The role of State governments in the development of renewable energy: regulation and promotion
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1 The role of State governments in the development of renewable energy: regulation and promotion Elizabeth Bauch Governance Advisor USAID/Mexico Foro de Regulación de Energías Renovables Comisión Reguladora de Energía 5 de octubre de 2010
2 The US Electric Sector Retail sales are delivered to consumers (residential, commercial, industrial, public) through one of the more than 3,200 electric utilities (municipal, investor-owned, federal or cooperatives). 210 investor-owned utilities own more than 38% of generating capacity and serve 71% of consumers. 2,009 publicly-owned utilties 883 consumer-owned rural electric cooperatives 9 federal electric utilities Utilities are regulated by local, State, and Federal authorities, and in the case of many electric cooperatives, by their Board of Directors.
3 US Electricity Regulation State State/Regional Federal Generation Distribution and Retail Sales Energy Policy Transmission Interstate electricity commerce Grid Reliability Hydroelectric plants Nuclear Energy Policy
4 US Electricity Regulation (2) State Energy and Utility Regulatory Commissions Environmental Authority Investor-owned utilities Municipal utilities Cooperatives State/Regional Independent System Operators / Regional Transmission Organizations Reliability Councils Federal Department of Energy Federal Energy Regulatory Commission North American Reliability Corporation Nuclear Regulatory Commission Environmental Protection Agency Federal Corporations (BPA and TVA)
5 US Electricity Regulation (3) Each state is responsible for the definition of its generation goals, regulatory instruments, and policy incentives for renewables. Renewable Portfolio Standard (RPS): Regulation that establishes an obligation of renewable energy generation in the state electricity supply mix. 30 out of 50 states have an RPS in place. Feed-in tariffs (subject to compliance with federal law): imposes an obligation to purchase renewable electricity at preferential rates (above market prices) and long term contracts. Few states have enabled or are considering this option. Net-metering: Most states allow electric energy offset by residential users with a grid connected RE generator but with different limitations (wattage, percentage of load).
6 Renewable Energy Generation in the US 10% of electricity generation in the US is from renewable sources Hydroelectricity 6% Wind farms 2% Others 2% By the end of 2009, installed wind power was more than 35,000 MW (largest capacity in the world). Texas 9,708 MW Iowa 3,670 MW California 2,739 MW
7 Wind Power Installed capacity has doubled in the last two years Source:
8 BUT REGULATION IS ONLY HALF THE STORY
9 States actively promote renewables Expected growth in demand (through RPS or generation goals) contributes to the industry s evolution and can spur innovation. Most wind turbines installed in the US are from foreign OEMs (European and Asian) but the growth of the domestic market is a driver for the growth of a local supplier base for goods and services. The State of Washington has implemented a feed-in credit with an economic multiplier if the project s components are manufactured in WA.
10 and can attract local manufacturing OEM Business Strategy Reduced operating costs Improved access to high potential markets Clustering Efficiencies Regional Infrastructure Workforce characteristics State attributes and incentives Regulatory stability Local infrastructure and public investments Business and government relations Local incentives Potential competitors or suppliers Community support Source: Eric Lantz (2010) NREL Technical Report
11 US wind energy sector manufacturing (2009)
12 USAID Competitiveness Program The Competitiveness Program, implemented by Abt Associates and Casals & Associates, promotes small and medium scale renewable energy projects through research and dissemination of information for stakeholders. Some of the Program s activities in the field of RE include: Dissemination on best practices for project development at the local level (including self-supply for municipal services). Support for the binational Cross-Border Electricity Task Force. Development of a program to identify supplier possibilities for Mexican enterprises in the growing renewables sector.
13 Manufacturing in Mexico (wind and solar) Wind Potencia Industrial (Generators) México, DF Vientek (Blades) Juárez, Chihuahua Trinity (Towers) Castaños, Coahuila Speco (Towers) Monclova, Coahuila CS Wind (Towers and componentes) Matamoros, Tamaulipas Kaydon (Bearings) Monterrey, Nuevo León Liebherr (Bearings) Monterrey, Nuevo León SOLAR PV Kyocera Tijuana, Baja California Energy Conversion Devices Tijuana, Baja California Sanyo Monterrey, Nuevo León Q-cells Mexicali, Baja California ERDM-Solar Tuxtla, Veracruz
14 Value chain integration USAID is developing a project with the State of Baja California to identify local suppliers for OEMs (original equipment manufacturers) with plans to develop wind projects (both for local use or export to the US). The goal is to make available a tool for the state/region/country to promote a local business supplier base for the wind industry. The project is based on the tool developed by the UNDP for its Supplier Development Program.
15 Supplier Development Program
16 Para más información: USAID Elizabeth Bauch, Governance Advisor Programa de Competitividad Tim Kessler, Director General Jonathan Pinzón, Director de Energía Limpia
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