Energy_Bill_Incentives_Overview - Luis Bernal
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8/8/2019 Energy_Bill_Incentives_Overview - Luis Bernal
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ING. ALEXIS J. MIRANDA RAMIREZ
Associate Director
ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
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Agenda
ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Agenda
Energy Bill – Renewable Portfolio Standard
– Renewable Energy Certificates
– Green Energy Fund
Law #73 – Wheeling
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Agenda
ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Energy Bill
• Act # 82 July 19th, 2010 – Also known as“Renewable Portfolio Standard (RPS)”
• Enforce the generation of electricity from renewable energysources, hence promotes diversification of the energy mixand reduction of dependency on fossil fuels.
• Establishes minimum targets for of renewable energygeneration in P.R.
• Implement a Renewable Energy Credits (RECs) system
Year(s) Target
(% Renewable Energy Production)
2015 12%2020 15%
2035 20%
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ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Renewable Energy Portfolio (RPS)
– The Renewable Energy Portfolio (or Renewable Portfolio Standard-RPF) is a legal energy
policy that requires an increment in renewable energy production through the use ofwind, solar, biomass and geothermic among others
– This diversification will reduce Puerto Rico’s oil dependency
• Diversification Helps reduce and stabilize electricity prices
– 29 states and the District of Columbia have implemented an RPS
• Diversification is the Key to Reduce Energy Price
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Agenda
ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Green Energy
As defined by the Energy Bill, Green
Energy is: – Alternate Renewable Energy
• Energy from Waste (MSW)
• Landfill gas combustion
•
Anaerobic digestion• Any other source as defined by EAA
– Sustainable Renewable Energy
• Solar- Photovoltaic and/or Solar-Thermal
•
Wind• Geothermal and Ocean Energy
• Renewable biomass combustion, combustion of renewablebiomass gas or combustion of biofuels
• Qualified Hydropower
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Agenda
ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Green Energy
• Renewable Biomass
– Organic or organisms biological byproducts with a power generation potential.
• Wood feedstock
• Natural biomass
• Alcohol byproducts
• Residual biomass- generated from agricultural
activities
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ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Renewable Energy Credits
– Puerto Rico will adopt a Renewable Energy Credit system
– REC – a certificate considered as an instrument with economic valuethat can be bought, sold or transferred between persons and thatrepresents the equivalent of one (1) MWh of electricity generatedfrom a renewable energy or alternate renewable energy source
• Creation of Renewable Energy Credits (RECs)
77
ConventionalGeneration
Renewable EnergyGeneration
ElectricityElectricity
1 Product 2 Products
REC
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ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Renewable Energy Certificates
– RECs will be registered in the North American Renewable Registry. This will
facilitate the marketability of RECs – RECs could be marketable either on compliance or voluntary markets.
– RECs have their own economic value and they are marketable in the UnitedStates. Entities required to comply with an RPS from the other 29+ states or companies with corporate social responsibility could buy PR’s RECs.
• Production Incentives based on RECs
8
Renewable
EnergyGeneration
Data isprocessed
andvalidated
Anelectronic
REC iscreated
Productiondata is sent
to the registry
The REC isdeposited
on theproducersaccount
1 2 3 4 5
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Agenda
ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Energy Bill
• Act #83 July 19th, 2010 0 Also known as “GreenEnergy Fund”
• All financial incentives will be granted by a special fundcalled Green Energy Fund, an investment fund for futuregenerations
• Will promote and develop a new and robust green industry,and create thousand of green jobs.
• $290 Millons within the next 10 years
• Green Energy Fund will apart from the General Fund.
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ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Green Energy Fund
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– Starting as on FY 2011-2012, funds will be collected from motor vehicles tax consistent with Sec. 2011 of the Internal Revenue Code
of PR.
– These funds will be received by the Dept. of Treasury (DT) and usedfor the purposes described in this Act, as it follows:
• Green Energy Fund (GEF) Creation
Fiscal Year Funds
2011-2012 $20,000,000
2012-2013 $20,000,000
2013-2014 $25,000,000
2014-2015 $30,000,000
2015-2016 $35,000,000
2016-2020 $40,000,000
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ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Green Energy Fund
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– Any business dedicated to the production or selling of green energyat a commercial scale for its consumption within PR. (Owner and/Operator are both considered as business dedicated to eligibleactivities)
– Green Energy Producer, as per definition provided in Art. 1.4
– Green Energy Generation Equipment Assembly, including installationof equipment in user’s facilities for Green Energy Production.
– Property dedicated to the production of green energy.
• Eligible Activities
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ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Green Energy Fund
Rebate Programs for Green Energy Investment (Art. 2.8)
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Utility Scale
• Considerably reduces oil dependency, creates an economic stimulus and green jobs are created
• Project size: 1 MW+
• Market: Independent Power Producer • Incentive: Access to the RECs market
Medium Scale
• Establishes a dynamic market that will attract new investments in the
manufacturing of renewable energy equipments• Project size:100 kW + —1 MW• Market: Industrial and Commercial• Incentive: Up to 50% in reimbursements (GEF)
Small Scale
• Allow individuals and small companies have more control over energy prices thus
reducing expenses and increasing available incomes• Project size: 0 — 100 kW
• Market: Residential & Small Businesses• Incentive: Up to 60% in reimbursements (GEF)
Tier 3
Tier 1
Tier 2
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ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Green Energy Fund
– Furthermore, the Energy Bill creates a special tax exemption for companies with
the primary purpose of renewable energy generation. – These companies will have the advantage similar to those in Act 73 of 2008:
1. A fixed tax of 4%
2. A reduction on the property and municipal tax
–
In addition, the lifespam of the decrees will be of 25 years which is consistent withthe expected life of a renewable energy equipment and their commercialagreements (e.g. PPAs)
• Tax Exemption
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Life of equipment:
25 years
Tax Decree: 25
years
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ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Green Energy Fund
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– Would be considered as capital gains for taxing purposes but wouldnot be considered as capital asset.
– Acquired RECs would not pay municipal taxes
– Would have a value for 2 years upon issuance.
• Renewable Energy Certificates
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Agenda
ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Wheeling – Implied Cost per
kWh
** Schedule 10 (Backup & Supplemental
Service) still not considered in price** TBD
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Agenda
ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Wheeling – Implied Cost per
kWh
** Schedule 10 (Backup & Supplemental
Service) still not considered in price** TBD
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Agenda
ENERGY AFFAIRS ADMINISTRATION
Government of Puerto Rico
Information Resources
• We invite you to visit the following
website for more info: – http://www.aae.gobierno.pr/
• For acquiring the new laws please visit:
– http://www.oslpr.org/buscar/
Contact Info:
– lbernal@aae.pr .gov• Luis Bernal-Jimenez, Esq. – Executive Director
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