Leslie lindo-sbap-june-2011-presentation-hour-two

transcript

Arizona’s Electricity Mix; the Renewable Energy Standard,

and Externalities…

Nancy LaPlaca, J.D.Advisor to AZ Corporation

Commissioner Paul Newman, Esq. Arizona Corporation Commission

nlaplaca@azcc.gov602-542-3682

June 25, 2011

Agenda – Hour Two

• Where does Arizona’s electricity come from, and how much solar?

• What is the “Renewable Energy Standard,” what is the Energy Efficiency Standard?

• Why don’t we have more solar?

• Value of solar to AZ

• What are ‘externalities’ and why should I care?

Coal, Nuclear, Natural Gas, Solar, Wind, Solar Hot Water….

• Issues are complex and confusing because different types of power plants have pro’s and con’s

• Coal and nuclear plants run 85-93% of the hours in a year

• Solar only makes electricity when the sun shines; however, AZ has the best land in the U.S. for solar because it is very flat and we have consistent sunshine

• KEY: we don’t include all the life-cycle costs of electricity generation, such as pollution, acid rain, health effects from burning coal, possible water pollution from natural gas drilling etc.

• We are at crossroads on energy policy – what do YOU think we should do?

Where does Arizona’s Electricity Come From, and How Much

Solar?

AZ’s Electricity Mix

• Total in-state generation: 25,000 MW

• Total in-state consumption: 16,000 MW– 50% coal– ~28% natural gas– ~22% nuclear

– Less than one-tenth of 1% solar• 54 MW installed in 2010• Total in-state solar: ~100 MW

Total in-state

Electricity use

Is 50% coal,32% NG,

17% nuclear

Coal:49%

Total solar PV capacity: 21 MW installed in 2009, 54 MW installed in 2010; v total in-state capacity of 16,000 MW, it’s a tiny amount…

Source: US Energy Information Agency October 15, 2010

TOTAL AZ generation =

~120,000 GWhs because AZ

exports 25-30% of power

AZ Imports Most Fossil Fuels

• AZ imports all its Natural Gas and 2/3 of coal• AZ spent $1.5 billion importing Natural Gas

(NG) for electricity in 2009– Another $800 million spent on NG for heating– Shale gas has been a game-changer, brought the

price of gas way down, but ultimately depleting– During Katrina, cost of NG doubled; also doubled

from 2007 to 2008 when oil peaked at $147/barrel

• AZ spent $500 million in 2007 importing

Agenda – Hour Two

AZ Renewable Energy Standard (RES) is 15% by 2025

Year Requirement

2008 1.75 %

2011 3.00 %

2014 4.50 %

2017 7.00 %

2020 10.00 %

2024 14.00 %

After 2024 15.00 %

AZ’s RES means that 15% of the kilowatt-hours generated by regulated utilities come from ‘clean energy’: solar, wind, biomass, solar hot water, concentrating solar etc. by 2025…

AZ’s RES is far lower than Colorado (30% by 2020), California (33% by 2020), Nevada (25% by 2025).

AZ’s EE Standard: What is it?

• AZ’s Energy Efficiency (EE) standard is 22% by 2020

• EE standard directs regulated utilities (APS, Tucson Electric Power, coops, but not Salt River Project) to save electricity rather than build new power plants;

• Utilities prefer to build power plants because they make more money;

• If the average utility decreases sales by 2%, profits decrease 24%; if sales decrease by 5%, profits decrease a staggering 59%!

The Effect of Much Higher EE Savings

6% 0%0%0%

Natural Gas

Nuclear

Conv. Hydro

Renewables

Energy Eff.

AZ 2008 AZ 2020

- Energy Efficiency becomes one-fifth of the energy “pie” in 2020 - Lower total costs, lower utility bills, more jobs, less pollution- Deferral of 3 large baseload plants 2020’s to 2030’s (by then more renewables, storage, electric vehicles)-$9 billion in lower customer bills (2011-2030; APS, TEP, Coops)

Why doesn’t AZ have more clean energy?

• Many reasons, but here are a few:– Monopoly utilities granted geographic territories (APS,

SRP, TEP etc.)

