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Clean, Local Energy
   with Community Choice Aggregation




                   John Farrell, Director
   Energy Self-Reliant States and Communities program
                      jfarrell@ilsr.org
                        612-808-0888
              Presentation on Feb. 10, 2012
ILSR’s Unique Perspective
  Yesterday                                         Tomorrow
 Centralized Power                                  Clean, local power
                                                                                 Solar PV
                                                                                power plant



                                                                   Storage   Storage
          Transmission network


                                                         Storage

                                                                               Storage
  House
                                       Local CHP plant

          Distribution network                                                                 House with
                                                                                              domestic CHP




                                                                             Wind
                                                                             power
Factory                   Commercial                                         plant
                           building
Centralized Power
CCAs Break Monopoly
CCAs Lower Rates
              NOPEC, OH - 4-6%




                            REAP, RI -
     Fulton, IL - 20%      $18m saved
   Oak Park, IL - 2¢/kWh   over 10 yrs
CCAs Green Electricity
    MEA, CA         NOPEC, OH - 50% more
up to 590% more




          Oak Park, IL - 400% more
Greater CCA Potential
should
CCAs Localize Electricity
                   ^
Local Ownership Boosts Impact of Renewables


            Absentee


            Local                         1.5x (low)

            Local                                                               3.4x (high)


                      Total Economic Impact
Economic Development Impacts of Community Wind Projects: A Review and Empirical Evaluation (NREL)
should
CCAs Localize Electricity
                 ^
Local Ownership Boosts Jobs from Renewables
            Solar


            Wind


             Coal


    Natural Gas

                     0          2          4           6          8          10

                           Jobs per Megawatt
                         Construction, manufacturing and installation
                         Ongoing maintenance and fuel
Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Create? (UC Berkeley)
should
CCAs Localize Electricity
           ^
Local Ownership Boosts Jobs from Renewables
        Solar


        Wind


        Coal


  Natural Gas

                0          2         4         6         8         10   12   14

                      Jobs per Megawatt
                    Construction, manufacturing and installation
                    Ongoing maintenance and fuel
should
    CCAs Localize Electricity
                       ^
    Local Ownership Boosts Support for Renewables

No local ownership          60% negative



   Local ownership                                   45% positive

                     0            25       50            75         100

            very negative       negative   neutral       positive   very positive


  Attitude towards increased use of local wind energy
should
CCAs do Feed-in Tariffs
         ^


• Long-term, standard contract
• Fixed price
• Grid connection*
should
CCAs do Feed-in Tariffs
         ^
       low risk = low cost
                    REC Market

Risk
                Auction


         FIT
                Return
should
 CCAs do Feed-in Tariffs
       ^
Avg. Cost of Solar (2011 3Q)
                             U.S.
                           $5.20/W

  Risk


          Germany
          $2.80/W


                  Return
should
             CCAs Support DG
                              ^
                            •avoided cost
10 cents
                            •on-site/near demand
                            •lower transmission losses
 5 cents                    •reduce dist. system stress
 0 cents                    •hedge against fuel prices
                            •prevent blackouts
 -5 cents                   •reduce pollution
-10 cents     $4/Watt       •create jobs
-15 cents                                      How the utility values
                                 4 cents
-20 cents
            Cost of solar     Energy value
                                              distributedSocial benefits
                                              Grid benefits
                                                            generation
DG Grid Benefits
                                       •avoided cost
10 cents
                                       •on-site/near demand
                                       •lower transmission losses
 5 cents                               •reduce dist. system stress
 0 cents                               •hedge against fuel prices
                                       •prevent blackouts
 -5 cents                              •reduce pollution
-10 cents        $4/Watt               •create jobs
                                                                              8.5 cents               But it’s
-15 cents
                                                 4 cents
                                                                                                     worth more
-20 cents
              Cost of solar                 Energy value                   Grid benefits                Social benefits




            Distributed Solar Power Worth Far More Than Electrons | Energy Self-Reliant States - http://tinyurl.com/3tqmerh
DG Social Benefits
                                       •avoided cost
10 cents
                                       •on-site/near demand
                                       •lower transmission losses
 5 cents                               •reduce dist. system stress
 0 cents                               •hedge against fuel prices
                                                                                                           12.5 cents
                                       •prevent blackouts
 -5 cents                              •reduce pollution
-10 cents        $4/Watt               •create jobs
-15 cents

-20 cents
              Cost of solar                 Energy value                   Grid benefits                Social benefits


                                                                                                        and more
            Distributed Solar Power Worth Far More Than Electrons | Energy Self-Reliant States - http://tinyurl.com/3tqmerh
How Munis Value DG
$0.15                      6 cents per kWh
$0.12
                            in addition to
                              electricity
$0.09


$0.06
                                Additional local value
                                Avoided transmission access
$0.03                           Environmental
                                Time-of-delivery
                                Brown energy replacement
  $0


        Palo Alto, CA, municipal utility
CCA Landscape




          Active CCAs
          No active CCAs
m o us
   or
En Clean Energy Potential
        31 states could be electricity self-reliant




                                                                          100% or more
                                                                          75 to 100%
                                                                          50 to 75%
                                                                          25 to 50%
                                                                          25% or less
                   Energy Self-Reliant States, 2nd Edition | ILSR, 2010
State Renewable Policy
 29 states have a clean energy mandate




                          Renewable mandate (29)
                          Renewable goal (8)
                          No RPS policy (13)
State Electricity Markets




                  Deregulated (13)
                  Suspended (7)
                  Regulated (30)
State Electricity Markets




                 Deregulated + CCA
                 Suspended + CCA
                 Regulated (30)
CCA Opportunities
                       “storm of interest”

“going Boulder”



            burst of activity
Thank you!




