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US DOE
Market and Regulatory Issues in Alternative Energy and LouisianaAlternative Energy and Louisiana Initiatives
2008 Statewide Clean Cities Coalition Conference: Making Sense of Alternative Fuels and Advanced Technology
March 27, 2008David E. DismukesC t f E St di
1
Center for Energy StudiesLouisiana State University
Overview ofAlternative Energy Generationgy
2
U.S. Energy Consumption by Source
Transportation, 5%
40
45
25
30
35
n B
tu
Electric Power95%
10
15
20
Qua
drill
ion
0
5
Coal Natural Gas Petroleum Nuclear RenewableEnergy
3
Energy
Source: Energy Information Administration, US Department of Energy
Louisiana Renewable Fuels Standardand Renewable Portfolio Standard
MMBtu
Required by Renewable Fuel Standard (2%) 5,978,921
Required by 10% Renewable Portfolio Standard 31,023,816 Required by 20% Renewable Portfolio Standard 62,047,632
4Source: Energy Information Administration, US Department of Energy
Louisiana Renewable Fuels Standardand Renewable Portfolio Standard
5% Premium 10% Premium 15% Premium( illi $)
Required by Renewable Fuel Standard (2%) 6.03$ 12.07$ 18.10$
Required by 10% Renewable Portfolio Standard 37.73$ 75.47$ 113.20$
--------------- (million $) ---------------
q y $ $ $Required by 20% Renewable Portfolio Standard 75.47$ 150.93$ 226.40$
5Source: Energy Information Administration, US Department of Energy
Types of Alternative Energy Generation
Hydroelectric
US DOEUS DOE
Wave Energy
US DOE
Biomass / BiogasHydroelectric Wave EnergyBiomass / Biogas
US DOE
lbl.govlbl.gov
US DOEUS DOE
SolarGeothermal Wind
6
SolarGeothermal Wind
Renewable Energy Technologies
RenewableEnergy Source Generation Technology
S l Ph t lt iSolar PhotovoltaicThermal Energy Capture
Wind Wind Turbines
Water Hydroelectric TurbinesWater Hydroelectric Turbines
Ocean Wave Energy DevicesTidal/Current Energy TurbinesThermal Energy Conversion
Geothermal Steam TurbinesDirect UseGeothermal Heat Pumps
Biomass Combustion (direct fired, co-firingwith coalGasification / Pyrolysis
Biogas Engine generatorsCombustion turbines
7
MicroturbinesFuel cells
Renewable ElectricityGeneration as a Share of Total US
Renewable energy has fallen as a share of total U.S. power generation.
12.0%
13.0%
10.0%
11.0%
t of T
otal
8.0%
9.0%
Per
cent
6.0%
7.0%
1989 1991 1993 1995 1997 1999 2001 2003 2005
8Source: Energy Information Administration, US Department of Energy
1989 1991 1993 1995 1997 1999 2001 2003 2005
Electricity Net Generationfrom Renewable Energy
Current trends in renewable energy have been flat over the past several years and dominated by hydroelectric generation.
350
400
200
250
300
on k
Wh
100
150
200
SolarWindGeothermal
Bill
io
0
50
2000 2001 2002 2003 2004 2005
GeothermalBiomassHydroelectric
9
2000 2001 2002 2003 2004 2005
Source: Energy Information Administration, US Department of Energy
Non-hydroelectric Renewable ElectricityGeneration as a Share of Total US
Non-hydroelectric renewable energy has increased as a share of total U.S. power generation.U.S. power generation.
1.6%
1.8%
1 2%
1.4%
t of T
otal
1.0%
1.2%
Per
cent
0.6%
0.8%
1989 1991 1993 1995 1997 1999 2001 2003 2005
10Source: Energy Information Administration, US Department of Energy
1989 1991 1993 1995 1997 1999 2001 2003 2005
Non-hydroelectric Renewable ElectricityGeneration as a Share of Total US
Wind energy is rapidly become the renewable energy resource of choice at the margin.
1.4%
1.6%
1.8% Wood Waste Geothermal Solar Wind
0 8%
1.0%
1.2%
ent o
f Tot
al
0.4%
0.6%
0.8%
Per
ce
0.0%
0.2%
1989 1991 1993 1995 1997 1999 2001 2003 2005
11Source: Energy Information Administration, US Department of Energy
Top 15 Statesfor Alternative Power Generation, 2003
California leads the nation in renewable energy primarily because of its large geothermal resource.
