Capacity - CDFA

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Capacity - CDFA

Review of Renewable Energy

Generation in U.S.

CDFA, Intro to Energy Finance

David Feldman

July 31, 2012

NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.


U.S. Energy Mix

Net U.S. Generation by Energy Source, 2011

Natural Gas

Coal

Nuclear

Petroleum

Hydroelectric

Other

Other

Renewables

Planned U.S. Electric Generation Capacity

Additions, 2011-5 (85 GW)

Natural Gas

Geothermal Nuclear

•Currently Renewables only produce ~5% of electric generation

•However, a large portion of capacity being built in near future will come from

renewable sources

Wind

Solar Thermal

& PV

Wood

Geothermal

Other

Biomass

Other

Wind

Coal

Solar

Thermal

and

Photovoltai

c

Sources: Energy Information Agency (EIA). “Electric Power Monthly”, 07/26/12. Planned U.S. Electric Generation Capacity Additions only includes systems > 1 MW,

therefore distributed PV included through: EIA, “Annual Energy Outlook”, table A16, PV End-Use Sector, 06/25/12.

2


Renewable Portfolio Standards

Current policy

is largely

driven by

states through

the electoral

process (aka

the people)

But there are federal incentives:

• Production Tax Credit (PTC): ~2.2 cent/kWh of energy produced. Exp. end of ‘12.

• Investment Tax Credit (ITC): Tax credit on 30% of the capital cost (non avail. for wind)

• Treasury 1603 grant (exp. end of ‘11): Cash grant instead of tax credit (limited tax appetite)

• Clean Renewable Energy Bonds (CREB’s): Bonds for non-taxable entities

• Accelerate Depreciation

3


Different Types of Solar

Solar Thermal

Photovoltaics (PV)

Concentrated Solar

Power (CSP)

Distributed

Generation,

on-site or near

point of use

Centralized

Generation,

large users or

utilities

4


Photovoltaic Technology

•Employs a semiconductor material to generate

electricity

•All other types of energy generation rely on

mechanical energy

•PV produces DC current which must be

converted to AC energy to feed into grid (through

an inverter)

•Market: Residential; Commercial, Utility

•Geographically diverse

•System Size: 1 kW to 250 MW

•U.S. Capacity, EY ‘11: ~4 GW

•Technologies: thin-films, crystalline silicon (c-Si), CPV

•c-SI modules have 40+ yr. history and are ~85% of

market

•Storage: batteries are used, though is a niche market

•Distributed generation relies on “net-metering”

or sells directly to grid

5


Photovoltaic Solar Resources

Global Demand (GW)

0

2005 2006 2007 2008 2009 2010 2011E 2012P 2013P 2014P

Note: E = estimate, P = projection

Sources: median of Barclays (03/19/12), BNEF (02/06/12), Citibank (02/22/12), Cowen (03/20/12) EPIA (Market Outlook 2011, Global Market Outlook until 2015), Goldman

Sachs (02/29/12), Navigant Consulting (01/26/12) Photon Consulting (Solar Annual 2012), Stifel Nicolaus (01/25/12), UBS (01/20/12)

6

50

40

30

20

10

•U.S. has very good PV resources as

compared to places like Germany/Spain

•Last year Germany installed ~4x more PV

capacity that U.S. and is 1/6 the size

•Subsidies have played a large role on

where PV has been installed

U.S. China India Japan Europe ROW


U.S. Installation Breakdown

Quarterly PV Installed (MW DC)

900

800

700

600

500

400

300

200

100

-

U.S PV Installations by Market Segment

Utility

Non-Residential

Residential

152

22

67

187

51

73

187

18

101

361

167

119

276

38

166

331

50

212

227

173

250

62 62 66 75 72 69 73 83

• An estimated 1.86 GW of PV was installed in U.S. in 2011

• Non-residential installation was the largest sector, followed closely by the Utility sector

