor

Poor

Fair

Fair

Good

Good

Very Good

Very Good

Excellent

Excellent

Black Mountains

Buffalo Mountain

Appalachian Mountains

Lookout Mountain

Wind resources are very limited in the region. Buffalo Mountain was selected for TVA wind because of its good resources, but also because of stakeholder opposition at the other potential sites.

Estimated Regional Capacity 300 MW