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Kansas' Future in Renewable Energy
Presentation to the Kansas Wind & Renewable Energy Conference
September 24, 2008
Mike EckhartAmerican Council On Renewable Energy (ACORE)www.acore.org
Topics
• ACORE• Renewable Energy in America • Kansas Renewable Energy
– Current status and potential• Wind• Solar• Biomass / biofuels
– Jobs in Kansas• Case Examples:
– Colorado energy plan– Nolan County, Texas: Economic impact
• Policy Perspective
ACORE’s Membership Scope
Washington International Renewable Energy Conference
(WIREC 2008)• 8,600 people from around the world• Ministerial + Global Business Conference• Nest global meeting in India in 2010• Trade Show to RETECH 2009 Las Vegas
Finance ConferenceRenewable Energy Finance Forum–Wall Street
Produced with Euromoney at Waldorf-Astoria Hotel in New York City Next: June 2009
Policy Conference
“Phase II of Renewable Energy in America”Cannon Caucus Room, Washington, DC
Next: December 3-4, 2008
RETECHACORE’s All–Renewables Trade Show in Las Vegas
February 25-27, 2009
Topics
• ACORE• Renewable Energy in America• Kansas Renewable Energy
– Current status and potential• Wind• Solar• Biomass / biofuels
– Jobs in Kansas• Case Examples:
– Colorado energy plan– Nolan County, Texas: Economic impact
• Policy Perspective
Senate Passed
Baucus/Grassley Amendment to HR 6049 • Production Tax Credit (PTC)
– One-year extension wind PTC – Three-years for biomass, geothermal, hydro, LFG, waste-energy
+ marine energy• Investment Tax Credit (ITC)
– Solar: 6-year extension of 30% ITC– Fuel cells: 6-year extension and increase cap to $1,500/kw– New 10% ITC on CHP– Removes limitation on use of ITC by electric utilities
• Personal / Residential– Efficiency / solar 30% ITC extended 6 years– Increase cap from $2,000 to $4,000– Offset AMT
• Clean RE Bonds: $2 billion authorization
The Challenge of Putting RE into Use- Regional Resources, Economics, and Politics -
Resource Potential
SOLAR ENERGY WIND POWER
GEOTHERMAL BIOMASS
Wind Power
0
1000
2000
3000
4000
5000
6000
7000
8000
1990 1995 2000 2005 2010
Sources: AWEA (actual) and ACORE (forecast)
US Wind Power Installations(MW/Year)
Key Issues: Production Tax CreditManufacturing in U.S.Transmission capacity
Solar PVU.S. Solar PV Production
(MW/Year)
Key Issues:Investment Tax CreditManufacturing in U.S.0
50
100
150
200
250
300
350
400
450
500
2000 2002 2004 2006 2008
GridOff-Grid
Concentrating Solar Power
354 MW SEGS
64 MW Solar One
4,000 MW under contract +
40,000 MW Proposed:
Key Issues: • Cost and Economics • Investment Tax Credit• Financing
Geothermal Energy
Geothermal Power:
3,600 MW in operation
3,000 MW coming online
100,000 MW mid-term future
Vision: 500,000 MW potential, displacing coal’s baseload role
Key Issues:• Production Tax Credit• R&D and Tech Transfer
Hydropower
72,000 MW in place
+ 3,000 MW incremental hydro
+ 20,000 MW Small Hydro
+ 90,000 MW New:• Ocean power• Kinetic power
Biomass Energy
Outlook to 2025: Over 100,000 MW of additional potential:
Industrial CHP: 57,000 MW
Wholesale power: 37,000 MW
Solid Waste: 10,000 MW
Key Issues:• Economics • Fuel supply risks
Renewable Portfolio StandardsDSIRE Database – September 2008
State Goal
☼ PA: 18%** by 2020