• CA & NJ consistently the top two states in PV U.S. installations

473

* “Next Four States”: 2011: NM , PA, CO, NY

Sources: GTM/SEIA : U.S. Solar Market Insight Q4 2011 & 2011 Year-in-Review. Q1 ’10 – Q2 ‘11 data supplemented by earlier GTM/SEIA Solar Market Insights

776

443

Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11

U.S. PV Installations by State (MW DC), 2011

Other

256

Next Four

States*

355

Arizona

273

California

542

New Jersey

313

7


Sample PV Projects

Residential System

Installed by SolarCity

Utility-Scale System

Installed by First Solar

Commercial System

Installed by SunEdison

8


CSP: Overview

•CSP requires direct sunlight

•Limited to certain areas like Southwest U.S.

•Different Technologies:

• Troughs, Towers, Dishes

•Most applications are very large in scale

•After fluid is heated, it operates much like traditional energy

generation (coal, nuclear)

•Has the ability to store energy

• Molten salt

•Can be incorporated into traditional energy generation (hybridized)

9


CSP: Different Technologies

• Linear Focus – Tube Receiver

• Scale: Utility | 30 to 250 MW

Troughs Towers

• Solar Concentration: 50 suns

• Storage Capability – Oil to Salt Heat Exch.

• Commercially Proven – 20 yrs Experience

Dishes

• Point Focus – Central Receiver

• Scale: Utility | 3 to 250 MW

• Dual Axis Tracking – Azimuth & Elevation

• Solar concentration: 800 suns

• Storage Capability – Salt | Lowers Cost

• First Commercial Plant Just Completed

• Point Focus – Engine/Receiver

• Scale: Distributed/Utility | 10kW to 100

MW

• Dual Axis Tracking – Always Looking at the

sun – No cosine loss

• Storage Capability: Under Development

10


CSP Market Status: U.S.

Currently Operating:

� SEGS 1-2 (Cogentrix): 44 MW Trough

� SEGS 3-9 (FPL-NextEra): 310 MW Trough

� Nevada Solar One (Acciona) 64 MW Trough

� Martin (FPL-NextEra): 75 MW Trough

� Sierra (eSolar) 5 MW Tower

� Coalinga Hybrid (Bright Source) 5 MW Tower

� Maricopa (Stirling Energy Systems) 1 MW Dish

� Cameo Hybrid (Abengoa) 1 MW Trough

Total 505 MW

Under Construction with DOE Loan Guarantees:

� Ivanpah (Bright Source): 392 MW Tower $1.6 B

� Solana (Abengoa): 280 MW Trough w/Storage $1.4 B

� Crescent Dunes (Solar Reserve): 110 MW Tower w/Storage $0.7 B

� Genesis (FPL-NextEra): 250 MW Trough $0.7 B

� Mojave (Abengoa): 280 MW Trough $1.3 B

Total 1,312 MW $5.7 B

� Under Development: 7.5 GW

11


CSP: Sample Projects

Solar Two

• Built: 1996

• Location: Barstow, CA

• Developer: DOE, SCE

Capacity: 10 MWe

• Technology: molten-salt power tower

Solana

• Under Construction

• Location: Phoenix, AZ

• Developer: Abengoa Solar

Capacity: 280 MWe

• Technology: parabolic trough w/ 6 hours

storage

12


Wind Turbine Technology

• Blade acts much like an airplane wing, using “lift” to turn

blade

• Designed to turn into wind to capture most energy

• Blades turn shaft, which turns gears connected to generator

• Higher heights capture faster, less turbulent wind

• Generally divided into: nacelle; tower; and foundation

Rotor

Pitch

Rotation

Yaw

Adjusted to control rotation speed

and generated power

13


Sizes and Applications

Small (�10 kW)

Homes

Farms

Remote Applications

(e.g. water

pumping, telecom

sites, icemaking)

• Different sized turbines for different applications

• The majority of capacity currently installed is from large

systems

• Off-shore turbines are relatively new development

• More expensive installation & O&M

• Larger turbines with more reliable, stronger wind

Intermediate

(10-250 kW)

