connecticut department of energy and environmental protection · approaches to clean energy ... •...

Connecticut Department ofEnergy and Environmental Protection

Connecticut Department of Energy and Environmental Protection

Connecticut’s Renewable Power Strategy:

Achieving the Appropriate Balance in Connecticut’s Renewable Portfolio

Standard (RPS)

2

Tracy Babbidge, Interim Bureau Chief Bureau of Energy and Technology Policy

Connecticut Department of Energy and Environmental ProtectionConnecticut Department of Energy and Environmental Protection

Clean Energy Policy FrameworkPrinciples:• Create flexible portfolio approach to clean energy in which the marketplace (not the

government) picks winners and losers

• Spur innovation in technologies, policy, incentives, financing, and clean energy business models

• Drive “all cost effective” energy efficiency in the government, institutional, residential, and commercial/industrial sectors

• Push for “deeper” energy efficiency – covering not just lighting but also heating, ventilation, air conditioning, insulation, windows, machinery, and appliances

• Move away from traditional “subsidy” approach to a “finance” model—using limited government resources to leverage private capital

• Establish a platform for entrepreneurial activity and testing of diverse technologies and approaches to clean energy

• Focus on deployment at scale to lower costs

• Harness market forces (e.g., reverse auctions) to bring down rates

3


Backdrop: CT Electricity Rates Falling

15

15.5

16

16.5

17

17.5

18

Jan

-10

Mar

-10

May

-10

Jul-

10

Sep

-10

No

v-1

0

Jan

-11

Mar

-11

May

-11

Jul-

11

Sep

-11

No

v-1

1

Jan

-12

Mar

-12

May

-12

Avg Retail Electricity Price for CT (c/kWh)

Source: EIA


CT Regaining Competitiveness-Commercial

• Connecticut rates decreasing faster than other states • States in other regions that have not made investments in cleaner power

generation beginning to feel upward price pressures from costly upgrades

-15

-10

-5

0

5

10

Percent Change in Average Price of Electricity-Commercial Sector May 2010-May 2012

CT MA NJ PA RI IL NH OH

NC SC


CT Regaining Competitiveness-Industrial

• Connecticut rates decreasing faster than other states • States in other regions that have not made investments in cleaner power

generation beginning to feel upward price pressures from costly upgrades

-15

-10

-5

0

5

10

Percent Change in Average Price of Electricity-Industrial Sector May 2010-May 2012

CT RI PANHNJIL

NC

MAOH

SC


Builds on Legislative Action on Energy

• Creation of Department of Energy and Environmental Protection

• “Green Bank” low-cost financing

• Reverse Auctions to drive down costs

– Zero Emissions Renewable Energy Credit

– Low Emissions Renewable Energy Credit

– Larger scale clean energy procurement

• Commercial Property Assessed Clean Energy (C-PACE) Program

• “Lead by Example” state and municipal energy efficiency program

• Utility performance standards

7


Strategic Energy Planning Process

• Forecasts trends in the electricity sector out to 2022

• Established plan to save ~$534 million annually through increased energy efficiency spending

Integrated Resource Plan

• Implements expanded budget for energy efficiency spending

Conservation & Load Management Plan

• Long-term vision out to 2050

• Plan for all energy needs of the state, covering all fuels, all sectors, including: Buildings (Energy Efficiency), Industry, Electricity, Transportation & Natural Gas

Comprehensive Energy Strategy

1

2

3

8


Renewable Policy Standards: Basics

9

• Connecticut’s RPS requires that electricity providers obtain a minimum percentage of their retail load by using renewable energy.

• Energy resources are classified as "Class I," "Class II," or "Class III" and each Class must constitute a specific percent of the total RPS target.


Strategic Policy Objectives

• .

10

• Reduce:

– Emissions

– Fossil fuel use

– Other environmental impacts

– Volatility

– Long-term prices

• Increase:

– Fuel diversity

– Energy security

– Reliability

– Regulatory risk

• Technology Policy:

• Encourage emerging technologies

• Promote local economic development

• Diversity among RE technologies

Constraints:•Accomplishing Objectives cost-effectively (cost containment/control)•Interstate Commerce Clause


RPS Policy Tensions

11

Least Cost

• New technologies

• Diversity

• Local Benefits


Connecticut RPS Targets


Connecticut’s RPS Commitments

To date CT has consistently met it’s RPS obligations.

