1 Bradley Nickell Director of Transmission Planning Connecting Policy and Wind Energy Investment...

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Bradley NickellDirector of Transmission Planning

Connecting Policy and Wind Energy Investment

Iowa State University WESEP-REUJune 12, 2012

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About WECC

Non-Planning Functions

• Compliance Monitoring and Enforcement

• Standards Development• Reliability Coordination• Market-Operations

interface• Operator training• WREGIS

Planning Functions

• Loads and Resources Assessments

• Reliability studies• Transmission Expansion

Planning

WECC’s mission is to promote and foster a reliable and efficient bulk electric system

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Regional Transmission Expansion Planning (RTEP)

• Completed WECC’s first 10-Year Regional Transmission Plan

• In the 2nd year of the biennial planning cycle• Preparing for the creation of Interconnection-wide

transmission plans in 2013

Regional Transmission Expansion Planning Where are we today?

Understanding Impacts of decisions, not making determinations on what should be done

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• What’s driving the policy?

• Cost and Risk

• About Policies

• Parting thoughts – The long KISS

The Breeze Behind Wind Energy How Policy Impacts Investment Decisions

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• Environmental concernso Emissionso Land use

• Job creationoManufacturing and construction

• Public sentiment

• Money

What Drives Energy Policy?

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• Cost – Pricing the knowno Equipment, financing

• Risk – Pricing the unknowno Future cashflows, O&M, competition o Time - changes in costs/policies between

investment decision and on-line dates

• Policy impacts botho Equipment demando Future tax treatment“Cost is cheap, Risk is expensive”

Cost and RiskMonetizing the Future Today

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• Create marketsoRenewable Portfolio Standards (RPS)

• Reduce costsoCredits/loans/rebates

• Increase costs for alternativeso Emission limitations/costs

• Impact risk (real and perceived)

Renewable Energy Policies

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• Requires renewable energy procuremento Vary in complexityoDriven by multiple goalsoDirected at some/all retail load-serving entities

• AttributesoCost caps/off-rampso Technology/ownership set-asidesoGeography restrictions/incentives

Renewable Portfolio Standards (RPS)Creating the Market

RPS Policies

Renewable portfolio standard

Renewable portfolio goal

www.dsireusa.org / May 2012

Solar water heating eligible *† Extra credit for solar or customer-sited renewables

Includes non-renewable alternative resources

WA: 15% x 2020*

CA: 33% x 2020

NV: 25% x 2025*

AZ: 15% x 2025

NM: 20% x 2020 (IOUs) 10% x 2020 (co-ops)

HI: 40% x 2030

Minimum solar or customer-sited requirement

TX: 5,880 MW x 2015

UT: 20% by 2025*

CO: 30% by 2020 (IOUs)10% by 2020 (co-ops & large

munis)*

MT: 15% x 2015

ND: 10% x 2015

SD: 10% x 2015

IA: 105 MW

MN: 25% x 2025(Xcel: 30% x 2020)

MO: 15% x 2021

WI: Varies by utility;

~10% x 2015 statewide

MI: 10% & 1,100 MW x 2015*

OH: 25% x 2025†

ME: 30% x 2000New RE: 10% x 2017

NH: 23.8% x 2025

MA: 22.1% x 2020 New RE: 15% x 2020

(+1% annually thereafter)

RI: 16% x 2020

CT: 27% x 2020NY: 29% x 2015

NJ: 20.38% RE x 2021+ 5,316 GWh solar x

2026

PA: ~18% x 2021†

MD: 20% x 2022

DE: 25% x 2026*

DC: 20% x 2020

NC: 12.5% x 2021 (IOUs)10% x 2018 (co-ops & munis)

VT: (1) RE meets any increase in retail sales x

2012; (2) 20% RE & CHP x 2017

KS: 20% x 2020

OR: 25% x 2025 (large utilities)*

5% - 10% x 2025 (smaller utilities)

IL: 25% x 2025

29 states + DC and PR have an RPS

(8 states have goals)

29 states + DC and PR have an RPS

(8 states have goals)

OK: 15% x 2015

PR: 20% x 2035

WV: 25% x 2025*†VA: 15% x 2025*

DC

IN: 10% x 2025†

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• Tax Creditso Federal – PTC/ITCo State

• Loanso Guaranteeso Reduced rates

• Direct paymentso Grantso Rebates

Financial IncentivesReducing the Cost

Tax Credits for Renewableswww.dsireusa.org / March 2012

Corporate tax credit(s) only

Personal + corporate tax credit(s) Notes: This map does not include corporate or personal tax deductions or exemptions; or tax incentives for geothermal heat pumps.

Personal tax credit(s) onlyPuerto Rico

DC

24 states offer tax

credits for renewables

24 states offer tax

credits for renewables

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• 10-year – understanding impacts of near-term decisions (bottoms-up)

• 20-year – understanding drivers of potential energy futures (top-down)

• The Plans tell the story of how they are connected

2013 10- and 20-year Transmission PlansConnecting the Dots

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2022

2032

How might the Western Interconnection need to change to accommodate changes in the supply and demand for electric energy?

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Parting ThoughtsThe Long KISS

• Long-term policies reduce risko Stabilize demando Assure incentives

• Simple policies reduce costo Allow for market-based, least-cost solutionso Foster creativity

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Questions

Bradley NickellDirector of Transmission PlanningWestern Electricity Coordinating Council155 North 400 WestSalt Lake City, Utah 84103801.819.7604bnickell@wecc.biz

All information on the WECC 10-Year Regional Transmission Plan may be found at http://www.wecc.biz/10yrPlan.