– Large central-station power plants

– Distributed generation is a new player, and solar has only recently come down in price

– Politics and the corrupting influence of fossil fuel $$$– Utilities don’t want to give up sales to ‘disruptive’

technologies.– The more distributed solar, the LESS revenue for

utilities; lost ‘fixed’ costs…

Agenda – Hour Two

APS’ RW Beck Study on the Value Of Distributed Energy

Operating Impacts and Valuation study

RW Beck study says the value of distributed solar is 7.9 to 14.11 cents/kWh in avoided costs for fuel, trans-mission, line losses, etc.

Kevin Phillips, Bad MoneyFrom ASPO-USA Conference, October 12, 2009

Manufacturing declined from60% to less than 10% of

corporate profits

Financial services increasedfrom less than 10% to nearly

50% of corporate profits

Local v. Out-of-State

Dollars

$73 out of every $100

spenton locally-

owned businessesstays local

Local v. Out-of-State

Dollars

Only $43 out of every $100

spenton non-local businesses stays local

Solar Hot Water (SHW): Huge Potential for AZ!Total

U.S., not just AZ

Concentrating Solar Power

How much does AZ spend on fossil fuels every year?

Cost of Natural Gas - More Volatile Since 2000

U.S. Currently Imports 5-12% of Natural Gas Consumed

Coal Capacity Factor MuchHigher Than Natural Gas:

AZ Can Hybridize NG plants!

U.S. Natural Gas and Coal Fleet Capacity Factors, 1976-2007

What are ‘externalities’ and why should I care?

“Externalities” in electricity• Uncounted costs are called “externalities” and include:

– Subsidies– Air pollution, water use and pollution– Mercury contamination– Lost productivity, morbidity and mortality– Health effects from fossil fuel burning

• 12/08 coal ash spill in TN cost $1.2 billion

• Power plants are big water users: nuclear the most, then coal; solar PV and wind use zero water; Concentrating Solar Power can be wet or dry. Wet CSP that uses a steam turbine uses as much water as a coal plant but does not pollute the water.

Coal’s Externalities / True Costs

Dr. Paul Epstein, Harvard study, Feb. 2011 “Full Cost Accounting for the Life Cycle of Coal”,

Coal-fired power plants produce 50% of U.S. electricity. Coal costs the U.S. $500B annually over its life cycle(extraction, transport, processing, and combustion)

•$74B in public health burdens in Appalachian communities•$187.5B from health costs of cancer, lung disease, and respiratory sickness in other parts of the U.S.•$29.3B from mercury impacts•$205B from carbon emissions’ climate impacts on land use, energy consumption, and food prices•$18B from the costs of cleaning up spills of toxic waste, the impact of coal on crops, property values, and tourism

Externalities would raise costs of electricity from coal-fired plants, from $0.10 / kWh to $0.28 / kWh, shifting it from one of the cheapest sources of electricity to one of the most expensive.

Water Intensity of Electricity Generation

Coal, s

Oil/gas

, stea

Combin

Coal, I

GCC, with

Coal, P

C, with

NGCC, with

Solar C

SP, wet

coolin

Solar C

SP, dry

Solar P

Biomas

s, ste

ant, w

wet co

Geothe

, bina

Geothe

ermal,

Conventional Generation

Emerging Technologies

Renewables

, with

Source: Western Resource Advocates“The Energy-Water Nexus: A Case Study of the Arkansas River Basin” 2008

Water Intensity of Electricity GenerationWater Intensity of Electricity Generation

$72.5 billion for Fossil Fuels

$12.2 billion for Wind and Solar

35Damages from these plants exceed $500 million a year

NOTE: CLIMATE CHANGE DAMAGES

NOT INCLUDED, ONLY SO2, NOx, PM

2.5 &10

National Academy Estimates Criteria* Pollutants from 406 Coal Plants Cause

$68B/Year $68B/Year Damage

“With public sentiment nothing can fail; without it, nothing can succeed.”

Abraham Lincoln

National Renewable Energy Laboratory Innovation for Our Energy Future

U.S. Coal: Where Does it Comes From, and Go To?

Thank you!

Paul NewmanArizona Corporation Commissioner

pnewman@azcc.gov 602-542-3682

Leslie lindo-sbap-june-2011-presentation-hour-two

Documents