Role of Renewable Energy in

Future Electricity Supply

2006 NARUC Summer Meeting
San Francisco
July 30, 2006

Hank Courtright
Senior Vice President
Environment Sector and
Member Services
 U.S. Electricity Generation Forecast

Generation, Billion kWh

7000
Renewable/Other
6000 Nuclear
Natural Gas
5000 Petroleum
Coal

4000

3000

2000

1000

0
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
U.S. DOE Annual Energy Outlook – 2006

© 2006 Electric Power Research Institute, Inc. All rights reserved. 2

 Renewable Energy Technology Overview

Renewable Energy 2005 World

Status Issues
Technology Installed MW

Integration at Large
Wind Commercial 52,100
Scale
Conversion Efficiency
Solar PV Commercial 3,900
and Cost
Demo and
Solar Thermal 370 High Capital Cost
Pre-Commercial
Biomass
Commercial 20,000 High Fuel Cost
Combustion

Biomass Gasification Pilot and Demo <20 Hot Gas Cleanup

Ocean Energy Pilot and Demo <20 Cost and Reliability

Source: EPRI Renewable Energy Technical Assessment Guide: TAG-RE 2005 (1010407, 12/05)

© 2006 Electric Power Research Institute, Inc. All rights reserved. 3

 State of the Global Renewable Energy Market
160,000 MW Installed Growing at 25 GW/Year

“New Renewables” Plus:

Installed Base (000 MW)
160 720,000 MW Large Hydro
Solar
140
Geothermal 220,000 MW (th) Biomass
120 Biomass Heating
Windpower
100
Small Hydro 28,000 MW (th) Geothermal
80 Heating
60
77,000 MW (th) Solar Heating
40
1,000 MW of off-grid solar
20
PV systems
0
World DCs EU 25 US Japan Source: Renewables 2005: Global Status Report

Total Renewable Energy = 1,206,000 MW Equivalent

for Electricity and Heating Around the World

© 2006 Electric Power Research Institute, Inc. All rights reserved. 4

 Wind Power

U.S. Wind Power Installations,

MW/Year
3500
Installed
3000
RPS Required
New
2500

2000

1500

1000 9,700 MW installed base, 2005

35,000 MW estimated by 2015
500 Key Issues:
. Turbine availability
0 . RPS extension past 2007
1990 1995 2000 2005 2010 . Siting and transmission
Sources: AWEA, GE Wind, and ACORE

© 2006 Electric Power Research Institute, Inc. All rights reserved. 5

 Wind Installations in U.S.

Per capita income in 1999

45,000

25,000

5,000

Status
Completed
Proposed
Speculative
Under development

Source: GE

© 2006 Electric Power Research Institute, Inc. All rights reserved. 6

 Solar PV
$7 Billion/Year Global Industry

U.S. Solar PV Installations,

MW/Year
250
Grid
200 Off-Grid

150
Approximate 5,000 MW in place
Adding 1,500 MW/year globally
100
Key Issues:
50 • Global competition
• Distribution system impact

0
2000 2001 2002 2003 2004 2005 2006 E
Sources: PV News and ACORE

© 2006 Electric Power Research Institute, Inc. All rights reserved. 7

 Net Metering Programs ¾ 40 States + D.C.
ME: 100 kW
IN: 10 kW NY: varies
and 1,000 kWh/month (10 kW - 400 kW) VT: 15 kW,
25 kW 150 kW for ag.
Ohio:
50 kW 100 kW 40 kW NH: 25 kW
No limit
25 kW MA: 60 kW
20 kW
25 kW RI: 25 kW
30 kW
25 kW CT: 100 kW
No limit 50 kW NJ: 2 MW
30 kW DE: 25 kW
40 kW
25 kW 100 kW MD: 200 kW
15 kW DC: 100 kW
1 MW
VA: 10 kW (res.);
500 kW (comm.)
10 kW 10 kW NC: 20 kW (res.);
100 kW (comm.)
Source: Union of GA: 10 kW (res.);
Concerned Scientists
50 kW 100 kW (comm.)
OK: 100 kW State-Wide
or 25,000 kWh Programs
FL: 10 kW Individual
HI: 50 kW Utilities
LA: 25 kW (res.);
AR: 25 kW (res.);
100 kW (comm. or ag.)
100 kW (comm.)

