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Feed-in Tariff Primer Feed-in tariffs are successful They have created rapid growth in new renewable generation They have created the most kilowatt- hours.

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Presentation on theme: "Feed-in Tariff Primer Feed-in tariffs are successful They have created rapid growth in new renewable generation They have created the most kilowatt- hours."— Presentation transcript:

1 Feed-in Tariff Primer Feed-in tariffs are successful They have created rapid growth in new renewable generation They have created the most kilowatt- hours of actual renewably-generated electricity of any policy They have proven successful in Germany, France, & Spain

2 Feed-in Tariff Primer Feed-in tarifs are adaptable to North America No intrinsic limitations to use in Canada or the United States No intrinsic limitations to use in States, Provinces, or at the Federal level Have been successfully used in both Ontario, Canada and California (early 1980s) Currently being considered in several US States & Canadian Provinces

3 Feed-in Tariff Primer Feed-in tariffs go by many names Advanced Renewable Tariffs A system of feed-in tariffs (prices or payments) for different technologies Renewable Energy Payments Because the tariffs are a payment per kilowatt- hour of electricity generated Standard Offer Contracts (Incorrect!) Feed-in tariffs use standard contracts but not standard offers as the offers differ by technology (one price for solar, another for wind)

4 Feed-in Tariff Primer Feed-in taiffs are more equitable Everyone can participate Homeowners, farmers, Native Americans, small & large businesses Payments not tax credits Participants do not have to be rich or have tax liability to participate Payments not subsidies for hardware Payments for electricity generated Payments are bankable

5 Feed-in Tariff Primer Feed-in tariffs are bankable Predictable revenues Enable traditional financing Tariffs are high enough to work Prices based on the cost of generation plus a reasonable profit Prices not based on value of electricity

6 Feed-in Tariff Primer Key program elements Priortity access to the grid for all Long contracts (20-25 years typical) Prices Differentiated By technology, size, application, and resource intensity (wind and now solar) Prices determined by cost plus profit Fair but not excessive profit Inflation protection Periodic Review (every 2-4 years)

7 Feed-in Tariff Primer Access to the grid Must be able to connect Connection must be simple, timely, and at reasonable cost

8 Feed-in Tariff Primer Priority purchase Renewable energy must be first priority Take or pay contracts Producer must be assured that the electricity they produce is purchased Only exception is system emergencies

9 Feed-in Tariff Primer Contract length 20 years or more Longer contracts = lower initial tariff Shorter contracts = higher initial tariffs Germany: 20 years Spain: 25 years to life of plant

10 Feed-in Tariff Primer Differentiated prices Differentiated by technlogy wind, solar, biomass, geothermal, hydro, etc. Differentiated by size higher prices for small projects lower prices for large projects Differentiated by application higher prices for rooftop solar lower prices for ground-mounted solar

11 Feed-in Tariff Primer Differentiated prices for wind energy Differentiated by resource intensity Lower prices for windy sites Higher prices for less windy sites Ensures nearly all can participate Landowners cant move to windier sites Limits excessive profits at windy sites Distributes development geographically Avoids concentrating wind development

12 Feed-in Tariff Primer Prices determined by cost Prices (tariffs) determined by cost Of generating electricity by each different technology, and Reasonable profit Determined by existing regulatory practice Fair but not excessive profit Prices are not based On the cost of conventional fuels, or On the avoided cost, or On the value of the electricity

13 Feed-in Tariff Primer Inflation Protection Protects invested capital Higher protection = lower initial tariffs Prices adjusted periodically For new projects Inside existing contracts Inflation indexing often less than 100% France & Spain: 50% to 70% indexing

14 Feed-in Tariff Primer Periodic Review Determines if program is robust Determines if targets being met Allows price adjustment If profits are too high If targets are not being met Allows addition of new technologies Every 2-4 years

15 Feed-in Tariff Primer Solar Growing with Feed-in Tariffs Major Solar PV Markets Germany--1,500+ MW/year Spain--500 MW/year Italy MW/yr Japan--250 MW/year California--200 MW/year Markets with Feed-in Tariffs Germany, Spain & Italy

16 Paul Gipe, wind-works.org World Solar PV Capacity 2008 ~13,000 MW

17 Renewable Tariffs & Solar Photovoltaics in Germany Paul Gipe, wind-works.org

18 Feed-in Tariff Primer Solar PV Success in Germany 500 MW on Home Rooftops/year 2,000 MW+ Total 2 TWh/yr ~ 1 Billion/yr Revenue Anyone with a Roof Can Do Solar in Germany! Because revenue stream is bankable 20007

19 Feed-in Tariff Primer Solar PV for German Homeowners 150,000 New Systems 6 Billion Total of 600,000 Systems in Operation ~1,500 MW in 2008! ~2,000 MW in 2009 (Estimated) Total 5,000 MW, 2008; 7,000 MW, 2009 ~2%Supply in Conservative Bavaria ~1%Supply in Germany 2007

20 Feed-in Tariff Primer Solar New Farm Crop in Germany 700 MW on Barn Roofs in 2008 Total of 1,500 MW in Operation ~9 Billion Invested by Farmers 1.5 TWh/year ~700 million/year Farm Revenue

21 Feed-in Tariff Primer European Wind Market Europe = 2/3 of World Wind Capacity Gemany, France & Spain = 2/3 of Europes Wind Capacity Top European Markets Germany, France & Spain All Three Use Feed-in Tariffs

22 Feed-in Tariff Primer Wind Growing with Feed-in Tariffs Germany : ~2,000 MW/year 30,000 MW by 2012 Spain : ~2,000 MW/year Germany 50% Community Owned ~20 billion from Small Investors Geographically Distributed 7% of Supply

23 Feed-in Tariff Primer Results of German Feed-in Tariffs Renewables 15% of Supply 12% of Supply from New Renewables Renewables 9.6% of Primary Energy 90,000 Employed in Wind Industry 50,000 Employed in PV Industry 8,000 Employed in Biogas Industry 280,000 Employed in Renewables 32 (~$50) Billion Turnover 2008

24 Cost of German EEG ~$50/yr/household Paul Gipe, wind-works.org

25 North American Jurisdictions with Modern Feed-in Tariffs Ontario, Canada First comprehensive system of feed-in tariffs in North America (2009) Vermont (2009)

26 Ontarios Advanced Renewable Tariffs Technology differentiation Solar, Wind, Hydro, Biomass, Biogas Size & application differentiation Solar: 5 classes Wind: On Land & Offshore Biogas: 5 classes Prices based on cost of generation Community & aboriginal bonus No program cap

27 Vermonts Feed-in Tariffs Technology differentiation Solar, Wind, Hydro, Biogas, Biomass Includes small wind tariff Prices based on cost of generation Modest program cap (50 MW) Limited project size cap (2.2 MW)

28 Hawaiis Proposed Feed-in Tariffs PUC rules in favor of feed-in tariffs Fall 2009 Technology differentiation Size differentiation Prices based on cost of generation Limited project size (5 MW) Final rules end of 2009

29 Feed-in Tariff Primer North American Experts Toby Couture, E3 Analytics, Karlynn Cory, NREL, John Farrell, Insitute for Local Self Reliance, x210 Wilson Rickerson, Rickerson Energy Strategies,

30 Feed-in Tariff Primer For More Information International feed-in tariff news group The Feed-in Tariff Channel


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