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Increasing the Role of Increasing the Role of Renewable Energy Renewable Energy Sources Sources Bill Abolt Bill Abolt Chicago District Manager Chicago District Manager Shaw Environmental & Shaw Environmental & Infrastructure, Inc. Infrastructure, Inc. May 10, 2007 May 10, 2007

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Page 1: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Increasing the Role of Increasing the Role of Renewable Energy Renewable Energy

SourcesSourcesBill AboltBill Abolt

Chicago District ManagerChicago District ManagerShaw Environmental & Shaw Environmental &

Infrastructure, Inc.Infrastructure, Inc.May 10, 2007May 10, 2007

Page 2: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Regulatory Climate and Regulatory Climate and Renewable EnergyRenewable Energy

Renewable Energy Portfolio Standards Renewable Energy Portfolio Standards (RPS) require that a specified amount (RPS) require that a specified amount of energy come from renewable sourcesof energy come from renewable sources

These portfolio requirements are often These portfolio requirements are often adopted by states and applied as adopted by states and applied as mandates to electricity providersmandates to electricity providers

Portfolio standards can also be Portfolio standards can also be adopted on a voluntary basis as adopted on a voluntary basis as purchasing preferencespurchasing preferences

Page 3: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Regulatory Climate and Regulatory Climate and Renewable Energy Renewable Energy

Renewable Energy Portfolio mandates Renewable Energy Portfolio mandates and preferences are being adopted in and preferences are being adopted in increasing numbersincreasing numbers

These programs often seek to achieve These programs often seek to achieve multiple objectives often associated with multiple objectives often associated with both improved energy performance and both improved energy performance and sustainability goalssustainability goals Economic DevelopmentEconomic Development Environmental ImprovementEnvironmental Improvement Energy Independence, Reliability and Cost Energy Independence, Reliability and Cost

ControlControl

Page 4: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Regulatory Climate and Regulatory Climate and Renewable EnergyRenewable Energy

Mandatory Mandatory and voluntary portfolio and voluntary portfolio programs promote the use of programs promote the use of renewable energy and energy-renewable energy and energy-efficient practicesefficient practices

Common Opportunities:Common Opportunities: These standards create new sources of These standards create new sources of

revenue for clean energy investmentsrevenue for clean energy investments Tax credits and emissions credits can Tax credits and emissions credits can

also support clean energy investmentsalso support clean energy investments Clean energy investments can reduce Clean energy investments can reduce

both capital and operating costsboth capital and operating costs

Page 5: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Regulatory Climate for Regulatory Climate for Renewable EnergyRenewable Energy

22 states and the District of 22 states and the District of Columbia have implemented Columbia have implemented Renewable Portfolio StandardsRenewable Portfolio Standards

Page 6: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Regulatory Climate for Regulatory Climate for Renewable EnergyRenewable Energy

State Programs often vary in policy State Programs often vary in policy objectives and regulatory designobjectives and regulatory design Mix of Renewable Energy ResourcesMix of Renewable Energy Resources Inclusion of Energy EfficiencyInclusion of Energy Efficiency Preferences for in-state or specific types of Preferences for in-state or specific types of

renewablesrenewables Increasingly, States are considering Increasingly, States are considering

Renewable Energy Policies in their Renewable Energy Policies in their environmental compliance strategiesenvironmental compliance strategies State Air Quality PlansState Air Quality Plans Climate Change StrategiesClimate Change Strategies

Page 7: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Regulatory Climate for Regulatory Climate for Renewable EnergyRenewable Energy

Tax expenditures and other government Tax expenditures and other government assistance also support the trend towards assistance also support the trend towards increased development of renewable energyincreased development of renewable energy

Voluntary Renewable Energy purchasing Voluntary Renewable Energy purchasing programs complement mandatory programs programs complement mandatory programs and aid market and political acceptanceand aid market and political acceptance Corporate and Government purchasing Corporate and Government purchasing

initiativesinitiatives Voluntary Utility ProgramsVoluntary Utility Programs Retail programsRetail programs

Page 8: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Regulatory Climate for Regulatory Climate for Renewable EnergyRenewable Energy

Existing regulatory schemes may not be Existing regulatory schemes may not be sufficient to address the increased sufficient to address the increased reliance on renewables to meet energy reliance on renewables to meet energy and environmental objectives and environmental objectives Measurement and verification of performanceMeasurement and verification of performance Integration of energy performance and Integration of energy performance and

environmental objectivesenvironmental objectives Proliferation of programs that splinter Proliferation of programs that splinter

incentives and increase transaction costs and incentives and increase transaction costs and complexitycomplexity

Page 9: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Illinois and Renewable Illinois and Renewable EnergyEnergy

State of Illinois is working to expand State of Illinois is working to expand renewable energy sources and account renewable energy sources and account for the full range of environmental for the full range of environmental benefits associated with those sourcesbenefits associated with those sources

State energy and environmental State energy and environmental officials are working closely with US officials are working closely with US Department of Energy and National Department of Energy and National Renewable Energy Lab (NREL) to Renewable Energy Lab (NREL) to evaluate the environmental impacts of evaluate the environmental impacts of RPS policies in a national pilot projectRPS policies in a national pilot project

Page 10: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Illinois Pilot—PurposeIllinois Pilot—Purpose

Determine the extent to which the Determine the extent to which the Illinois Sustainable Energy Plan - Illinois Sustainable Energy Plan - which includes a Renewable Portfolio which includes a Renewable Portfolio Standard and an Energy Efficiency Standard and an Energy Efficiency Portfolio Standard (EPS) - will result Portfolio Standard (EPS) - will result in emissions reductions that are in emissions reductions that are quantifiable, replicable and scaleable, quantifiable, replicable and scaleable, and that can be incorporated into the and that can be incorporated into the State Air Quality Plans.State Air Quality Plans.