20
25Wood / Wood WasteWindS l
15
SolarOther BiomassMSW / Landfill GasGeothermal
on k
Wh Leading wind producer
5
10Bill
io
0CA FL TX ME AL GA LA PA MI VA NY MN WA MA NC
12Note: This excludes conventional hydroelectric generation.Source: Energy Information Administration, US Department of Energy
Projected Alternative Energy Generation
Alternative energy is expected to increase significantly in the next 25 years.Solar leads on percentage basis; wind leads on absolute basis.
200
250
G h l 0%
Percent increase from2005 to 2030:
150
200
kWh
Geothermal: 50%
Wind: 255%
Solar: 717%
50
100Bill
ion
Biomass: 169%
0
50
2005 2010 2015 2020 2025 2030
MSW: 19%
13
2005 2010 2015 2020 2025 2030
Municipal Waste Biomass Wind Solar Geothermal
Source: Energy Information Administration, Department of Energy
Mechanisms Facilitating Development
• Voluntary Markets for Alternative Energy: renewable energy attributes are now assigned property rights and can be traded.
• Power System Bypass: interesting getting off the grid.
• Federal Tax Credits: several statutes offering tax incentivesFederal Tax Credits: several statutes offering tax incentives.
• Renewable Portfolio Standards: state-level renewable generation mandates.
14
Policy Mechanismsfor Alternative Energygy
15
What is an RPS?
A renewable portfolio standard (RPS) is a state li th t i l t i it id t bt ipolicy that requires electricity providers to obtain a
minimum percentage of their power from renewable energy resources by a certain date. gy y
16
States with Renewable Portfolio Standards
Currently there are 20 states that have RPS policies in place. Together these states Cu e t y t e e a e 0 states t at a e S po c es p ace oget e t ese statesaccount for more than 42% of the electricity sales in the US.
MEVT Goal:ll
NH: 11.8%by 2013
MT: 15%
MT: 15%by 2020
30%all new gen10% cap
WI: 10%by 2015
by 2015 MN: 10%by 2015
NY24% by
2013
MI: 15%by 2015
MA: 4%by 2009
RI: 16%
IA: 105 MWNV: 20%by 2015
(5% solar) NM: 10%by 2015 MO:
IL: 8%by 2013
VA: 20%
PA: 8/10%Tier I/IIby 2020
NJ: 22.5%by 2021
CT: 10%by 2010
RI: 16%by 2020
CA: 20%by 2010
AZ: 15%by 2025
NM: 10%by 2011
(4% solar) 10%by 2020
NC: 10% by 2016
VA: 20%by 2015
MD: 7.5%by 2019
DE: 10%by 2019
by 2021
TX: 5,880 MWby 2015 (5%)
GA: TBD
IN: 10%
States with RPS
States with RPS Goals
17Source: Database of State Incentives for Renewable Energy, Interstate Renewable Energy Council.
Note: In Florida and Missouri the RPS is not statewide. In Illinois and Vermont the RPS is a “goal”.
IN: 10%by 2016States considering RPS
What is a REC?
“Renewable Energy Certificates” (RECs) also known as “green tags” orRenewable Energy Certificates (RECs), also known as green tags or “Tradable Renewable Certificates” (TRCs), are the property rights to the environmental benefits from generating electric from renewable energy sources.
These certificates can be sold and traded and the owner of the REC can legally claim to have purchased renewable energyclaim to have purchased renewable energy.
Thought of as “market-based” approach to promoting renewable energy.
18
Wholesale REC Transactions
19Source: nativeenergy.com
Ongoing Challengesfor Alternative Energy Developmentgy p
20
Ongoing Challengesfor Alternative Energy Development
• Cost Issues: what will be the nature of ongoing cost trends in light of past performance.past performance.
• Dispatch / Availability Issues: Ongoing challenges for renewable energy for both short term dispatch and long term planning.gy p g p g
• REC Property Right Issues: Who owns environmental attributes of existing resources contracted to utilities.
• Regulatory / Contracting Issues: What role does regulatory uncertainty play in the process.
• Regional Technical Capabilities: National markets are efficient, but lead to regional winners and losers.
21
How Does This Relate to Louisiana?
22
Mechanisms that SupportRenewable/Alternative Energy in Louisiana
• Requires utilities to purchase electricity from industrial facilities that have high efficiency power
PURPA QF Requirements high efficiency power
production. (also RE sources)
Requirements
• Program that purchases dedicated Green
Pricing
purchases dedicated amounts of renewable energy on customers’ behalf. Customers pay surcharge to support.
• Requires utilities to install meters that charge
Net Metering
install meters that charge and credit for purchases AND sales of on-site energy production.
