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Jeff Ackermann Colorado Energy Outlook June 26, 2013.

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Presentation on theme: "Jeff Ackermann Colorado Energy Outlook June 26, 2013."— Presentation transcript:

1 Jeff Ackermann Colorado Energy Outlook June 26, 2013

2 2 The Colorado Energy Office promotes sustainable economic development in Colorado through advancing the state’s energy market and industry to create jobs, increase energy security, lower long term consumer costs, and protect our environment. The Colorado Energy Office promotes sustainable economic development in Colorado through advancing the state’s energy market and industry to create jobs, increase energy security, lower long term consumer costs, and protect our environment. JOBSSECURITY COST ENVIRONMENT Vision Colorado Energy Office | © 2011 State of Colorado

3 CEO Program Overview Program Program Description Commercial Buildings Technical assistance, grants for energy efficiency retrofits Finance Revolving Loan Fund, Green Credit Reserve, QECB Residential Buildings Green MLS & Appraiser MOU Greening Govt./ EPC Decreasing public sector utility bills, financing EE retrofits Weatherization Energy efficiency assistance to low-income residents. Colorado Energy Office | © 2011 State of Colorado Transportation Fuels 16 state MOU to convert state fleets to CNG Charge Ahead Colorado (EVSE funding) Refuel Colorado (Promoting Alternative Fuels & Vehicles) 3

4 Colorado Oil and Gas Production since 1999 Oil production has grown 124% since 1999, a 6.4% CAGR Gas production has grown 83% since 1999, a 4.8% CAGR Oil production has grown 124% since 1999, a 6.4% CAGR Gas production has grown 83% since 1999, a 4.8% CAGR Colorado Energy Office | © 2011 State of Colorado 4

5 5 Colorado is a Net Importer of Oil, but a Net Exporter of Natural Gas Colorado Energy Office | © 2011 State of Colorado Note: 2012 state consumption numbers not yet published- extrapolated from 2011 U.S. consumption and 2011state share of U.S. consumption Oil and gas consumption: EIA SEDS Oil and gas production: COGCC

6 6 Natural Gas Vehicle Benefits CNG acts as a natural hedge in two ways By adding a new fuel to the state’s mix, creating less dependence on oil prices. ~32% of CNG price at the pump is commodity cost, versus 56% for gas/diesel. CNG acts as a natural hedge in two ways By adding a new fuel to the state’s mix, creating less dependence on oil prices. ~32% of CNG price at the pump is commodity cost, versus 56% for gas/diesel. Bottom line: it will save money FuelGasolineDieselCNG Price / GGE $3.87$4.09$2.09 Low fuel costs equate to long term savings and shorter payback timeframes Colorado Energy Office | © 2011 State of Colorado

7 7 Colorado's NGV Commitment Colorado Energy Office | © 2011 State of Colorado On November 9, 2011, Governor John Hickenlooper signed an MOU with the governor of OK to use CNG vehicles in the two states’ fleets. Since then, 14 other governors have signed on the MOU, committing to increased CNG vehicle usage.

8 8 Other Technologies Colorado Energy Office | © 2011 State of Colorado Biomass –NIMBYism: fear of air pollution. –Access and transportation. –Stewardship contracts limited to 10 years. Biofuels –Current generation is reaching “blendwalls” – the limits allowed in normal fuels – a sign of success. –Next generation needs R&D work

9 Source: Breakthrough Institute The Gap: Near-ready technologies - insufficient venture capital Too risky for traditional financing The Gap: Near-ready technologies - insufficient venture capital Too risky for traditional financing CEO’s Revolving Loan Fund (RLF) Dollars awarded Dollars Leveraged Jobs Created Energy Saved Colorado Energy Office | © 2011 State of Colorado 9

10 10Colorado Energy Office | © 2011 State of Colorado  No existing class of financing institution is effectively positioned to address this particular risk/return category.  This begs the question: what role should the public sector play in addressing this serious financing issue? Why the RLF? This represents a structural market failure that hasn’t been addressed by the private sector acting on its own

