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Overview of Renewable Development on a Global Scale

Who, How and How Much?

Ziad Alaywan P.E.

Green Energy

Topics

• Background on the Western and California Grid• Summary of activities since the 2000/2001 California Energy Crisis• Locations of Green Power• Summary of Green Energy progress by State• Comparison of the advances in Green Policies between the US and

other countries• Who are the players• ZGlobal offerings

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North American Electric Reliability Council (NERC)

NERC is composed of the following regions:

WECC – Western Electricity Coordinating CouncilERCOT – Electric Reliability Council of TexasMRO – Midwest Reliability OrganizationSPP – Southwest Power PoolSERC – Southern Electric Reliability CouncilFRCC – Florida Reliability Coordinating CouncilRFC – Reliability First CorporationNPCC – Northeast Power Coordinating Council

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• Western Electricity Coordinating Council (WECC) – (formerly WSCC) was formed in 1967 by 40 electric power systems

• 1.8 million square miles• 14 Western States, two Canadian Provinces, and Baja Norte, Mexico

They support the following:– Coordination and promotion of electric system reliability– Efficient competitive power markets– Assure open and non-discriminatory transmission access amongst

members– Provide a forum for resolving transmission access disputes

– Providing an environment for coordinating the operating and planning activities of its members

– California represents 1/3 of the demand for electricity in the west

Background on the Western & California Grid

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1. A boom in building generation in California: over 10,000 MW of new Combined-Cycle plants.

2. A boom in old generation retirements in California: over 7000 MW.3. Healthy transmission infrastructure incentives, taking advantage of

FERC’s ROR of up to 15% (However: Transmission development is hampered by environmental, jurisdictional and cross-state politics)

4. New, very aggressive state renewable policies (20% by 2010 and 33% by 2020).

5. Federal Energy Policy Act of 2005 – Mandatory Reliability Standards.6. FERC 2007 Order 890 Ruling – Regional Planning Process.

What Happened Since the 2000/2001 Energy Crisis?

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A picture is worth a thousand words!

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Source: CEC RETI report by Black & Veatch, March 2008

Renewable Locations Across the States

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http://www.westgov.org/wga/initiatives/wrez/brief5-28/Barbose.pdf

Comparison Among States

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United States Wind Power Ranking: Top 20 States

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International Rankings of Wind Power Capacity • On a worldwide basis, roughly 20,000 MW of wind capacity was added in 2007, the highest

volume achieved in a single year, and up from about 15,000 MW in 2006, bringing in the cumulative total to approx. 94,000 MW.

• For the third straight year, the U.S. led the world in wind capacity additions, capturing roughly 27% of the worldwide market, up from 16% in 2006. China, Spain, Germany and India rounded out the top five countries in 2007 for annual wind capacity additions.

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Regulatory Mandates and Goals

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A. Twenty-one states and the District of Columbia have adopted mandatory renewable portfolio standards (RPS) over the last ten years.

B. Renewable Energy Attributes – such as the energy source, conversion technology, plant location and vintage, and emissions – are usually required to verify compliance with these policies, sometimes through attributes bundled with electricity, and sometimes with the attributes unbundled from electricity and traded separately as renewable energy credits (REC’s).

Incentives include:

1. Federal Production Tax Credit (PTC) and Investment Tax Credit (ITC).

2. Federal Accelerated Depreciation and Substance State-Wide Incentives.

Renewable Incentives

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Renewable Incentives

1. As you are all very much aware, the U.S. Congress has a long history of providing tax incentives for energy development, including renewable electricity. The PTC was established by the Energy Policy Act of 1992 to stimulate use of renewable technologies for power production. At the present time, the PTC provides a 10 year credit of 1.9¢/kWh (adjusted upwards, in future years, for inflation) for wind.

2. Presumably, the PTC reduces the cost of wind power by roughly one-third (~2¢/kWh), thereby making wind more attractive to electric utilities and other investors.

3. Greater Reliance on Foreign Manufacturing: Uncertainty in the future scale of the U.S. wind power market has limited the interest of both U.S. and foreign firms in investing in wind turbine and component manufacturing infrastructure in the U.S. Instead, the U.S. remains reliant, to a significant degree, on wind turbines and components manufactured in Europe and, in the future, perhaps China and elsewhere, thereby reducing opportunities to grow the domestic manufacturing sector.