CT in state resources account for around 4% of its Class I RPS requirement; the remaining 96% comes from sources in neighboring states.*

Over 70% of CT Class I RECs came from biomass resources in 2008.**

ACP payments accounted for less than 1% of the compliance strategy in 2008.**

Sources: * NEPOOL Class I REC Market Snapshot

** Annual Review of CT RPS Compliance 2008

13


Economic Impacts Associated with CT RPS

• High Estimate 14,767

• Low Estimate 9,663Jobs

• High Estimate $3,722

• Low Estimate $2,524State GDP

(billions – 2007 $)

• High Estimate $1,363

• Low Estimate $901Personal Income

(billions – 2007 $)

• High Estimate $123

• Low Estimate $81Net State Revenue

(billions – fixed 2007 $)

Source of Data: CEAB Report, “A Review of Connecticut’s Renewable Portfolio Standards”

Connecticut Department of Energy and Environmental Protection

Biomass/ Biofuels

Fuel CellsSmall HydroLandfill Gas

Onshore Wind

Offshore WindSolar PV

Imports

Class I RPS

Demand

0

5,000

10,000

15,000

20,000

25,000

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

GW

h p

er y

ear

Regional Class 1 Shortage Projected for 2017New England Class I Renewable Resource Supply and Demand Balance

15


Key RPS Issues Raised in the IRP

Transmission expansion needed to integrate remote wind resources.

Availability of funding for renewable projects.

Uncertainty of federal production tax credits.

Predicted shortage of Class I resources in the future.

Class III resources counting toward Class I compliance.

Minimizing ratepayer costs.

Leveraging associated economic benefits in CT.

16


Regional RPS

RPS and related goals call for renewable resources andenergy efficiency to comprise 31.2% of New England’stotal projected energy use by 2020, with state energy-efficiency and combined heat and power programsmaking up about 13.6% of these goals.

Source: 2011 Regional System Plan (RSP)


Location of Class I Resources*

* La Capra Associates: New England Renewable Outlook:2012 at the Crossroads

84% of existing and under construction projects are in Northern New England

Connecticut Department of Energy and Environmental ProtectionConnecticut Department of Energy and Environmental Protection19

Coordinated Regional Renewable Power Procurement

OBJECTIVE: To consider identifying, through joint or separate but

coordinated competitive processes, those resources that have

the greatest potential to help meet the region’s renewable energy

goals at the lowest “all-in” delivered cost to consumers – the

cost of generation & transmission combined

TIMEFRAME: Work plan under development

GOAL: Issue a coordinated procurement RFP by end of 2013.

Regional Effort by the New England States Committee on Electricity


Align Objectives and Policies

20

Align ObjectivesPolicy

Help achieve RPS targets

Minimize Cost

LocalBenefits

Emerging Tech

Other

Section 127 Procurement –Private Developers

ZRECs/LRECs

Section 127 Procurement-Utility-owned RE(FC & PV)

Project 150

for Biomassproject

Retain beneficial features, evaluate opportunities to improve contract structures.

Emerging tech grant/rebate programs(PV, CF, on-site)

Solar PV RFP

IRP and related long-term procurement provisions from PA 11-80

? ? ? ?

Commitment to NESCOE Regional Coord. Proc.


CT’s RPS Study

Look at all Classes.

Consider process changes to evaluate progress and enable mid-course corrections when needed.

Evaluate the predicted shortage of Class I resources in the future.

Identify mechanisms to reduce ratepayer costs.

Balance policy objectives.

Support continued growth of CT’s renewable industry and technology innovation.

21


CT’s RPS Study-Timeframe

Draft study by early December .

Public review and comment period.

Expect to include legislative recommendations for next session.

22

connecticut department of energy and environmental protection · approaches to clean energy ... •...

Documents