Renewable Energy Workshop: Renewable Energy Policy and Regulatory Issues
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Transcript of Renewable Energy Workshop: Renewable Energy Policy and Regulatory Issues
©2014 Navigant Consulting, Inc.
DISPUT E S & INVESTI GATI O N S • ECONOMI C S • F INAN CI A L ADVISO RY • MANAGEM E N T CONSULT I NG
May 5, 2014
Renewable Energy Policy and Regulatory Issues
Paul Maxwell | Director, Energy Practice
AWEA WINDPOWER 2014 AWEA Renewable Energy Workshop Las Vegas, NV
1 ©2014 Navigant Consulting, Inc. 1 ©2014 Navigant Consulting, Inc.
Agenda
• Status of RPS Programs and Attainment
• Efforts to Change RPS
• Commerce Clause Challenges
• Avian Mortality Issues
• Closing
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Goals are similar to policies, but not legally binding.
The majority of states have established Renewable Portfolio Standards.
Status of RPS Programs and Attainment
Renewable Portfolio Standard Policies dsireusa.org March 2013
29 states,+ Washington DC and 2
territories, have Renewable Portfolio
Standards
(8 states and 2 territories have
renewable portfolio goals).
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Of the States with standards, nearly all had achieved compliance by 2011. Only California, Massachusetts, New Hampshire, New Mexico, New York and Rhode Island were short.
Compliance almost fully achieved.
Status of RPS Programs and Attainment
RPS Compliance Status
Source: Lawrence Berkeley National Laboratory, RPS Compliance Data Spreadsheet, May 2013
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Currently, “overshoot” expected due to stronger than expected growth in energy efficiency (lower loads), high project success rate, and a huge wave of solar PV installed before reduction of the ITC at the end of 2016.
In California, committed procurement may exceed need.
Status of RPS Programs and Attainment
0
1,000
2,000
3,000
4,000
5,000
6,000
2013
2016
2019
2022
2025
2028
2031
Cap
acit
y (
MW
)
Hydro
Wind
Solar Thermal
Small Solar PV
Large Scale Solar
PV
Geothermal
Biomass
State Wide
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
Requirements
Forecast
State Wide
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Efforts to Change RPS
Numerous methods have been attempted to change RPS requirements.
• Outright repeal
• Extend target
deadlines
• Reduce targets
• Delay
implementation
• Add non-
renewable fuels
• Add large
capacity
(>30MW) legacy
hydroelectric
resources
Rollback
• Raise renewable
generation
targets
• Create new
carve-outs for
specific
generation
sources
• Add new targets
for additional
utilities
Increase
• Add new eligible resources such as small
hydroelectric (<30MW)
• Extend the period of eligibility for certain resources
• Require a certain amount of in-state generation
• Amend the definition of “load”
• Modify credit multipliers
• Alternative compliance payments (ACPs)
• Administrative penalties
• Changes to renewable energy credits (RECs) and
Solar RECs (SRECs)
• Study of the RPS for extending eligibility or
potential modifications
Modifications
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» Over 120 bills were introduced to either rollback, increase, or modify RPS in 2013
» In the end, only 8 states passed bills, none involved rollback
» Overall net impact is a larger RPS market due to increased standards in Nevada (SB 252), Colorado (also SB 252) and Minnesota (HF 956)
Numerous bills attempted in 2013, net effect was an increase.
Efforts to Change RPS
Source: State Renewable Portfolio Standards Hold Steady or Expand in 2013 Session, Center for the New Energy Economy, Colorado State University.
2013 Session RPS Bills
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Compliance,
10
Eligible
Resources,
25
Re-state, 3
Clarify, 1
» 67 bills introduced
» As of early April, six had been enacted
» Of these six, none involve rollback
In 2014, fewer bills have been attempted.
Efforts to Change RPS
2014 Session RPS Bills
Source: Advanced Energy Legislation Tracker, Center for the New Energy Economy, Colorado State University.
Increase,
11
Rollback,
15
Modify, 39
State Bill No. Type Notes
New Mexico HB 232 Modify coops exempt from RPS if cost >1% of gross receipts
SB 81 Modify
exemption for schools where cost impact exceeds threshold
Oregon HB 4126 Modify
allow smaller utilities to buy RECs, larger utilities to sell under green tariffs
Utah SB 166 Modify renewable source must be located in Utah
Vermont H 702 Modify adds distributed generation
Washington HB 2733 Modify Adds conduit hydro
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» Some RPS:
– Requires in-state delivery or location requirements
– Limits the amount of out-of-state power that may satisfy
– Have a “carve-out” for in-state distributed generation
» Article I of the U.S. Constitution states in part that only Congress shall have the power to regulate commerce among the states
» Commerce Clause challenges have begun
– American Tradition Institute v. the Colorado RES.
– TransCanada v. the Massachusetts RPS
– Rocky Mountain Farmers Union v. California’s Low Carbon Fuel Standard (LCFS)
RPS legal challenges have begun based on the Commerce Clause.
