Alternative Energy Status: Western US 33 Sudbury Rd, Suite 2 Weston, MA 02493 Telephone 781-296-7525 Fax 781-894-4185 www.bostonenergytrading.com
cjylkka@bostonenergytrading.com 781-296-7525
1
Alternative vs. Renewable energy • Alternative Energy: energy derived from sources that do not use up natural resources or harm the environment, can include nuclear (Dictionary.com) • Renewable Energy: any naturally occurring, theoretically inexhaustible source of energy, that is not derived from fossil or nuclear (Dictionary.com, IPCC Intergovernmental Panel on Climate Change) • States have their own definitions: – – – –
WV count waste coal and tire derived fuel NC counts municipal solid waste OH counts advanced coal technology ND counts all hydro, MN counts any <100mw
cjylkka@bostonenergytrading.com 781-296-7525
2
cjylkka@bostonenergytrading.com 781-296-7525
3
cjylkka@bostonenergytrading.com 781-296-7525
4
cjylkka@bostonenergytrading.com 781-296-7525
5
Alternative Energy Drivers • State – RPS (Renewable Portfolio Standards) – Tax credits – Grants, loans, rebates • Federal – Production tax credits – Corporate depreciation – Grants, loans • Carbon Policy – REGGI (Regional Greenhouse Gas initiative) – AB32 (CA carbon cap and trade program) •
First auction is November 2012 cjylkka@bostonenergytrading.com 781-296-7525
6
cjylkka@bostonenergytrading.com 781-296-7525
7
States with the most wind
cjylkka@bostonenergytrading.com 781-296-7525
8
cjylkka@bostonenergytrading.com 781-296-7525
9
CA leads in Solar Market Share
cjylkka@bostonenergytrading.com 781-296-7525
10
cjylkka@bostonenergytrading.com 781-296-7525
11
Wind Challenges PNW • Over generation • Wind Forecast Error • Block Scheduling
Price Volatility
cjylkka@bostonenergytrading.com 781-296-7525
12
Over Generation in the PNW • During the spring when demand is low and hydro and wind are strong BPA forces wind units off the grid • Wind generators lost over 2.1 MM in tax and energy credits in 2011 • June 2011 Iberdrola, NextEra, Invenergy and Horizon wind file petition against BPA with FERC and suit in the Ninth Circuit Court for BPA to pay damages • Dec 2012 FERC rules BPA curtailment of wind “Discriminatory”
• BPA now revising policy structure cjylkka@bostonenergytrading.com 781-296-7525
13
Forecast Error
cjylkka@bostonenergytrading.com 781-296-7525
14
Forecast Error
cjylkka@bostonenergytrading.com 781-296-7525
15
Block Scheduling
cjylkka@bostonenergytrading.com 781-296-7525
16
Price volatility
cjylkka@bostonenergytrading.com 781-296-7525
17
Wind Challenges CA • • • •
Lack of peaking capacity Negative Pricing Volatility Escalation of retail rates?
cjylkka@bostonenergytrading.com 781-296-7525
18
Lack of Peaking Capacity
cjylkka@bostonenergytrading.com 781-296-7525
19
Increasing Negative Pricing
cjylkka@bostonenergytrading.com 781-296-7525
20
Increasing Volatility
cjylkka@bostonenergytrading.com 781-296-7525
21
cjylkka@bostonenergytrading.com 781-296-7525
22
Summation/ Thoughts • Watch CA as the Guinea Pig for alternative energy integration • Aggressive development of wind has consequences – Market Regulators work slow
• • • • •
The queue of wind development is massive Federal Production Tax Credit continuation Solar a better fit? Renewables marketed cheap/ What effect on retail rates? Power is Politics/ In the end the people will decide
cjylkka@bostonenergytrading.com 781-296-7525
23