Energy_Bill_Incentives_Overview - Luis Bernal

8/8/2019 Energy_Bill_Incentives_Overview - Luis Bernal

http://slidepdf.com/reader/full/energybillincentivesoverview-luis-bernal 1/18

ING. ALEXIS J. MIRANDA RAMIREZ

Associate Director

ENERGY AFFAIRS ADMINISTRATION

Government of Puerto Rico



Agenda



Agenda

Energy Bill – Renewable Portfolio Standard

– Renewable Energy Certificates

– Green Energy Fund

Law #73 – Wheeling



Agenda



Energy Bill

• Act # 82 July 19th, 2010 – Also known as“Renewable Portfolio Standard (RPS)”

• Enforce the generation of electricity from renewable energysources, hence promotes diversification of the energy mixand reduction of dependency on fossil fuels.

• Establishes minimum targets for of renewable energygeneration in P.R.

• Implement a Renewable Energy Credits (RECs) system

Year(s) Target

(% Renewable Energy Production)

2015 12%2020 15%

2035 20%





Renewable Energy Portfolio (RPS)

– The Renewable Energy Portfolio (or Renewable Portfolio Standard-RPF) is a legal energy

policy that requires an increment in renewable energy production through the use ofwind, solar, biomass and geothermic among others

– This diversification will reduce Puerto Rico’s oil dependency

• Diversification Helps reduce and stabilize electricity prices

– 29 states and the District of Columbia have implemented an RPS

• Diversification is the Key to Reduce Energy Price

4



Agenda



Green Energy

As defined by the Energy Bill, Green

Energy is: – Alternate Renewable Energy

• Energy from Waste (MSW)

• Landfill gas combustion

•

Anaerobic digestion• Any other source as defined by EAA

– Sustainable Renewable Energy

• Solar- Photovoltaic and/or Solar-Thermal

•

Wind• Geothermal and Ocean Energy

• Renewable biomass combustion, combustion of renewablebiomass gas or combustion of biofuels

• Qualified Hydropower



Agenda



Green Energy

• Renewable Biomass

– Organic or organisms biological byproducts with a power generation potential.

• Wood feedstock

• Natural biomass

• Alcohol byproducts

• Residual biomass- generated from agricultural

activities





Renewable Energy Credits

– Puerto Rico will adopt a Renewable Energy Credit system

– REC – a certificate considered as an instrument with economic valuethat can be bought, sold or transferred between persons and thatrepresents the equivalent of one (1) MWh of electricity generatedfrom a renewable energy or alternate renewable energy source

• Creation of Renewable Energy Credits (RECs)

77

ConventionalGeneration

Renewable EnergyGeneration

ElectricityElectricity

1 Product 2 Products

REC





Renewable Energy Certificates

– RECs will be registered in the North American Renewable Registry. This will

facilitate the marketability of RECs – RECs could be marketable either on compliance or voluntary markets.

– RECs have their own economic value and they are marketable in the UnitedStates. Entities required to comply with an RPS from the other 29+ states or companies with corporate social responsibility could buy PR’s RECs.

• Production Incentives based on RECs

8

Renewable

EnergyGeneration

Data isprocessed

andvalidated

Anelectronic

REC iscreated

Productiondata is sent

to the registry

The REC isdeposited

on theproducersaccount

1 2 3 4 5



Agenda



Energy Bill

• Act #83 July 19th, 2010 0 Also known as “GreenEnergy Fund”

• All financial incentives will be granted by a special fundcalled Green Energy Fund, an investment fund for futuregenerations

• Will promote and develop a new and robust green industry,and create thousand of green jobs.

• $290 Millons within the next 10 years

• Green Energy Fund will apart from the General Fund.





Green Energy Fund

10

– Starting as on FY 2011-2012, funds will be collected from motor vehicles tax consistent with Sec. 2011 of the Internal Revenue Code

of PR.

– These funds will be received by the Dept. of Treasury (DT) and usedfor the purposes described in this Act, as it follows:

• Green Energy Fund (GEF) Creation

Fiscal Year Funds

2011-2012 $20,000,000

2012-2013 $20,000,000

2013-2014 $25,000,000

2014-2015 $30,000,000

2015-2016 $35,000,000

2016-2020 $40,000,000





Green Energy Fund

11

– Any business dedicated to the production or selling of green energyat a commercial scale for its consumption within PR. (Owner and/Operator are both considered as business dedicated to eligibleactivities)

– Green Energy Producer, as per definition provided in Art. 1.4

– Green Energy Generation Equipment Assembly, including installationof equipment in user’s facilities for Green Energy Production.

– Property dedicated to the production of green energy.

• Eligible Activities





Green Energy Fund

Rebate Programs for Green Energy Investment (Art. 2.8)

12

Utility Scale

• Considerably reduces oil dependency, creates an economic stimulus and green jobs are created

• Project size: 1 MW+

• Market: Independent Power Producer • Incentive: Access to the RECs market

Medium Scale

• Establishes a dynamic market that will attract new investments in the

manufacturing of renewable energy equipments• Project size:100 kW + —1 MW• Market: Industrial and Commercial• Incentive: Up to 50% in reimbursements (GEF)

Small Scale

• Allow individuals and small companies have more control over energy prices thus

reducing expenses and increasing available incomes• Project size: 0 — 100 kW

• Market: Residential & Small Businesses• Incentive: Up to 60% in reimbursements (GEF)

Tier 3

Tier 1

Tier 2





Green Energy Fund

– Furthermore, the Energy Bill creates a special tax exemption for companies with

the primary purpose of renewable energy generation. – These companies will have the advantage similar to those in Act 73 of 2008:

1. A fixed tax of 4%

2. A reduction on the property and municipal tax

–

In addition, the lifespam of the decrees will be of 25 years which is consistent withthe expected life of a renewable energy equipment and their commercialagreements (e.g. PPAs)

• Tax Exemption

13

Life of equipment:

25 years

Tax Decree: 25

years





Green Energy Fund

14

– Would be considered as capital gains for taxing purposes but wouldnot be considered as capital asset.

– Acquired RECs would not pay municipal taxes

– Would have a value for 2 years upon issuance.

• Renewable Energy Certificates



Agenda



Wheeling – Implied Cost per

kWh

** Schedule 10 (Backup & Supplemental

Service) still not considered in price** TBD



Agenda



Wheeling – Implied Cost per

kWh

** Schedule 10 (Backup & Supplemental

Service) still not considered in price** TBD





Agenda



Information Resources

• We invite you to visit the following

website for more info: – http://www.aae.gobierno.pr/

• For acquiring the new laws please visit:

– http://www.oslpr.org/buscar/

Contact Info:

– [email protected] .gov• Luis Bernal-Jimenez, Esq. – Executive Director

Documents

Energy_Bill_Incentives_Overview - Luis Bernal