About ACORE. Acknowledgements RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 1

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2 RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 1 About ACORE ACORE, a 501(c)(3) non-profit membership organization, is dedicated to building a secure and prosperous America with clean, renewable energy. ACORE seeks to advance renewable energy through finance, policy, technology, and market development and is concentrating its member focus in 2014 on National Defense & Security, Power Generation & Infrastructure, Transportation, and International Initiatives. Additional information is available at Acknowledgements Lead Author: Lesley Hunter Researchers: Louis de Saint Phalle Special Thanks: Bloomberg New Energy Finance Database of State Incentives for Renewables & Efficiency Energy Information Administration 2014 American Council On Renewable Energy (ACORE) All Rights Reserved under U.S. and foreign law, treaties, and conventions. This work cannot be reproduced, downloaded, disseminated, published, or transferred in any form or by any means without the prior written permission of the copyright owner or pursuant to the License below: Published by: American Council On Renewable Energy (ACORE) 1600 K St. NW, Suite 650 Washington, DC Questions or Comments: info@acore.org

3 RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 2 Table of Contents Executive Summary... 3 State Profiles... 7 Alaska... 7 Arizona... 9 California Colorado Hawaii Idaho Montana Nevada New Mexico Oregon Utah Washington Wyoming Appendix User s Guide Glossary... 36

4 RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 3 Executive Summary What s New in the West in 2014: Growth of Renewable Energy: With the growing prominence of renewable energy in the western power, heat, and transportation sectors, states are implementing and exploring technology and policy options to effectively manage its production and use. Renewable energy is now responsible for over 20% of electricity generation in six western states, and the region saw the addition of nearly 4 GW of new renewable energy capacity in 2013 alone which is more than two thirds of total 2013 U.S. capacity additions. However, a battle is brewing among private-sector developers and their utilities over net metering. States are reevaluating the costs and benefits of their net metering policies, which may result in new rules for the utility purchase of distributed energy. Arizona s recently imposed charge to net-metered systems has already resulted in a decline of new residential solar in In parallel, states have also begun to expand their net metering policies to support community-owned distributed generation systems and increase the penetration of renewables on the grid. The industry will closely monitor changes added to net metering rules in the coming months and their potential implications for the sector. Carbon Reductions: The U.S. Environmental Protection Agency (EPA) s proposal to cut carbon dioxide pollutants from power plants will have a significant effect on western states energy sectors, further increasing the role of renewable energy in the region s overall power mix. The EPA plan complements the Pacific Coast Action Plan on Climate and Energy, a regional pact among Washington, California, Oregon, and British Columbia to reduce greenhouse gases and promote clean energy, and may also encourage additional multi-state collaboration and action on climate. Some states have already made significant progress in decarbonizing their power sectors; Nevada saw a 33% reduction in carbon dioxide emissions between 2005 and 2011 by reducing its use of coal while increasing solar and geothermal, but must continue to deploy renewable energy to meet its EPA target. Water-Energy Nexus: Water resources are becoming increasingly scarce in the Western Region. According to a University of California Davis study, the 2014 drought in California will result in an economic cost of $2.2 billion and the loss of 17,100 agricultural jobs. Many renewable technologies demonstrate tremendous water savings compared to traditional power plants, and are a technology of choice to help reduce future water consumption. New renewable energy projects in the West are incorporating additional water-savings technologies, such as the 392 MW Ivanpah solar thermal electric project commissioned in February 2014, which uses dry-cooling technology to significantly reduce its water demand. ACORE suggests that the costs associated with water, like the costs of carbon, should be included in the computation for the all-in cost of power. The western United States remarkable renewable energy resource availability, supportive policies, and welldeveloped supply chains have transformed western states into national leaders in renewable energy development. In 2013, the region attracted over a third of the country s combined venture capital, private equity and asset finance investment in the renewable energy sector, and produced approximately 33% of its total electricity generation from renewable energy sources compared to roughly 13% nationally (sources: Bloomberg New Energy Finance (BNEF) and Energy Information Administration (EIA)).

5 RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 4 ELECTRICITY GENERATION BY SOURCE, 2013 Source: EIA Well-designed state policies have been instrumental in attracting renewable energy companies from around the world to deploy renewable energy in the region for power, heating, and transportation. Nine of the 13 western states profiled in this report have binding targets for renewable energy production, many with minimums for certain distributed generation technologies and/or solar energy. Nearly all of the western states have also enacted net metering rules and interconnection standards to encourage distributed generation and help feed renewable power into the electric grid. An array of state financial incentives such as tax incentives, rebates, production incentives, and low-interest loans pair with these rules and regulations to mitigate the cost of renewable energy systems for homeowners, businesses, local governments, and other entities, as well as to encourage companies to locate projects and manufacturing facilities in-state. Many states continue to express bipartisan political support for increased renewable energy development. Nearly all available renewable energy technologies are well suited for deployment in the West, including solar, wind, hydro, biomass, geothermal, marine, and waste energy, as well as biofuels, hydrogen, and electric vehicles. The region benefits from some of the best solar resources in the world, responsible for roughly 68% of the nation s solar photovoltaic capacity and 91% of the nation s solar thermal electric capacity. With the country s strongest geothermal resources in western states, the country s utility-scale geothermal power projects operate in this region exclusively. The Energy Information Administration predicts that geothermal electricity generation could quadruple by 2040, playing an important role as western states satisfy their RPS targets. 1 The Western Region is responsible for about 63% of the nation s installed hydropower capacity, and hydropower accounts for about 25% of the region s electricity generation. It is also a central hub for new hydropower development, with more than $30 billion in planned projects

