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FLORIDA PUBLIC SERVICE COMMISSION WORKSHOP ON RENEWABLE ENEGY On Behalf of The Sierra Club, Inc. PRESENTED BY: E. Leon Jacobs, Jr. Williams & Jacobs January.

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Presentation on theme: "FLORIDA PUBLIC SERVICE COMMISSION WORKSHOP ON RENEWABLE ENEGY On Behalf of The Sierra Club, Inc. PRESENTED BY: E. Leon Jacobs, Jr. Williams & Jacobs January."— Presentation transcript:

1 FLORIDA PUBLIC SERVICE COMMISSION WORKSHOP ON RENEWABLE ENEGY On Behalf of The Sierra Club, Inc. PRESENTED BY: E. Leon Jacobs, Jr. Williams & Jacobs January 19, 2007

2 FLORIDA ENERGY POLICY Driven More Prominently By Externalities Driven More Prominently By Externalities Vast Scope Undefined Relative to Needs Vast Scope Undefined Relative to Needs Challenged by Phenomenal Growth in Demand Challenged by Phenomenal Growth in Demand Highly Vulnerable to Global Highly Vulnerable to Global Markets In Disarray Markets In Disarray

3 FLORIDAS ENERGY MARKET Explosive Growth in Consumption – As of 1/04 Explosive Growth in Consumption – As of 1/04 48,000 MW - Summer 48,000 MW - Summer 51,000 MW - Winter 51,000 MW - Winter Annual Growth rate: 900 MW - 1,500 MW per year Annual Growth rate: 900 MW - 1,500 MW per year At Present Pace, Projected to Build At Present Pace, Projected to Build 45 New 500 MW Plants by New 500 MW Plants by 2020

4 FLORIDAS ENERGY MARKET Transmission Constraints Transmission Constraints US Department of Energy Transmission Congestion Study Finds High Probability for Congestion Due To Projected Influx of New Power from: - Nuclear ( 2 proposed plants) -Coal ( 7 proposed plants)

5 FLORIDAS ENERGY POLICY Regulators and Policy-makers Challenged By: Uncertainties in: Uncertainties in: fuel prices fuel prices fuel transportation fuel transportation capital costs capital costs O&M expenses O&M expenses emission constraints; and emission constraints; and decommissioning decommissioning Risks in : Risks in : (i) reliability (i) reliability (ii) financing (ii) financing (iii) technology; and (iii) technology; and (iv) markets

6 FLORIDAS RENEWABLES Florida Policymakers Must Engage In A Systematic Process To Plan Reliable Service At Reasonable Rates Florida Policymakers Must Engage In A Systematic Process To Plan Reliable Service At Reasonable Rates This Process Must Deal With Uncertainty and Risk In A Transparent and Objective Fashion This Process Must Deal With Uncertainty and Risk In A Transparent and Objective Fashion The Sierra Club Recommends That The Florida Public Service Commission Address Renewables In the Context of an integrated portfolio management initiative The Sierra Club Recommends That The Florida Public Service Commission Address Renewables In the Context of an integrated portfolio management initiative

7 FLORIDAS RENEWABLES PORTFOLIO MANAGEMENT PORTFOLIO MANAGEMENT - energy resource planning utilizing a diverse, cost- effective mix of energy resources, including - energy resource planning utilizing a diverse, cost- effective mix of energy resources, including. supply-side (traditional and renewable) and,. demand-side (DSM, efficiency) options… for integrated resource planning in vertically integrated, regulated utilities, and in deregulated markets where they exist. US Environmental US Environmental Protection Agency Protection Agency

8 FLORIDAS RENEWABLES PORTFOLIO MANAGEMENT CRITICAL DIFFERENCE CRITICAL DIFFERENCE Portfolio Management provides for real assessment, balancing and management of long-term issues to minimize costs and risks. RESULTS RESULTS Optimized mix of resources that stabilize prices to ratepayers, and manage uncertainties, risks and costs.

9 RENEWABLES INTERNATIONALLY RENEWABLES INTERNATIONALLY Electric Production From Renewables is Emerging Around the World, But Still Low in the US, Even With Dramatic Reductions in Price of Wind Nonhydro renewables, percentage share of electricity production, By regional grouping OECD total 2.0% North America 2.0 Europe 2.1 Pacific 1.6 Selected countries Iceland 17.2% Denmark 16.7 Finland 12.3 New Zealand 8.9 Germany 2.5 United Kingdom 1.3 United States 2.1 -Source: IEA, Renewables Information 2002 (Paris: OECD/IEA 2002).

10 FLORIDAS RENEWABLES Renewables Bring Important Benefits, and, as With All Energy Resources, Pose Externalities, Uncertainty and Risk EX: JEA Biomass Project JEA Biomass Project Offshore Wind Project Offshore Wind Project Emissions Emissions Transmission Transmission

11 FLORIDAS RENEWABLES Most Prominent Strategies to Stimulate Renewables Feed-In Laws Feed-In Laws Specifies a guaranteed price via tariff, coupled with a utility purchase obligation and planned interconnection. Popular in Europe; Similar to PURPA Standard Offer Renewable Portfolio Standards (RPS) Renewable Portfolio Standards (RPS) Specifies a target mix of renewable energy resources for inclusion in a utilitys generation mix; growing popularity in US; little emphasis on price of renewables.

12 FLORIDAS RENEWABLES Twenty three States (40% of US sales) have enacted RPS Twenty three States (40% of US sales) have enacted RPS

13 FLORIDAS RENEWABLES It Is Vitally Important That There Be A More Complete Analysis of the True Costs, Risks and Benefits Of Energy Resources Used To Meet the Demand In Florida It Is Vitally Important That There Be A More Complete Analysis of the True Costs, Risks and Benefits Of Energy Resources Used To Meet the Demand In Florida Portfolio Management Is This Tool Portfolio Management Is This Tool

14 FLORIDAS ENERGY MARKET MOST SIGNIFICANT OPPORTUNITIES MOST SIGNIFICANT OPPORTUNITIES -Integrated Planning - Development of Demand-Side Strategies - Innovation in Energy Efficiency -Cultivation of Renewables and Distributed Generation

15 FLORIDAS ENERGY MARKET MARGINALIZES PORTFOLIO MANAGEMENT STRATEGIES Alliance to Save Energy reports: Hundreds of untapped MW savings as a result of underutilization of energy efficiency and renewables

16 BUSINESS CASE FOR PORTFOLIO MANAGEMENT STRATEGIES IN FLORIDA Demand Rapidly Outstripping Capacity of SupplyDemand Rapidly Outstripping Capacity of Supply Emergence of EE TechnologyEmergence of EE Technology Growing Adoption of Renewables Strategies Around the Country ( economies of scale)Growing Adoption of Renewables Strategies Around the Country ( economies of scale) Governmental Agencies and Other Large Users Must Reduce Energy CostsGovernmental Agencies and Other Large Users Must Reduce Energy Costs Environmental Benefits Are ValuableEnvironmental Benefits Are Valuable High Priority for Reliability After Hurricanes High Priority for Reliability After Hurricanes

17 GROWING PUBLIC DEMAND FOR ENERGY ALTERNATIVES IN FLORIDA Public Outcry Regarding Outages After Hurricanes Public Outcry Regarding Outages After Hurricanes Chapter , Laws of Florida (SB 888)Chapter , Laws of Florida (SB 888) Controversy Over Coal Plants Controversy Over Coal Plants Governors Hydrogen Initiative Governors Hydrogen Initiative 2006 Florida Energy Plan2006 Florida Energy Plan National Energy PlanNational Energy Plan


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