U.S. Renewable Energy Market And Growth
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Prepared for the German Federal Ministry for the Environment, October 2009.

Prepared for the German Federal Ministry for the Environment, October 2009.

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U.S. Renewable Energy Market And Growth U.S. Renewable Energy Market And Growth Presentation Transcript

  • Renewable Energy in the United States: Resources, Market Growth and Policy Matthew J. Stamatoff Brooke Heaton Berlin, Germany December 1, 2009 Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • “To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years…We will double our capacity to generate alternative sources of energy like wind, solar, and biofuels…“ - President Barack Obama, Jan 8, 2009 Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Presentation Overview: Part I Brooke Heaton US Energy Market and Renewable Energy Resources Current Energy Consumption Current Energy Mix Solar, Wind, Biomass and Geothermal US Renewable Energy Market Growth State-Level Policy Tools Renewable Portfolio Standards (RPS), Tax Incentives, Rebates, Loans and Grants Interstate Cooperation – WREZ Initiative Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Current US Energy Consumption and Energy Mix Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Annual Per Capita Energy Consumption 2005 (kgoe) 9000 7885 8000 7000 6000 5000 4187 4000 3000 2000 1778 1000 0 pe ly na ya ld n es p a y nd a co om n en e a di an ad pa Re I ta or ti o el or n ro i at la i ed Ch In ex gd zu Ke ap n m Ja W ra St Eu Po ch Ca Sw M er ne n ng de d e Ki G te Ve Cz Si Fe d i Un te an i Un si s Ru (Data Source: WRI 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • US Greenhouse Gas Emissions by Sector (TG CO Eq) 2 3.000 2.500 2.000 Electricity Generation Transportation Industrial 1.500 Residential Agriculture 1.000 Commercial 500 0 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 (Data Source: US EPA)
  • Energy Consumption - Coal (Source: National Public Radio 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Energy Consumption - Gas (Source: National Public Radio 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Energy Consumption - Nuclear (Source: National Public Radio 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Energy Consumption - Hydro (Source: National Public Radio 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • US Transmission Lines (345 kV+) Wind Demand Solar (Source: National Public Radio 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • US Energy Mix (Source: Energy Information Administration: „Renewable Energy Consumption and Electricity Preliminary Statistics 2008, Table 1“: Published June 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Sources of Electric Energy Nuclear Power 21% Coal Renewable Energy 9% 52% Natural Gas Petroleum 1% 17% (Source: Energy Information Administration, Annual Energy Review, Figure 2.0, 2008) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Sources of Transport Energy Natural Gas 2% Petroleum 95% Renewable Energy 3% (Source: Energy Information Administration, Annual Energy Review, Figure 2.0, 2008) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Sources of Industrial Energy Coal Natural Gas 9% 40% Renewable Energy 10% Petroleum 41% (Source: Energy Information Administration, Annual Energy Review, Figure 2.0, 2008) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Sources of Residential and Commercial Energy Coal Natural Gas 1% 76% Renewable Energy 7% Petroleum 16% (Source: Energy Information Administration, Annual Energy Review, Figure 2.0, 2008) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Renewable Energy Capacities (2008) 120 Geothermal 100 Solar PV Biomass 80 Small hydro Wind Gigawatts 60 40 20 0 EU-27 China United States Germany Spain India Japan (Source: REN21, Renewables Global Status Report 2009 Update) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Solar, Wind, Biomass and Geothermal Resources Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • (Source: National Renewable Energy Lab 2008) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • (Source: National Renewable Energy Lab 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • (Source: National Renewable Energy Lab 2008) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • (Source: National Renewable Energy Lab 2008) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • US Renewable Energy Market Growth Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • US Renewable Energy Market Renewables contribute to 7% of total US energy demand and 9% of electricity 51% of renewable energy is used for electricity by electricity producers. Most of the remaining 49% is used for d industrial applications (principally paper industry) US is 2nd largest renewable energy producer in the world Current Electricity Generating Capacity of Renewable Sectors: □ Wind 31 GW □ Biomass 8 GW □ Solar PV 1100 MW □ Geothermal 3 GW □ Solar CSP 418 MW (Source: Energy Information Administration) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • 2008: Strong Advancements in the US RE Market Total Renewable Energy Capacity of 40 GW (2nd in world). Became leader in new capacity investment with $24 billion. Added more power capacity from renewables