Commerce Clause Challenges
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» American Tradition Institute v. Colorado and the Colorado RES
– Colorado RES contains carve-outs for distributed generation and multipliers for RECs associated with in-state renewable energy o Distributed generation in Colorado of 3% by 2020.
o 1.25x – 2.0x multipliers for renewable resources in Colorado
– 2013 legislation (SB 252) eliminated the in-state DG preference and multipliers
– Case still active, motions for summary judgment, May 24 pre-trial hearing deferred
» TransCanada claim against the Massachusetts RPS
– Distribution companies must buy renewable energy generated within the jurisdictional boundaries of the Commonwealth
– TransCanada sought to import wind energy from Maine
– After TransCanada’s complaint, Massachusetts issued emergency rules dropping the in-state requirement and grandfathering pre 2010 solar contracts
ATI claim still active, TransCanada has been settled.
Commerce Clause Challenges
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» In Rocky Mountain Farmers Union v. California’s Low Carbon Fuel Standard (LCFS)
– California’s carbon life-cycle analysis of fuels includes the cost of transportation to California
– Eastern District of California determined that California’s LCFS discriminated against interstate commerce and violated the Commerce Clause
– The Ninth Circuit reversed the decision, recognizing that California favored California fuels but holding that California’s actions were nevertheless permissible under the Constitution
– Groups have now petitioned the Supreme Court to re-hear the lower court’s ruling
Rocky Mountain Farmers petitioned to the Supreme Court.
Commerce Clause Challenges
Although not directly related to RPS, a finding of discrimination in the
LCFS by the Supreme Court would set a strong precedent for
challenging RPS rules nationwide
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» Research has shown that WTGs are a relatively minor cause of bird mortality
– Collision with blades and towers
– Small songbirds and bats
» Solar plants are an emerging cause
» Endangered Species Act
– Incidental Take Permits
– Habitat Conservation Plan
» Migratory Bird Treaty Act
Avian mortality still an issue.
Avian Mortality
Source: Calvert, A. M., C. A. Bishop, R. D. Elliot, E. A. Krebs, T. M. Kydd, C. S. Machtans, and G. J. Robertson. 2013. A synthesis of human-related avian mortality in Canada. Avian Conservation and Ecology 8(2): 11.
Annual Mortality of Canadian Birds Due To
Human Activities (Log-scale)
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» Recent legal action over avian mortality at wind projects
– Duke Energy Renewables - $1 million fine under the Migratory Bird Treaty Act (MBTA) for 14 golden eagle mortalities within the past 3 years
– NaturEner - $285 million Sempra tax equity investment jeopardized due to lawsuit by SDG&E (REC purchaser) that obligations to protect birds and bats not met
– EDF Renewables - $400 million contract cancelled by Xcel due to lack of timely resolution of Incidental Take and Habitat Conservation Plan issues
» Mitigation Measures
– Radar technology to detect birds on or near the site
– Field monitoring and shut down of turbines upon bird sighting
– Curtailment of turbines during periods of high flight activity
– Removing rock and debris piles that attract prey
Legal action and losses have mounted, putting pressure on mitigation measures.
Avian Mortality
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» Solar plants an emerging cause
– Ivanpah Thermal Power Tower - solar flux attracts insects, then insect-eating birds hurt by 750-900 degf heat
– Genesis Thermal Trough, Desert Sunlight PV - impact trauma with the panels, leaving birds vulnerable to resident predators
– No enforcement action….yet
» Mitigation measures
– Retrofit visual cues (UV-reflective or solid contrasting bands) into panels, suspend tower operation during peak migration times, avoid vertical orientation of mirrors during washing, perch deterrent devices
Avian mortality a growing issue with large-scale solar.
Avian Mortality
Plant Number of Bird
Deaths Observed
Genesis (trough) 31
Desert Sunlight (PV) 61
Ivanpah (Tower) 141
Source: National Fish and Wildlife Forensics Laboratory, “Avian Mortality at Solar Energy Facilities in Southern California: A Preliminary Analysis”, Rebecca A. Kagan, Tabitha C. Viner, Pepper W. Trail, and Edgard O. Espinoza.
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» Renewable energy laws and regulation have been tremendously successful to date in spurring deployment of renewables
– Nearly all states have achieved RPS targets
– Recent legislative efforts to roll back RPS requirements have failed
» However, challenges are growing
– The California LCFS commerce clause challenge will eventually reach the Supreme Court and result in rollback/shutdown of some RPS programs
– The impact of avian mortality on the industry will continue to grow as larger projects are proposed for development in less advantageous areas
– Technologies to mitigate avian impacts may constrain operations or lead to premature retirement of certain projects
Regulatory and legal challenges to renewables development are growing.
Closing
Developers, utilities, and regulators must work cooperatively to
mitigate these risks to ensure continued maturation of the utility-
scale renewable power market.
Key C O N T A C T S
©2010 Navigant Consulting, Inc.
Confidential and proprietary. Do not distribute or copy.
Key C O N T A C T S
©2010 Navigant Consulting, Inc.
Confidential and proprietary. Do not distribute or copy.
Key C O N T A C T S
©2010 Navigant Consulting, Inc.
Confidential and proprietary. Do not distribute or copy.
Key C O N T A C T S
©2014 Navigant Consulting, Inc. 15
Paul Maxwell | Director
Folsom, CA
+1.916.631.3200 direct