11 Appraiser MOU Commits the groups and CEO to work together to promote/document home energy features and develop studies to identify Colorado market-specific trends in energy valuation over time. Homeowners: less incentive to make energy improvements Real estate brokers: less likely to market green features mortgage lenders; may not lend more to cover the cost of an efficient home Potential buyers: less likely to put in a higher offer. Goal: understand impacts on home value of energy efficiency and renewable energy improvements. Issue: Appraisers unable to demonstrate a reliable market response to energy features. Governor signed with Colorado’s two major professional organizations: 1.Colorado Coalition of Appraisers 2.Appraisal Institute - CO Chapter Colorado Energy Office | © 2011 State of Colorado 11

12 Green MLS The Green MLS is an Energy Efficiency field in the MLS guide used by realtors. Enables home buyers to search for energy efficiency upgrades when buying and sellers to list them as added features. Colorado Energy Office | © 2011 State of Colorado 12

13 13 Where do the MLS Vendors Stand Today? 4% 2% 4% Need Additional Fields Have Not Adopted No Official Board or MLS Vendor* Colorado Energy Office | © 2011 State of Colorado 90% Adoption

14 15%30% (or more) 14Colorado Energy Office | © 2011 State of Colorado Typical Facility Energy Savings Opportunity: *Savings realized by increasing equipment and operational efficiency. The process through which energy efficiency and capital improvements are funded (fully or partially) by the energy and maintenance cost savings generated by the improvements themselves when the cost savings are financed over a period of time. Energy Performance Contracting (EPC)

15 15 Energy Performance Contracting Colorado Energy Office | © 2011 State of Colorado  Energy Savings Measures funded through guaranteed savings.  Reallocate money already being spent in utility budget to purchase efficiency and capital improvements.

16 16 Energy Efficiency Resource Standard Colorado Energy Office | © 2011 State of Colorado Demand-Side Management (DSM): encouraging reduced usage (demand) to delay or avoid new power plant investments Premise: New generation costs $X per unit (MW); if DSM can avoid that MW for less than $X, it's a better investment Challenges: –confidence that demand has been reduced –works against utility business model CO Public Policy: requires investor-owned utilities to pursue DSM and include in resource planning; (treat DSM as a resource) (Some municipal utilities and cooperatives are also pursuing DSM)

17 17 Colorado’s Generation Mix Colorado Energy Office | © 2011 State of Colorado

18 18 Renewable Energy Standard Colorado Energy Office | © 2011 State of Colorado Amendment 37 (2004) –10% renewable Energy by 2015 –Applies to utilities with 40,000+ customers HB (2007) –Increase to 20% renewable energy for Investor Owned Utilities HB (2010) –30% standard for investor owned utilities (~60% of CO generation) –10% standard for rural electric cooperatives and municipal utilities over 40,000 customers (~25% of CO generation) SB (2013) –20% standard for rural electric cooperatives over 100,000 customers –Permits waste to energy, and coal mine methane capture technologies into RES

19 19 Generation Mix Comparison Colorado Energy Office | © 2011 State of Colorado

20 20 SB : Moving Beyond the Rhetoric Governor’s Rationale for Signing: Removes In-State Preference (current lawsuit) Redefines “eligible energy resources” to support rural initiatives: Electricity from municipal solid waste Electricity from coal mine methane Current electric cooperative achievements Achieving 10% renewables without a 1% net rate impact Electric resource diversity tempers rate increases Federal tax credit (wind production) expires 2014

21 21 SB : Moving Beyond the Rhetoric Governor’s Concerns with SB : Ability of cooperatives (& Tri-State) to achieve goal by 2020 Rate impact upon customers Fully understanding & implementing the “rate cap” provision Supporting the “pooling” of renewable credits between coops Implementation Plan: Advisory Committee: fact-based analysis of the concerns Commitment to legislative fixes in 2014, if substantiated

22 22 Contact Us Colorado Energy Office (CEO ) State of Colorado John W. Hickenlooper, Governor 1580 Logan Street, Suite OL1 Denver, Colorado The Colorado Energy Colorado Energy Office | © 2011 State of Colorado


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