☼ NJ: 22.5% by 2021
CT: 23% by 2020
MA: 15% by 2020 + 1% annual increase
(Class I Renewables)
WI: requirement varies by utility; 10% by 2015 goal
IA: 105 MW
MN: 25% by 2025(Xcel: 30% by 2020)
TX: 5,880 MW by 2015
☼ AZ: 15% by 2025
CA: 20% by 2010
☼ *NV: 20% by 2015
ME: 30% by 200010% by 2017 - new RE
State RPS
☼ Minimum solar or customer-sited RE requirement* Increased credit for solar or customer-sited RE
**Includes separate tier of non-renewable “alternative” energy resources
HI: 20% by 2020
RI: 16% by 2020
☼ CO: 20% by 2020 (IOUs)
*10% by 2020 (co-ops & large munis)
☼ DC: 11% by 2022
☼ NY: 24% by 2013
MT: 15% by 2015
IL: 25% by 2025
VT: (1) RE meets any increase in retail sales by
2012; (2) 20% by 2017
Solar water heating eligible
*WA: 15% by 2020
☼ MD: 20% by 2022
☼ NH: 23.8% in 2025
OR: 25% by 2025 (large utilities)5% - 10% by 2025 (smaller utilities)
*VA: 12% by 2022
MO: 11% by 2020
☼ *DE: 20% by 2019
☼ NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops)
☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)
ND: 10% by 2015
SD: 10% by 2015
*UT: 20% by 2025
☼ OH: 25%** by 2025
Renewable Portfolio StandardsDSIRE Database – September 2008
State Goal
☼ PA: 18%** by 2020
☼ NJ: 22.5% by 2021
CT: 23% by 2020
MA: 15% by 2020 + 1% annual increase
(Class I Renewables)
WI: requirement varies by utility; 10% by 2015 goal
IA: 105 MW
MN: 25% by 2025(Xcel: 30% by 2020)
TX: 5,880 MW by 2015
☼ AZ: 15% by 2025
CA: 20% by 2010
☼ *NV: 20% by 2015
ME: 30% by 200010% by 2017 - new RE
State RPS
☼ Minimum solar or customer-sited RE requirement* Increased credit for solar or customer-sited RE
**Includes separate tier of non-renewable “alternative” energy resources
HI: 20% by 2020
RI: 16% by 2020
☼ CO: 20% by 2020 (IOUs)
*10% by 2020 (co-ops & large munis)
☼ DC: 11% by 2022
☼ NY: 24% by 2013
MT: 15% by 2015
IL: 25% by 2025
VT: (1) RE meets any increase in retail sales by
2012; (2) 20% by 2017
Solar water heating eligible
*WA: 15% by 2020
☼ MD: 20% by 2022
☼ NH: 23.8% in 2025
OR: 25% by 2025 (large utilities)5% - 10% by 2025 (smaller utilities)
*VA: 12% by 2022
MO: 11% by 2020
☼ *DE: 20% by 2019
☼ NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops)
☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)
ND: 10% by 2015
SD: 10% by 2015
*UT: 20% by 2025
☼ OH: 25%** by 2025
Topics
• ACORE• Renewable Energy in America• Kansas Renewable Energy
– Current status and potential• Wind• Solar• Biomass / biofuels
– Jobs in Kansas• Case Examples:
– Colorado energy plan– Nolan County, Texas: Economic impact
• Policy Perspective
Kansas Energy Mix and Fuel Prices
Coal73.1%
Nuclear20.5%
Kansas relies heavily on coal imported from Wyoming
Prices of all types of fuel have increased since 2001
Payments for coal go out of state, even out of country
Renewables 2.2%
NaturalGas4%
Price of Coal in Kansas, 2001-2007
60
80
100
120
140
160
2001 2002 2003 2004 2005 2006 2007
Year
Ce
nts
pe
r m
illio
n B
tuCoal
Wind Potential: 3rd in the US 120,000 MW
Total State Peak Load:10,000 MW
12x
New Wind Capacity Per Year
0
100
200
300
400
500
600
700
2001 2002 2003 2004 2005 2006 2007 2008
Year
MW In Construction
Installed
1 project112.5 MW
2 projects250 MW
1 project101 MW
5 projects549 MW
Wind DevelopmentKansas Ranked 12th in the U.S.