© 2006 Electric Power Research Institute, Inc. All rights reserved. 8

 Geothermal, Hydropower and Solar
Thermal-Electric

Solar Dish-
Sterling:
350 MW
Contracts

500 MW Contracts
Solar Trough:
50 MW
Under
Construction

Incremental Hydro

© 2006 Electric Power Research Institute, Inc. All rights reserved. 9

 Renewable Fuels
U.S. Ethanol and Biodiesel
Over $2 Billion Invested in 2005

Million Gallons/Year
6000

5000
Corn-Based Ethanol
4000

3000

2000

1000 Biofuel options:

• Corn-based ethanol fuel
0
• Cellulosic ethanol fuel
1985 1995 2005
Est • Bio-diesel – U.S. and Europe
Source: Renewable Fuels Association and ACORE

© 2006 Electric Power Research Institute, Inc. All rights reserved. 10

 Municipal Solid Waste (MSW) or Waste to
Energy (W-T-E) Generation

• W-T-E Generation is driven by increasing land fill costs,

$50–75/ton in some areas…it’s not the cheapest source
of electric energy.
• Up to 34% of Municipal Solid Waste in New England goes
to energy, 27% recycled, 39% to land fill.*
• For the U.S. 50 States average is 7% combusted, 32%
recycled, and 61% to land fill.*

*From Columbia Univ. Earth Engineering Center, 2003

© 2006 Electric Power Research Institute, Inc. All rights reserved. 11

 Renewable Portfolio Standards

January 2006

MN: 1,125 MW wind by 2010 ME: 30% by 2000

NY: 25% by 2013 MA: 4% by 2009 +
MT: 15% by 2015
1% annual increase
WI: 2.2% by 2011
RI: 15% by 2020

IA: 105 MW CT: 10% by 2010

CA: 20% by 2010
*NJ : 6.5% by 2008
*NV: 20% by 2015 *CO: 10% by 2015 *PA: 18%¹ by 2020
*DE: 10% by 2019

*AZ: 1.1% by 2007 *MD: 7.5% by 2019

*NM: 10% by 2011 *DC: 11% by 2022

TX: 5,880 MW by 2015

HI: 20% by 2020 State RPS

*Minimum requirement and/or increased credit for solar Goal

¹ PA: 8% Tier I, 10% Tier II (includes non-renewable sources)

Source: Interstate Renewable Energy Council

© 2006 Electric Power Research Institute, Inc. All rights reserved. 12

 The Supply Effect of RPS

42,000
Hawaii
New renewable energy supported:
36,000
32,000 MW by 2017 California

30,000 Nevada
AZ & NM
CO & MT
Megawatts

24,000
Texas

Minnesota
18,000 IA & WI
Illinois*
Maryland
12,000 Pennsylvania
DC & DE
New Jersey
6,000 New York
CT & RI
MA
0 Maine
00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
Source: Union of Concerned Scientists *Assumes regulatory enforcement of voluntary RES.