than from conventional sources (gas, coal, oil, and nuclear). Led in total wind power capacity with 25 GW, surpassing Germany (24 GW). Added over 8,5 GW of wind, 310 MW of PV, and 400 MW of CSP. (Source: REN21) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • US Renewable Electricity Capacity* 2006-2030 70,00 60,00 50,00 Production Capacity (GWh) 40,00 30,00 Offshore Wind 20,00 Solar Photovoltaic Solar Thermal/CSP Geothermal 10,00 Biomass Wind 0,00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Year *Electricity Only, Exludes Hydro (Data Source: Energy Information Administration) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • State-Level Policy Tools Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • State Renewable Portfolio Standards (RPS) RPS require a percentage of an electricity producer‘s total retail electricity sales to derive from renwable energy resources. 29 US states have established an RPS: California: 33% renewables by 2020 Utilities comply with this percentage target by purchasing certified Renewable Energy Credits (RECs)= 1 MWh of RE RECs may also be purchased voluntarily. The US voluntary market is larger than the mandatory market. RECs can be traded in the marketplace, are certified by independent NGO‘s, and tracked by regional tracking systems. RECs provide a market solution to promote RE, increase liquidity, break down geographic barriers and monetize renewable attributes. (Source: dsire.org) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Renewable Portfolio Standards 29 States have RPS, 6 have goals 40% by 2017 33% by 2020 State renewable portfolio standard State renewable portfolio goal (Source: dsire.org) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • State Tax Credits and Loans Corporate tax credits (25 states) Credits, deductions and exemptions provided to corporations that purchase and install eligible renewable energy or energy efficiency equipment, or to construct green buildings. Typically, there is a cap. Personal tax credits (22 states) Credits and deductions to individuals to reduce the expense of purchasing and installing residential renewable energy or energy efficiency systems and equipment. Property tax incentives (34 states) Provided by local tax authority in the form of exemptions, exclusions and credits. State Loans (45 states) Offered to the residential, commercial, industrial, transportation, public and nonprofit sectors to provide financing for the purchase of renewable energy or energy efficiency systems or equipment at below market interest rates. (Source: dsire.org) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • State Rebates and Grants Rebates (44 states) Offered by states, local governments and utilities to promote the installation of renewable energy systems and energy efficiency measures. Often provide funding for solar water heating and/or photovoltaic (PV) systems. Grants (27 states) Primarily available to commercial, industrial, utility, education and government sectors on a competitive basis. Most are designed to pay down the cost of eligible equipment, R&D, or project commercialization. (Source: dsire.org) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Western Renewable Energy Zones Cooperative program of Western Governors Association and DOE Includes all 11 Western Interconnect states plus Alberta and British Columbia Goals: Generate reliable information and political support to facilitate the construction of utility scale renewable energy facilities and transmission across the Western Interconnection. Build interstate cooperation to address major cost issues. Phase 1 Report finished June, 2009 (Source: WGA) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Western Renewable Energy Zones Cooperative program of Western Governors Association and DOE Includes all 11 Western Interconnect states plus Alberta and British Columbia Goals: Generate reliable information and political support to facilitate the construction of utility scale renewable energy facilities and transmission across the Western Interconnection. Build interstate cooperation to address major cost issues. Phase 1 Report finished June, 2009 (Source: WGA) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Presentation Overview: Part II by Matthew Stamatoff Current Federal Policies Driving RE Market ITC, PTC, P-ITC Challenges of US RET Tax Incentives American Recovery and Reinvestment Act (ARRA) 2009 Future Policy Developments (RES and Cap- and-Trade) Bingaman Bill (Senate) Waxman-Markey Bill, RES and Cap-and-Trade (House) Kerry-Boxer Bill, RES and Cap-and-Trade (Senate) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Investment Tax Credit (ITC) Corporate income tax credit 30% for solar, fuel cells and small wind (100 kW or less) 10% for geothermal, microturbines (2 MW or less) and CHP Maximum incentive for Fuel cells: $1,500 per 0.5 kW and Microturbines: $200 per kW Credits are available for systems placed in service on or before December 31, 2016 (extended by 8 yrs in 2008) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Production Tax Credit (PTC) Corporate income tax credit 2.1¢/kWh for wind, geothermal, closed- loop biomass 1.1¢/kWh Landfill Gas, Hydro-power, Municipal Solid Waste, Anaerobic Digestion, Ocean energy tech Wind technologies must be installed before December 31, 