Page 11: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Illinois Sustainable Energy Illinois Sustainable Energy Plan: RPSPlan: RPS

Percent of electricity sold to Percent of electricity sold to customers from renewable sources:customers from renewable sources:

2% by 20072% by 20073% by 20083% by 20084% by 20094% by 20095% by 20105% by 20106% by 20116% by 20117% by 20127% by 20128% by 20138% by 2013

Page 12: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Illinois Sustainable Energy Illinois Sustainable Energy Plan: EEPSPlan: EEPS

Procure energy efficiency and Procure energy efficiency and demand reduction to reduce demand reduction to reduce projected annual load growth by:projected annual load growth by:

10% in 2007 - 200810% in 2007 - 2008

15% in 2009 – 201115% in 2009 – 2011

20% in 2012 – 201420% in 2012 – 2014

25% in 2015 - 201725% in 2015 - 2017

Page 13: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Illinois Pilot—Illinois Pilot—ParticipantsParticipants

StateStateIL Dept. of Commerce & Econ. IL Dept. of Commerce & Econ. OpportunityOpportunity

IL Environmental Protection AgencyIL Environmental Protection AgencyIllinois Commerce CommissionIllinois Commerce Commission

FederalFederal U.S. Department of EnergyU.S. Department of EnergyU.S. Environmental Protection AgencyU.S. Environmental Protection AgencyNRELNREL

ResearchResearch Shaw Environmental, Inc.Shaw Environmental, Inc.UIC Energy Resources CenterUIC Energy Resources CenterPowerWorld CorporationPowerWorld CorporationWestern Illinois UniversityWestern Illinois University

Page 14: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Illinois Pilot—ProcessIllinois Pilot—Process

Determine the amount, type and Determine the amount, type and location of electric generation that location of electric generation that will be displaced by RPS/EEPS will be displaced by RPS/EEPS measures stipulated in the measures stipulated in the Sustainable Energy Plan (SEP)Sustainable Energy Plan (SEP)

Determine the impact of SEP Determine the impact of SEP measures on air emissions for:measures on air emissions for:

Sulfur dioxide (SOSulfur dioxide (SO22)) Nitrogen oxides (NOx)Nitrogen oxides (NOx) Mercury (Hg)Mercury (Hg) Carbon dioxide (COCarbon dioxide (CO22))

Page 15: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Modeling the Impact of Modeling the Impact of RPS Measures on Electric RPS Measures on Electric

GenerationGeneration Illinois is a significant exporter of powerIllinois is a significant exporter of power

Where air quality benefits specifically Where air quality benefits specifically from renewables will accrue is unknown; from renewables will accrue is unknown; increased use of renewables may result in increased use of renewables may result in emission reductions outside the non-emission reductions outside the non-attainment areasattainment areas

Regional model of economic dispatch of Regional model of economic dispatch of generation needed because power flows generation needed because power flows across state lines according to economics across state lines according to economics and the physical constraints of the systemand the physical constraints of the system

Page 16: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Illinois PilotIllinois Pilot Coal is the primary fuel that will be Coal is the primary fuel that will be

displaced by the Illinois RPS/EPSdisplaced by the Illinois RPS/EPS The RPS/EPS will result in pollution The RPS/EPS will result in pollution

reductions for all pollutants in a multi-reductions for all pollutants in a multi-state areastate area

The RPS/EPS displaces fossil fuel The RPS/EPS displaces fossil fuel generation in multiple statesgeneration in multiple states

The RPS/EPS produces emission The RPS/EPS produces emission reductions that may not be adequately reductions that may not be adequately captured under current air quality captured under current air quality regulatory schemesregulatory schemes

Page 17: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Illinois Pilot Illinois Pilot

Portfolio mandates can impact the order Portfolio mandates can impact the order in which power is dispatchedin which power is dispatched

The mix of renewable resources that are The mix of renewable resources that are deployed to the grid impact both the deployed to the grid impact both the extent and the timing of emission extent and the timing of emission reductionsreductions

A state’s RPS program can be structured A state’s RPS program can be structured to address specific air quality objectivesto address specific air quality objectives Improved modelingImproved modeling Increased collaboration between state energy Increased collaboration between state energy

and environmental officialsand environmental officials

Page 18: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Metropolitan Mayors Metropolitan Mayors Caucus Caucus

Initiated a pilot project to promote the Initiated a pilot project to promote the expansion of renewable energy and energy expansion of renewable energy and energy efficiency in municipal projectsefficiency in municipal projects

Seek to capture the energy and Seek to capture the energy and environmental attributes of municipal clean environmental attributes of municipal clean energy investmentsenergy investments

Created Created Clean TagsClean Tags for inclusion in both for inclusion in both Climate Change and Portfolio ProgramsClimate Change and Portfolio Programs

Caucus will serve as aggregator of Caucus will serve as aggregator of Clean Clean TagsTags

Page 19: Increasing the Role of Renewable Energy Sources Bill Abolt Chicago District Manager Shaw Environmental & Infrastructure, Inc. May 10, 2007

Questions?Questions?

Shaw E & I – ChicagoShaw E & I – Chicago

Bill AboltBill Abolt

Phone: (312) 499-3525Phone: (312) 499-3525

E-mail: [email protected]: [email protected]