© 2006 Electric Power Research Institute, Inc. All rights reserved. 13

 Renewable Energy Financing is Entering
the Mainstream

Renewable Energy Global M&A

Activity, $ Millions
10000

8000

6000

4000

2000
ACORE’s RE Finance Forum 2005
0
Major IPOs in 2005: 2001 2002 2003 2004 2005
• Q-Cells Germany Estimate
• SunPower USA Projects
• Suntech Taiwan Technology and Service Cos
• Suzlon India Developers
Source: New Energy Finance

© 2006 Electric Power Research Institute, Inc. All rights reserved. 14

 Fossil Fueled Generation Technologies in 2010

Levelized Cost of Electricity, Cents/kWh

10
Integrated Gasification
9 No CO2 Capture
Combined Cycle*
8 (IGCC)

7 Natural Gas
Combined Cycle**
6 (NGCC)
Pulverized Coal*
5 (PC)
4

3
0 10 20 30 40 50
*Coal @ $1.50/mmBtu Cost of CO2, $/Metric Ton
**Nat’l Gas @ $6/mmBtu
© 2006 Electric Power Research Institute, Inc. All rights reserved. 15
 Non-CO2 Emitting Generation Technologies
in 2010
Levelized Cost of Electricity, Cents/kWh
10

8
Wind*
7

6 Biomass

5
Nuclear**
4

3
0 10 20 30 40 50
* 29% Capacity Factor Cost of CO2, $/Metric Ton
** $1700/kw Capital Cost
© 2006 Electric Power Research Institute, Inc. All rights reserved. 16
 Comparative Costs of 2010 Generating Options

Levelized Cost of Electricity, Cents/kWh

10

9
IGCC*
8
Wind***
7 NGCC**
6
Biomass
PC*
5
Nuclear****
4

3
0 10 20 30 40 50
*Coal @ $1.50/mmBtu **Nat’l Gas @ $6/mmBtu Cost of CO2, $/Metric Ton
***29% Capacity Factor ****$1700/kw Capital Cost

© 2006 Electric Power Research Institute, Inc. All rights reserved. 17

 Comparative Costs of 2020 Generating Options

Levelized Cost of Electricity, Cents/kWh

10

7
PC*
6 NGCC** IGCC*
5 Wind*** Biomass
4
Nuclear****

3
0 10 20 30 40 50
*Coal @ $1.50/mmBtu **Nat’l Gas @ $6/mmBtu Cost of CO2, $/Metric Ton
***29% Capacity Factor ****$1700/kw Capital Cost

© 2006 Electric Power Research Institute, Inc. All rights reserved. 18

 Wind and Biomass Status and EPRI
Program Direction
Historical and Projected Installed Wind Capacity 1981 - 2009

Wind: 120,000

110,000
Europe U.S. Rest of World

• Maturing technology and significant 100,000

resources, ~50 GW worldwide. Wind will 90,000

Installed Capacity (MW)

80,000
play important role as non-emitting 70,000

generation of choice. 60,000

• Future focus on integration issues on/ 50,000

40,000
off shore, forecasting, condition 30,000

monitoring, emerging operation and 20,000

maintenance issues as utility own wind. 10,000

0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Year
Source: BTM Consult, World Market Update, 2005

Biomass:
• Fits utility’s traditional model, central dispatchable,
interest has been with co-firing, testing, corrosion
assessment, etc.
• Direction is to track European experience broaden
look to biofuels, gasification, more co-firing tests,
develop biomass deposition.

© 2006 Electric Power Research Institute, Inc. All rights reserved. 19

 Technology Status and EPRI Program Direction
with Solar, Geothermal and Ocean Energy

Solar Energy:
• Rooftop/building PV will emerge
with cost/efficiency improvement.
• Solar thermal is better utility fit
but unproven and less upside.
• EPRI monitoring for PV breakthrough, evaluating
solar thermal technology demonstrations.
Geothermal Energy:
• 2500 MW in the U.S., mostly in California and
Hawaii. Issues include high cost of geothermal
Subsurface temperatures
wells, decrease output over time. at 6-km depth (deg C) Source: NREL

• Utility interest has waned, we will monitor.

Ocean Energy:
• A few hundred kW worldwide, ocean tidal and wave
energy offers significant potential, 10–20 years out.
• EPRI opportunity is in early demonstrations and leadership
in the national program, including related wind-wave and
hydro-kinetic turbines.

© 2006 Electric Power Research Institute, Inc. All rights reserved. 20