Renewable Energy in the Northwest ~ A Utility Perspective

Renewable Energy in the Northwest

~ A Utility Perspective

Thomas MacLean, Manager

Customer Renewable Energy Programs

August 27, 2008


Opportunities by Size

Utility Scale

Distributed Commercial

Distributed Residential

Opportunities by Technology

Utility Scale Renewable Resources

PSE Wind Projects

Wild Horse:

229 MW

32% capacity factor

Kittitas County, WA

9000-acre footprint

127 Vestas V80 wind turbines

Klondike III:

223.6 MW Facility50 MW PSE share

80 GE 1.5 MW, 44 Siemens 2.3 MW, 1 MHI 2.4 MW

Owned/operated by PPM Energy

Hopkins Ridge:

150 MW

35% capacity factor

Columbia County, WA

11,000 acre footprint

83 Vestas V80 wind turbines

1.8 MW Capacity

220 feet tall at hub

350 feet to tip of blade

Wild Horse Solar Demonstration ProjectLocated at Wild Horse Wind Farm near Ellensburg, WA

First utility-scale wind-solar facility in nation

Excellent sun - same solar resource as Houston

Already disturbed land

Existing transmission and operational synergies

Added tax benefits from co-location

500 kW Project – 300 homes at peak

Largest in the Pacific Northwest by a factor of three

~5 Acre footprint

$4-5 million in capital costs

90% of facility now operational;

final completion spring 2008

Primary Solar Site – Former quarry, too high for wind turbines (FAA airspace concerns)

Wind Farm Layout – 127 Turbines


Looking Forward

PSE Renewable Acquisition Strategy

≈85 aMW

≈240 aMW

10%

Future Renewable Acquisitions

Under Active Consideration

Existing PSE Renewables

PSE 10% Goal

RPS Requirement

Pacific NW Renewable Projects

Renewable Northwest Project


Caveats

BPA Transmission Constraints

Levelized Resource Cost Comparison

40

55

70

85

100

115

130

145

160

175

WindWind Natural GasNatural Gas HydroHydro System PPAsSystem PPAs

200820062004 200820062004 200820062004 200820062004

$44-62$76-106

$104-155

$60-85

$70-129

$102-174

$64-67$58-100

$79-164$42-74

$61-101

$74-11820-y

ear

Lev

eliz

ed C

ost

$/M

Wh

Notes:2004 prices represent Mid-C delivery. 2006 and 2008 prices represent deliveries to PSE’s systemSystem PPAs are offers that are shorter term in nature and not tied to a specific resource.

Rising Wind Turbine Costs

Source: Berkeley Lab database.Thorndike Landing analysis.

Wind turbines comprise 60% of total project costs.

Biomass -- Active Opportunities

Dairy Digesters

Wood Waste

Waste Water Treatment Plants

Landfill

Distributed Commercial Renewables

Green Power Program

Support for new, regional, small renewables

REC-based program

Primary supplier is Bonneville Environmental Foundation

Provides customer choice

Green Power – Sales Growth

Annual Green Power Megawatt-hours Sold

8,563

27,313

46,110

71,341

131,742

246,406

270,000

0

50000

100000

150000

200000

250000

300000

2002 2003 2004 2005 2006 2007 2008 Projection

Dairy Digester ProjectLynden, Washington

Single Farm- Anaerobic Digester

First in Washington State

Number of units -1 Reciprocating engine

Nominal output 300 kW (potential to 450 kW)

Project output ~2,000 MWh

Project costs ~$1M ($4,000/kW)

1,500 Cows

PSE InvolvementPower Purchase

RECs

Interconnection

Construction completed fall 2004

Customer Owned Generation

Growth in Customer Renewables

Total Net Metered Customers

2 7 12 18 24

4457

113

211

254

300

0

50

100

150

200

250

300

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2008

PSE Net Meter Customers

PSE Solar Demonstration Projects

Schools

Environmental Centers

Other Buildings

PSE “Green” Tariffs

Net Metering Services for Customer-Generator Systems (Schedule 150)

Net metering up to 100 KW

Surplus energy credited to customer bill

Eligible resources: wind, solar, anaerobic digester, hydro

Renewable Energy Production Incentive Payment Program (Schedule 151 works with either Schedule 150 or Schedule 91)

Production payments, meters AC energy before load

Eligible resources: wind, solar, anaerobic digester

Cogeneration and Small Power Production (Schedule 91)

Renewable production up to 2 MW

Current payment ~ $.077/kWh


Emerging Technologies

Concentrating Solar Power

Proposed NW Geothermal

China Cap

Raft River

Willow Springs

Neal Hot Springs

Newberry Crater

Crump Geyser

Baker

Currently Operating: ~14 MW (Raft River)

In Development: ~ 150 MW

In Consideration: ~ 250 MW

Wave & Tidal Power in the Northwest

Wave Projects

Makah Bay (Finavera)

OPT Reedsport (Ocean Power Tech.)

Douglas County (Wavegen)

OPT Coos County (Ocean Power Tech.)

Humboldt County (Finavera)

Tidal Projects

Race Rocks (Pilot)

Snohomish PUD (Planning)

Tacoma Power (Halted)

Willapa Bay (Planning)

Puget Sound Algae – Blue Marble

Technology Development

Concept Pilot Early Commercial

Favorable High Market Economics

Favorable Mass Market Economics

Solar PV

Dairy Digester

Fuel Cells

Wind

Traditional Biomass

Geothermal

Wave

Tidal

Algae

CPV

CSP Solar Thermal Electric

PHEV

Biomass Gasification

Batteries

Technology Development and Financial Support

Concept Pilot Early Commercial

Favorable High Market Economics

Favorable Mass Market Economics

State&

Federal

• Basic research: UW/WSU• Identify Washington advantages.• Grants & partnerships with private entities.•Establish legal frameworks

• Government as Customer •Tax Credits for Investment (ITC)• Tax Credits for Production (PTC)• Tax Credits for Manufacturing RE (OR)• Promote export market• Reduce regulatory barriers.

Private

Founder Financing

Venture Capital

Commercial Financing

Basic Research Funding

U.S. DOE Energy RD&D Spending FY1978-FY2009 Request

0.0

1000.0

2000.0

3000.0

4000.0

5000.0

6000.0

7000.0

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

mill

ion

200

0$

Hydrogen(EERE)

Electricty T&D

Fossil (includingCCT demo)

Renewables

Efficiency

Fusion

Fission

Source: Gallagher, K.S., "DOE Budget Authority for Energy Research, Development, and Demonstration Database," Energy Technology Innovation Policy, John F. Kennedy School of Government, Harvard University, February 2008.

Partnership Model for Early Commercial

Government•Funding•STEM Personnel•Disseminate Findings

UtilityMarket Access•Interconnection•Distribution•Customer•Safety and Reliability

Private Partner•Site and Resource•Enthusiasm•Production Responsibility

Commercially available, depending on economics

Tested and shows good potential

Early testing with theoretical potential

X Target Market

TechnologyUtility Scale



Wind X X

Solar X X XGeothermal X EES

Tidal X

Wave XBiomass Combustion X X

Biomass AD X XBiomass Gasification X

Algae X X

Fuel Cells X

Renewable Technology Outlook in the Northwest


Discussion

Resources Vary by Region

Renewable Energy in the Northwest ~ A Utility Perspective

Documents

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