       John Farrell
         energyselfreliantstates.org
         jfarrell@ilsr.org
         johnffarrell
         612-808-0888

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Local Energy Choice with Community Choice Aggregation

  • 1. Clean, Local Energy with Community Choice Aggregation John Farrell, Director Energy Self-Reliant States and Communities program jfarrell@ilsr.org 612-808-0888 Presentation on Feb. 10, 2012
  • 2. ILSR’s Unique Perspective Yesterday Tomorrow Centralized Power Clean, local power Solar PV power plant Storage Storage Transmission network Storage Storage House Local CHP plant Distribution network House with domestic CHP Wind power Factory Commercial plant building
  • 5. CCAs Lower Rates NOPEC, OH - 4-6% REAP, RI - Fulton, IL - 20% $18m saved Oak Park, IL - 2¢/kWh over 10 yrs
  • 6. CCAs Green Electricity MEA, CA NOPEC, OH - 50% more up to 590% more Oak Park, IL - 400% more
  • 8. should CCAs Localize Electricity ^ Local Ownership Boosts Impact of Renewables Absentee Local 1.5x (low) Local 3.4x (high) Total Economic Impact Economic Development Impacts of Community Wind Projects: A Review and Empirical Evaluation (NREL)
  • 9. should CCAs Localize Electricity ^ Local Ownership Boosts Jobs from Renewables Solar Wind Coal Natural Gas 0 2 4 6 8 10 Jobs per Megawatt Construction, manufacturing and installation Ongoing maintenance and fuel Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Create? (UC Berkeley)
  • 10. should CCAs Localize Electricity ^ Local Ownership Boosts Jobs from Renewables Solar Wind Coal Natural Gas 0 2 4 6 8 10 12 14 Jobs per Megawatt Construction, manufacturing and installation Ongoing maintenance and fuel
  • 11. should CCAs Localize Electricity ^ Local Ownership Boosts Support for Renewables No local ownership 60% negative Local ownership 45% positive 0 25 50 75 100 very negative negative neutral positive very positive Attitude towards increased use of local wind energy
  • 12. should CCAs do Feed-in Tariffs ^ • Long-term, standard contract • Fixed price • Grid connection*
  • 13. should CCAs do Feed-in Tariffs ^ low risk = low cost REC Market Risk Auction FIT Return
  • 14. should CCAs do Feed-in Tariffs ^ Avg. Cost of Solar (2011 3Q) U.S. $5.20/W Risk Germany $2.80/W Return
  • 15. should CCAs Support DG ^ •avoided cost 10 cents •on-site/near demand •lower transmission losses 5 cents •reduce dist. system stress 0 cents •hedge against fuel prices •prevent blackouts -5 cents •reduce pollution -10 cents $4/Watt •create jobs -15 cents How the utility values 4 cents -20 cents Cost of solar Energy value distributedSocial benefits Grid benefits generation
  • 16. DG Grid Benefits •avoided cost 10 cents •on-site/near demand •lower transmission losses 5 cents •reduce dist. system stress 0 cents •hedge against fuel prices •prevent blackouts -5 cents •reduce pollution -10 cents $4/Watt •create jobs 8.5 cents But it’s -15 cents 4 cents worth more -20 cents Cost of solar Energy value Grid benefits Social benefits Distributed Solar Power Worth Far More Than Electrons | Energy Self-Reliant States - http://tinyurl.com/3tqmerh
  • 17. DG Social Benefits •avoided cost 10 cents •on-site/near demand •lower transmission losses 5 cents •reduce dist. system stress 0 cents •hedge against fuel prices 12.5 cents •prevent blackouts -5 cents •reduce pollution -10 cents $4/Watt •create jobs -15 cents -20 cents Cost of solar Energy value Grid benefits Social benefits and more Distributed Solar Power Worth Far More Than Electrons | Energy Self-Reliant States - http://tinyurl.com/3tqmerh
  • 18. How Munis Value DG $0.15 6 cents per kWh $0.12 in addition to electricity $0.09 $0.06 Additional local value Avoided transmission access $0.03 Environmental Time-of-delivery Brown energy replacement $0 Palo Alto, CA, municipal utility
  • 19. CCA Landscape Active CCAs No active CCAs
  • 20. m o us or En Clean Energy Potential 31 states could be electricity self-reliant 100% or more 75 to 100% 50 to 75% 25 to 50% 25% or less Energy Self-Reliant States, 2nd Edition | ILSR, 2010
  • 21. State Renewable Policy 29 states have a clean energy mandate Renewable mandate (29) Renewable goal (8) No RPS policy (13)
  • 22. State Electricity Markets Deregulated (13) Suspended (7) Regulated (30)
  • 23. State Electricity Markets Deregulated + CCA Suspended + CCA Regulated (30)
  • 24. CCA Opportunities “storm of interest” “going Boulder” burst of activity
  • 25. Thank you! John Farrell energyselfreliantstates.org jfarrell@ilsr.org johnffarrell 612-808-0888