1 Enhancing the Role of Renewable Energy in California Robert A. Laurie Commissioner California Energy Commission Geothermal Resources Council Annual Meeting.

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Enhancing the Role ofRenewable Energy in California

Robert A. LaurieCommissioner

California Energy Commission

Geothermal Resources Council Annual Meeting

September 2000

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The Energy Commission is the energy policy and information advisor to the California governor and legislature

The agency implements state energy policies while promoting a reliable energy supply at affordable prices for California

California Energy Commission

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Major Functions of the California Energy Commission

Gather and analyze energy data

Forecast energy supply and demand

License large power plants

Promote energy efficiency

Advance energy technologies

Promote renewable energy markets

Plan for and direct response to energy emergencies

Enhance energy export opportunities

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35,000

40,000

45,000

50,000

55,000

60,000

2000 2001 2002 2003

MegawattsFuture Curtailable Load ?

Curtailable Load

Net Imports

Net New Additions

Existing Generation

1 in 40 Year Peak Demand

1 in 5 Year Peak Demand

1 in 2 Year Peak Demand

Existing generation excludes2,500 MW for outages

Electricity Supply & Demand Balance

(7% Operating Reserve at Coincident Peak)

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California's 1998 Net System Power

Coal20%

Large Hydroelectric

22%Natural Gas

31%

Nuclear16%

Other0%Eligible

Renewables:11%

California’s 1998 Net System Power

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ELECTRICITY SOURCES

Twenty five percent of the state’s electricity comesfrom out-of-state generation

California Power Plant

Projects

(As of September 2000)

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Barriers to Proposed Power Plants

Availability of water for cooling power plants

Air quality standards and emissions from power plants

Supply of natural gas Local opposition Transmission constraints & system stability

needs

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Renewables in California

About 12% of California’s electricity supply in 2000

California has added 790 MW of renewable plants to the system since 1990

Geothermal comprises about 5% of state’s total electricity production

State support for geothermal is provided through the Public Interest Energy Research Program, the Renewable Energy Program, and the Geothermal Grant Program

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Renewable Energy Program Also funded from Public Goods Charge established

by AB 1890 $540 million over four years to support existing, new,

and emerging renewable technologies Three of the program’s five “accounts“ offer

incentives for the production or purchase of geothermal energy: Existing ($243 million) New ($162 million) Customer Credit Account ($75.6 million)

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Renewable Energy Program

Existing Account

Pays cents/kWh production incentives (capped at 1.5 cents/kWh) to renewable generators on-line before 9-96

259 existing renewable facilities (more than 4,000 MW) have received more than $130 million in incentives

36 geothermal facilities totaling 1,200 MW have received nearly $13 million (about 10%)

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Renewable Energy Program

New Account

Pays production incentives (capped at 1.5 cents/kWh) to generators on-line after 9-96

Auction to allocate funds held June 1998 55 winning bidders (500 MW) included 4 geothermal

facilities (157 MW) that were awarded over $80 million

Incentive not paid until projects are built and operating

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Renewable Energy Program

Customer Credit Account

Provides ¢/kWh rebates (capped at 1.5 ¢/kWh) to customers for the purchase of renewable energy

More than $33 million paid in rebates About 80% of customer rebates is attributable to

geothermal sales

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PIER Program

Funded from Public Goods Charge established by AB 1890

$62.5 million annually for “public interest" energy RD&D efforts

Renewable energy one of five subject areas in the PIER portfolio

Three solicitations in 1997 and 1998 committed nearly $51 million to 82 different projects in the five subject areas

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Geothermal Grant Program

Funded through Geothermal Resources Development Account (GRDA)

Promotes RD&D of geothermal energy in California through co-funding and technical assistance

Current projects include the Geysers Pipeline and Southeast Geysers projects to carry treated wastewater from treatment plant for reinjection, resulting in increased steam supply at existing geothermal plants

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New Developments

Late 2000 - PIER will release a Renewables Affordability Solicitation. Amount of available funds is yet to be determined.

Spring 2001 - Geothermal Grant Program will release solicitation for $2.8 million in GRDA funds for geothermal-related projects

Renewable Energy Program may hold a second auction for new renewable resources that can come on-line by June 2001. Amount of available funds is yet to be determined.

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Future of Renewables

Less than half of the state’s potential renewable capacity has been developed

New renewable generation needed to satisfy the growing green market and help alleviate the state’s current electricity supply shortage

AB 995 (currently before the Governor) extends funding for 10 years for both renewables ($135 million/year) and public interest R&D ($62.5 million/year)

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In Closing Through PIER, the Geothermal Grant Program, and the

Renewable Energy Program, the Energy Commission will continue to pursue its goals of: Improving cost-competitiveness of renewable technologies

through reduction of high life cycle costs and enhanced productivity

Helping to develop a self-sustaining renewable industry Encouraging market-based development of new renewable

resources Maintaining the benefits and diversity of the existing

renewables industry while helping the transition to a fully competitive market