23
Commonly Cited Renewable EnergyApplications for Louisiana
• Biofuels (ethanol, biodiesel)
• Biomass Generation
• Offshore Wind
• River and Tidal Power24
• River and Tidal Power
Louisiana Renewable Net Generation
C ti l
Total Louisiana
ConventionalHydroelectric
28%
Wood / Wood Waste
68% Other Biomass4%Other Biomass
4%Other Biomass
3%
ConventionalHydroelectric
28%
Wood / Wood Waste
97%
25
Commercial andIndustrial SectorUtility Sector
Vidalia Hydro
• Largest prefabricated power plant in the world .• 192 MW generating station.• Cost $354 million.
• Plant structure was prefabricated at Avondale Shipyards in New Orleans and was floated 208 miles upriver to its final destination.
• Up to 170,000 cubic feet per second of water flows through 8 massive hydraulic turbines (which were fabricated in England and Sweden).
• Engineers, designers and manufacturing workers from 16 countries and 24 states were involved in the construction.
• Developed jointly by the Catalyst-Vidalia Corporation and Dominion Capital, Inc, which formed a partnership, the Louisiana Hydroelectric Limited Partnership in conjunction with co-
26
Limited Partnership, in conjunction with co-licensee, the Town of Vidalia
Agrielectric
• Agrilectric owns and operates a 13 MW facility.
• Located adjacent to a rice mill near LakeLocated adjacent to a rice mill near Lake Charles.
• Generates green power by burning rice hulls (300 tons per day).(300 tons per day).
• Built in 1984 and is a Qualifying Facility under PURPA.
• It supplies power to the adjacent rice mill and excess power is sold to the utility at avoided cost.
27
Louisiana Green FuelsEthanol Project
• Located in Lacassine, next to facility that processes sugar cane and sweet sorghum
• Capacity: 22 4 million gallon per year fuel• Capacity: 22.4 million gallon per year, fuel alcohol
• Startup Target: 2009
• Will be first sugar cane-based ethanol plant in U.S.
28
Proposed River Turbine
29Source: Free Flow Power Corporation.
Schematic: River Bend Turbine Configuration
30Source: Free Flow Power Corporation.
Schematic: Bridge InstalledRiver Turbine
31Source: Free Flow Power Corporation.
Example: Free Flow Power Corp. Hydro Applications Before the FERC
States Projects Turbines Average Generation j g
LA 30 60,650 606.5 MW
LA / MS 6 20,950 209.5 MW,
AR / MS 5 22,550 225.5 MW
AR / TN 4 18,100 181.0 MWAR / TN 4 18,100 181.0 MW
TN / MO 2 6,250 62.5 MW
MO / KY 4 13 750 137 5 MWMO / KY 4 13,750 137.5 MW
MO / IL 8 17,100 171.0 MW
Total: 59 159 350 1 593 5 MW
32
Total: 59 159,350 1,593.5 MW
Source: Free Flow Power Corporation.
Other Alternative Energy Opportunities
• Gasification
• Waste Heat
• Combined Heat and Power
33
Gasification-Based System Concepts
Syngas
Gasifer Fuels
Gas Stream Cleanup/Component Separation
y gCO2/H2
Coal
Gaseous ParticulatesH2
Chemicals
H2Sulfur/
Sulfuric Acid
Biomass
PetroleumCoke
Feedstock
S lid
Constituents
Fuel Cell
Transportation Fuels
Combustion Turbine
Coke
Waste
Solids
Electric PowerASU
AirOxygen
MarketableSolid Byproducts
ASU Air
Steam
Exhaust
Exhaust
Water
Stack
Steam Turbine Electric Power
CO2
Source: Gasification Technologies Council 34
Several Project Outputs Made Available to Louisiana Energy & Chemical Markets
Hydrogen will be available to refineriesrefineries
SNG will be available to electric and natural gas utilities and industrial users
Steam will be available to industrial users
Pure CO produced by the unit will bePure CO2 produced by the unit will be available for enhanced oil recovery.
35
Recovered Energy Generation
36Source: Ormat Technologies
Geopressured basins of the United States(modified after Wallace, 1982)
Source: Louisiana State University, Louisiana Geological Survey
Location of Wells Selected for Testing Under theDOE Geopressured-Geothermal Research Program
Source: Louisiana State University, Louisiana Geological Survey Note: Ccourtesy of U.S. Department of Energy’s Geothermal Program
Summary of Test Results from the Geopressured-GeothermalWells Tested under the DOE program
(John et al., 1998).
Source: Louisiana State University, Louisiana Geological Survey
Potential Applications of theGeopressured-Geothermal Resource
(modified after Negus-de Wys and Dorfman, 1990)
Source: Louisiana State University, Louisiana Geological Survey
