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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
2012
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 [email protected]
All information on the WECC 10-Year Regional Transmission Plan may be found at http://www.wecc.biz/10yrPlan.