2012, all other technologies must be before December 31, 2013 In general, credits can be received for up to 10 years Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • PTC and Wind Sector Growth Source of graph (above): American Wind Energy Association (AWEA) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Personal Income Tax Credit (P-ITC) 30% personal income tax credit for solar technologies, wind, fuel cells and geothermal Used to be a cap on credit, now there is not a maximum credit (except for fuel cells $500 per .5 kW) ARRA 2009 removed the cap on credits Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Challenges of US RET Tax Incentives Extending PTC and ITC Uncertainty of extensions disrupts market growth Accelerated wind deployment in 2008 Small pool of Tax Equity Investors is getting smaller Developers do not have profile to take advantage of PTC or ITC Pool of Tax Equity Investors was 20 in 2008 and 6 in 20091 Low tax appetite 1. Renewable Energy Project Financing: Impacts of Financial Crisis and Federal Legislation (NREL, 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • American Recovery and Reinvestment Act (ARRA) 2009 & Tax Credits All eligible entities under the PTC, may now elect to take the ITC or receive a grant (ie. large- scale wind, anerobic digestion) All eligible entities under the ITC, may also elect to receive a grant Grant is a cash grant equivalent to 10% basis of property CHP, geothermal and microturbines. It is 30% cash grant for all other technologies. Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • ARRA 2009: Accelerated Depreciation & Loan Guarantees Extends bonus depreciation option 50% of project costs are depreciable in year 1; remaining 50% follows normal schedule Additional $6 billion for DOE loan guarantees Encourage debt financing in a credit tight market Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Source of Graph (above):Renewable Energy Project Financing: Impacts of Financial Crisis and Federal Legislation (NREL, July 2009) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • American Recovery and Reinvestment Act (ARRA) 2009 & Energy Programs Department of Energy (DOE) received $36.7 billion for energy programs. This funding includes such programs as: Smart grid grant program ($4.5 billion) Advanced battery manufacturing grants ($2 billion) Renewable energy loan guarantees ($6 billion) Expands weatherization program ($5 billion) Increases funding to State Energy Program ($3.1 billion) Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • S. 1462 American Clean Energy Act of 2009 (Sen. Bingaman, NM) Creates a Renewable Electricity Standard (RES) Percentage of utilities electricity must derive from energy efficiency or RE 3% in 2011-2013 6% in 2014-2016 9% in 2017-2018 12% in 2019-2020 15% in 2021-2039 Energy efficiency credits can contribute to 26.67% of requirement Percentages are not as significant as they appear; exemptions from base for municipal solid waste and new nuclear. New hydro is eligible, old hydro is exempt Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • H.R. 2454: American Clean Energy and Security Act of 2009 (Rep. Waxman, CA and Rep. Markey, MA) Creates a Renewable Electricity Standard (RES) Percentage of utilities electricity must derive from energy efficiency or RE 6% in 2012-2013 9.5% in 2014-2015 13% in 2016-2017 16.5% in 2018-2019 20% in 2020-2039 RES targets are more aggressive than S. 1462 Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • H.R. 2454: American Clean Energy and Security Act of 2009 (Rep. Waxman, CA and Rep. Markey, MA) Amends Clean Air Act (CAA) to reduce GHG emissions by: 3% of 2005 levels by 2012 17% by 2020 42% by 2030 83% by 2050 Regulates emissions from electricity sources, industrial sources, fuel producers and importers and other relevant emitters Establishes annual tonnage limit on GHG Creates allowances equivalent to one ton of GHG Creates an auction for allowances, establishing a carbon trading Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • S. 1733 Clean Energy Jobs and American Power Act (Sen Kerry, MA and Sen Boxer, CA) Amends Clean Air Act (CAA) to reduce GHG emissions by: 3% of 2005 levels by 2012 20% by 2020* 47% by 2030* 83% by 2050 *These target goals are more aggressive than H.R. 2454 Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Current Status of the US Energy Bills S. 1462 (Sen. Bingaman): Senate Committee on Energy and Natural Resources recommended bill for consideration by Senate (vote 15-8 on June 17, 2009) Bill was placed on Senate Calender (No. 110) H.R. 2454 (Rep. Waxman, Rep. Markey) Passed House on June 26, 2009 Roll call vote 219 Ayes, 212 Nays S. 1733 (Sen. Kerry, Sen. Boxer) Senate Committee of Environment and Public Works recommended bill for consideration by Senate as a whole Currently being debated by Senate Finance Committee Senator Webb (D-VA) and Senator Alexander (R- TN) Energy Act of 2009 recently introduced, Nov 2009 Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009
  • Thank you for your attention! Vielen Dank für Ihre Aufmerksamkeit! Kontaktinformationen Matthew Stamatoff MatthewJ.Stamatoff@bmu.bund.de Brooke Heaton Brooke.Heaton@bmu.bund.de BrookeHeaton@gmail.com Produced by Brooke Heaton and Matthew Stamatoff for the German Federal Ministry for the Environment, October 2009