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More than 7,000 MW of Contracts with New Renewable Generators Signed in California Since 2002

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U.S. Wind Power Capacity Surged by 46% in 2007, with 5,329 MW Added and $9 Billion Invested

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Location of Installed Wind Generation*

*(Source:AWEA)

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Cost of Renewable is Approaching Competitive Levels!

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Relative Contribution of Generation Types to Annual Capacity Additions

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A. Private Independent Power Producers (IPPs) continued to dominate the wind industry through 2007, owning 83% of all new capacity. In a continuation of the trend begun several years ago, however, 16% of total wind additions made in 2007 are owned by local electrical utilities, split between investor-owned utilities (IOUs) and publicly owned utilities (POUs) roughly 2-1.

B. Of the cumulative 16,904 MW of installed wind capacity at the end of 2007, IPPs owned 84% (14,280 MW) with utilities contributing 14% (1,7980 MW for IOUs and 526 MW for POUs) and community ownership just 2% (308 MW).

Types of Companies Investing in Renewables

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Acquisition and Investment Activity Among Wind Developers

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• At least 11 significant transactions involving roughly 37,000 MW of in-development wind projects (also called the development “pipeline”) were announced in 2007.

• In 2005, 8 transactions totaling nearly 12,000 MW were announced, while only 4 transactions totaling less than 4,000 MW were completed from 2002-2004.

• A number of large companies have entered the U.S. wind development business in recent years, some through acquisitions, and others through their own development activity or through joint development agreements with others. Particularly striking in recent years has been the entrance of large European energy companies into the U.S. market.

• The two largest developer acquisitions in 2007, for example, were the purchase of Horizon Wind by Energias de Portugal (from Portugal) and the acquisition of Airtricity North America by E.ON AG (from Germany), summing to nearly $4 billion in aggregate.

Summary

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1. Enfinity: is a Belgium-based company developing and financing renewable energy projects, with an emphasis on Solar projects.  enfinity has joined with SunPower for development of solar project throughout Europe.  SunPower has completed solar power plants projects in Asia, North America and Europe, including more than 55 MW completed or in construction in Spain.  

2. Horizon Wind Energy: Following its acquisition on July 2, 2007 by Energias de Portugal, S.A. (“EDP”), a major Portuguese utility headquartered in Lisbon, Portugal, the Company is now owned by EDP Renováveis, S.A. (“EDPR”), making the Company a vital part of an integrated strategic renewable energy company currently ranked third in the United States in wind energy by net installed capacity. We assisted Horizon wind with several of their wind development projects in California.

3. Eurus Energy Holdings: In Japan, Eurus Energy Japan Corporation performs comprehensive management of wind power generation.  At present, Eurus Energy Group is operating wind farms with a total output capacity of 1,491 MW in six countries in Asia, America and Europe. It also is operating the largest wind farm in Gangwon-do, South Korea, and is promoting the development and construction of wind farms at various other parts of the country.  ZGlobal is assisting Eurus entering the US market.

A Sampling of ZGlobal Inc. Renewable Relationships and Clients Domestic and International

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ZGlobal Inc. Provides Services to…

4. enXco:  Since 2002, enXco has been an affiliate of EdF Energies Nouvelles (formerly SIIF Energies). EdF Energies Nouvelles is a member of the EdF (Électricité de France) Group, with the charter of becoming a world leader in renewable energy.  enXco is a large developer of Wind and Solar projects.  ZGlobal is assisting enXco with wind development projects in the West.

5. Cogentrix Energy, LLC: A leading independent power producer headquartered in Charlotte, North Carolina. Cogentrix owns and operates a number of electric generating facilities, located predominately in the United States.  ZGlobal is assisting Cogentrix on many aspects of Solar development projects in the West.

6. Raser Technology: Based in Utah, Raser is a publicly traded technology, Industrial and Geothermal Power Generation. ZGlobal is assisting Raser in developing their Geothermal plant in Northern Nevada.

7. Solenergis: A developer of significant utility scale Solar power production, Solenergis utilizes ZGlobal services and experience in transmission systems, utility interconnections, energy sales strategies, and regulatory compliance.

8. Terra-Gen Power: A large and still expanding Renewable centric power producer, TGP was recently selected as the successful bidder to acquire Allco Wind Energy’s US assets located in the Tehachapi region of California for ~$360M. TGP has significant investments in Geothermal, Wind, and Solar projects here in California and abroad.