• Installed Capacity – 465 MW– 4 projects
• Under Construction: – 548.5 MW– 5 projects– 1,013 MW end of 2008
• Constraints:– Transmission line
availability– Uncertain policy
Source: AWEA
State Wind Development vs. Potential
*States in green have RPS
SDMTNENDKSWY
OK
MNIACO
NM
NVIDPANY
OR
Texas
California
WA
IL
0
500
10001500
2000
2500
3000
35004000
4500
5000
0 50000 100000 150000
Potential
Cap
acit
y
Kansas Wind Position
Washington
Oregon
Illinois
New York
Pennsylvania
IdahoNevada
New Mexico
Colorado
IowaMinnesota
OK
WY
NE SD
Montana
KansasND
0
200
400
600
800
1000
1200
1400
0 25000 50000 75000 100000 125000 150000
Potential
Cap
acit
y
*States in green have RPS*TX and CA excluded
Kansas Solar Energy
• Western Kansas:– “Excellent” potential
for photovoltaic power– “Particularly good”
potential for solar thermal-electric
• No major projects underway yetSource: DOE
Kansas Biofuels and Biomass
Biomass
Crop and crop residue biomass: 13.9 million dry tons
Cellulosic biomass: 8.1 million dry tons
Upcoming projects: Biomass cofiring plant under construction in Goodland—owned by Energy Holdings.
Biofuels
11 existing ethanol plants
Total capacity: 527 mgpy
9 ethanol plants in development
Additional capacity: 628.3 mgpy
Abengoa Bioenergy constructing $400 million cellulosic ethanol plant in Hugoton—will produce 30 mgpy of second generation ethanol.
Topics
• ACORE• Renewable Energy in America• Kansas Renewable Energy
– Current status and potential• Wind• Solar• Biomass / biofuels
– Jobs in Kansas• Case Examples:
– Colorado energy plan– Nolan County, Texas: Economic impact
• Policy Perspective
Manufacturing Job Loss
• In oast 6 years, Kansas has lost 10,944 manufacturing jobs– 6% of total manufacturing workforce
• Manufacturing fell from 18% of the total non-farm workforce to 16.6% over that time.
• Manufacturing is important to Kansas
Source: US Department of Labor
Renewable Energy is a Growth Industry
• For every 1000 MW of wind/year, about 3000 manufacturing jobs are created(ref: NREL).
• Attracting renewable energy companies to Kansas will increase the economic base:– Component manufacturers– Systems engineers and installers– RE equipment manufacturers– Support professionals
Wind Component Manufacturing Locations
Wind Component Manufacturing Locations
Wind Component Manufacturing Locations
Topics
• About ACORE• Renewable Energy in America• Kansas Renewable Energy
– Current Status– Potential
• Wind• Solar• Biomass / biofuels
– Jobs in Kansas• Case Examples
– Colorado energy plan– Nolan County, Texas: Economic impact
• Policy Perspective
Colorado Resource PlanGeneration Additions and Retirements 2007-2015
WindWind 800 800
Central SolarCentral Solar 225 225
Customer Solar Customer Solar 29 29
BiomassBiomass 4 4
DSMDSM 360 360
Gas GenerationGas Generation 980 980
Additions Additions 2,3982,398
RetirementsRetirements -340-340
Net Additions 2,054Net Additions 2,054
MW
WindWind SolarSolar DSMDSM
Energy SourcesEnergy Sources
1,084 MW1,084 MW
1,884 MW1,884 MW
17 MW17 MW
271 MW271 MW
147 GWh147 GWh
1,618 GWh1,618 GWh
20072007 20152015
Source: Colorado Public Service Co.
Economic Case Study: Nolan County, Texas
• Current Wind Capacity: 2,500 MW• Future: add 3,000 MW by 2009• More wind capacity than California• 1,124 direct jobs in Nolan County
– 20% of the county’s workforce.– Permanent O&M jobs make up 29% of
direct jobs
• 2008 economic impact in Nolan County: $315 million/year
Source: “Nolan County: Case Study of Wind Energy Economic Impacts in Texas.” Prepared by New Amsterdam Wind Source LLC.