Village Power

Hybrid

Systems

Distributed

Power

Large (250 kW – 2+ MW)

Central Station Wind Farms

Distributed Power

14


Regional Potential of Wind

• The strongest wind resources in U.S. is in the middle of

the country

– Most of U.S. capacity is currently installed in that region

– Transmission needed to connect to large portions of population

15


Wind Installation Market

International Rankings of Wind Power Capacity

Annual Capacity

Cumulative Capacity

(2010, MW)

(end of 2010, MW)

China 18,928 China 44,781

U.S. 5,113 U.S. 40,267

India 2,139 Germany 27,364

Germany 1,551 Spain 20,300

U.K. 1,522 India 12,966

Spain 1,516 France 5,961

France 1,186 U.K. 5,862

Italy 948 Italy 5,793

Canada 690 Canada 4,011

Sweden 604 Portugal 3,837

Rest of World 5,205 Rest of World 28,371

TOTAL 39,402 TOTAL 199,513

Capacity (GW)

12

10

8

6

4

2

0

Annual Growth in Wind Power Capacity

PTC lapses

Fin. crisis,

lower

demand,

cheaper

nat. gas.

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

• U.S. is one of the leading markets for wind turbine installation

• In 2010 was supplanted from top spot by China which installed over 3x the

capacity of U.S.

• 47 GW installed in U.S. through 2011

• Majority of capacity has been installed in past 5 years

• Vulnerable to loss of Federal incentives

• PTC currently expires at end of 2012

16


Sample Wind Project

Lakefield Wind Project, MN

Capacity: 205.5 MW

– 137 GE 1.5 MW turbines

• Installed in 2011 (11 month build)

• 20 year PPA between EnXco (developer) and IPL (offtaker)

• Financed through leveraged lease with Union Bank & Metlife

Source: Renewable Energy Magazine, 10/18/11

17


How Geothermal Electricity Generation Works

Turbine & Generator

Source and more information at : DOE Geothermal Technologies Program, “How a

Geothermal Plant Works (Simple)” at

http://www1.eere.energy.gov/geothermal/gpp_animation.html

18


Geothermal Electricity Generation in the U.S. in 2011

�3,187 MW installed in US

•97% in CA and Nevada

•5 new/expanded plants in 2011 (91 MW)

�147 confirmed projects under

development in US

Capacity of ~4,116 – 4,525 MW under

development

•Project development activity in 13 states

outside of CA and NV (Source: GEA)

�Very limited number of operating

geothermal rigs in US (approx. 6-10)

•Estimates of +1900 for onshore oil and

gas (not including horizontal drilling)

US Geothermal Hydrothermal Resource

Source: NREL Dynamic Maps, Geothermal

Source: DOE Geothermal Technologies Program, “Geothermal Technologies Program Annual Peer Review ” at

http://www1.eere.energy.gov/geothermal/pdfs/gtp_2012peerreview_dhollett.pdf

and Geothermal Energy Association (GEA), “Annual US Geothermal Power Production and Development

Report” at http://geoenergy.org/reports/2012AnnualUSGeothermalPowerProductionandDevelopmentReport_Final.pdf

19


Sample Geothermal Project

The Geysers, CA

Capacity: 1.5 GW

– 18 separate power plants

– 50% of U.S. installed capacity

• First electric generation from site: 1960

– Reached peak capacity in 1987

• Owned by several companies

– Calpine owns 15 of the power plants

• Future Geothermal development in U.S. will most likely use different

technology

– Geysers produce very high-temperature steam

– Other geothermal technologies use heat exchanger to boil fluids that vaporize at

lower temperatures

Sources: Calpine corporate website, www.geysers.com. http://www.power-technology.com/projects/the-geysers-geothermal-california/

20


Thank You

David Feldman

Solar Technology Financial Analyst

National Renewable Energy Laboratory

202-488-2231

david.feldman@nrel.gov

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