Nolan County, TexasSince the Wind Boom Began:
Unemployment Rate in Nolan County, Texas(2003-2006)
4
4.5
5
5.5
6
6.5
2003 2004 2005 2006
Real Wages are UP by 9%Unemployment is DOWN6.1% - 4.8% since 2003
Average Weekly Wages in Nolan County, 2003-2005
460
480
500
520
540
2003 2004 2005 2006
Year
Ave
rag
e W
eekl
y W
ages
($)
Property Taxes
Property Tax Rate for Nolan County, Texas
2.5
2.55
2.6
2.65
2.7
2.75
2.8
2.85
2001/2002 2003/2004 2005/2006 2006/2007
Year
Ta
x R
ate
Property Tax Base in Nolan County, 1999-2010
00.5
11.5
22.5
33.5
4
1999 2007 2008 2010
Year
Pro
per
ty T
ax B
ase
(Bil
lio
ns
of
$)
Nolan County has expanded services, while lowering residential tax rates.
Lower tax rates mean more disposable income for residents.
Tax base has increased 5x since 1999
Projected to continue growing to 7x.
Land-Lease Payments to Nolan County Farmers
Year Wind Capacity Payments to Farmers
2008 2500 MW $12.6 million/yr
+2009 3600 MW $17.7 million/yr
By end of 2009 6100 MW $30.3 million/yr
T. Boone Pickens
Topics
• About ACORE• Renewable Energy in America• Kansas Renewable Energy
– Current Status– Potential
• Wind• Solar• Biomass / biofuels
– Jobs in Kansas• Case Examples
– Colorado energy plan– Nolan County, Texas: Economic impact
• State Policy Perspective
Additional Policy Benefits of Renewable Energy
• Energy Supply– Coal Money goes out of Kansas to Omaha and London– Wind, Solar and Biomass can be Kansas-growth energy sources
• State response to Climate Change– Regional and state-level innovation today– Preparing for longer-term reduction of GHG emissions
• Environment:– Reduced emissions of all pollutants associated with power generation– Reduced water consumption
• Health Benefits– Lower smog, soot, acid rain, and toxic air emissions. – Lower rates of asthma, respiratory illness in children, cardiovascular
failure, and chronic bronchitis (ref: EPA)
Policies to Promote Renewables
• Current Kansas renewable energy policies:– Property Tax Exemption– Solar Easements– Interest-free loans and utility
rebates• Future legislation under
consideration:– Renewable Portfolio Standard– Financial incentives– Transmission line development
• ACORE recommends:– Economic development incentives– Continuing to protect the
environment and important view shed
Closing Thoughts
• Kansas has excellent renewable energy resources:– #3 state in wind potential: 12x state peak load– Very good opportunities on solar energy– Substantial opportunities in biomass power
• Kansas can begin to receive economic benefits:– Investment in new manufacturing facilities– Construction, operations and maintenance jobs– Increased land lease payments to Kansas farmers– Increased property taxes to local governments– Higher average wages and disposable income– Lower unemployment.
• ACORE urges Kansas to continue its commitment to renewable energy, and we stand ready to help.
Reference Slides
Technology Comparison
Coal Wind Solar
Existing 5500 MW 465 MW -
Construction - 549 MW -
Proposed 1400 MW ? ?
Price/kWh 2-5 cents 2-5 cents 10-20 cents
Capacity Factor
70-90% 30-40% 15-25%
Total State Load: 10,000 MWDemand growing at 1.5% per year
Existing Wind ProjectsElk River Wind Farm
Gray County Wind Farm
Spearville Wind Energy Facility
Smoky Hills Wind Farm
Capacity 150 MW 112.5 MW 100.5 MW 101 MW
# of Turbines 100 170 67 56
Project Location
Butler County Gray County Ford County Lincoln County
Total Acres 20,000 12,000 5,000 12,000
% of Land Affected
2% .05% 1.3% 1-2%
Utility Empire District Electric (MO)
Aquila KCP&L Kansas City Board of Public Utilities
Owner PPM Energy FPL Energy enXco TradeWind Energy
Turbine Supplier
GE Energy Vestas GE Energy Vestas
Price of Wind
Wind and Wholesale Power Prices by Region: 1998-2007 Projects
Price of Wind Power Competitive at a National Scale 2003 to 2007
Average Cumulative Price of Wind and Wholesale Power Prices over Time
This is IllustrativeMust model this on a Portfolio-specific basis
Kansas Renewable Resources:Biomass