6 RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 5 California and Oregon rank among the top five states for wind power capacity. Wind power projects have been built in every western state. Oregon may also be the site of the West Coast s first offshore wind farm. A number of biomass facilities produce energy from municipal solid waste, wood waste, agricultural residues, and other organic feedstocks. Waste-to-energy and biogas systems produce energy from landfills throughout the region, which also helps reduce their size and capture hazardous methane emissions. Biomass energy is also produced at farms, paper mills, and stand-alone biomass facilities in many western states. Companies have begun producing advanced biofuels at a number of facilities and produce ethanol and biodiesel commercially to fuel the region s many alternative-fueled vehicles. Developers have chosen western states to be the site of groundbreaking, innovative renewable energy projects, such as ocean thermal energy conversion (OTEC) and wave energy experiments in Hawaii and Oregon, an enhanced geothermal project in Nevada, an algae fuel production facility in New Mexico, and microgrid and energy storage projects in several states. Waste heat can be converted into electricity at a number of industrial facilities, like steel mills, paper plants, refineries, chemical plants, oil and gas pipelines, as well as renewable and non-renewable power plants. Residences, businesses, and government buildings use renewable resources for heating and cooling purposes throughout the region, from solar thermal, biomass thermal, and geothermal direct-use systems. Investors are feeding billions of dollars to renewable energy projects, technologies, and companies in the western United States each year, spurring the creation of thousands of jobs and stimulating local economies. Most utilities in the western U.S. are planning for steady growth in renewable generation over the next two decades, 3 to comply with state targets but also because of renewables increasing cost-competitiveness with other technologies. In 2013, the region was responsible for 36% of the nation s new build asset finance for renewable energy ($5.8 billion), and an impressive 67% of the nation s new venture capital and private equity investment raised by pure play renewable energy companies ($573 million). 4 The cost of building renewable energy projects in the West continues to drop. In certain states, the availability of resources and/or high conventional energy prices make new renewable energy projects very attractive. In fact, a solar energy power purchase agreement was recently approved in New Mexico at 5.7 cents per kwh close to the price of energy at an existing coal plant in the state. In addition, the cost to produce biofuels continues to decline, and the first commercial advanced biofuels facilities are coming online. Recent federal government actions have created new opportunities for renewable energy development. For example, the U.S. Department of Interior expedites the approval of certain renewable energy projects located on federal lands, particularly abundant in the West, and has established renewable energy zones to encourage utility-scale development in a number of western states. The U.S. Department of Defense has chosen many western military bases to be the site of renewable energy projects that will help achieve its aggressive clean energy goals, including solar, biomass, and ocean energy systems. National Labs operated by the U.S. Department of Energy also lead the research and development of renewable energy technologies in Colorado, California, New Mexico and elsewhere. Certain challenges remain. The future of the renewable energy development in states without RPS policies such as Alaska, Idaho, Utah (which has a non-binding renewable portfolio goal), and Wyoming is less clear than in states with renewable targets. In addition to the absence of state policy support, the availability of transmission infrastructure also poses certain barriers to the effective use of renewable energy, especially when transporting power from projects located in rural areas (like federal lands), where resources are especially plentiful, to demand centers. Certain states strategically plan new transmission lines to be built along with new renewable energy projects, but many experience delays due to permitting issues and cost barriers. Despite these challenges, the long-term outlook for renewable energy in most western states is positive, with their unmatched resources and strong public and political support Bloomberg New Energy Finance

7 RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 6 WESTERN STATE INSTALLED CAPACITY RANKINGS, 2013 Renewable Power (w/hydro) Renewable Power (w/o hydro) Renewable Fuels 1. California*: 25,587 MW California*: 15,534 MW California: 293 mgy 2. Washington*: 24,141 MW Oregon*: 3,652 MW Oregon: 167 mgy 3. Oregon*: 11,893 MW Washington*: 3,239 MW Colorado: 125 mgy 4. Arizona*: 4,844 MW Colorado*: 2,715 MW Washington: 120 mgy 5. Idaho: 3,675 MW Arizona*: 2,126 MW Arizona: 83 mgy 6. Colorado*: 3,364 MW Wyoming: 1,411 MW Idaho: 55 mgy 7. Montana*: 3,252 MW Nevada*: 1,209 MW New Mexico: 32 mgy 8. Nevada*: 2,261 MW Idaho: 1,139 MW Utah: 22 mgy 9. Wyoming: 1,714 MW New Mexico*: 1,045 MW Nevada: 16 mgy 10. New Mexico*: 1,128 MW Hawaii*: 831 MW Wyoming: 10 mgy 11. Hawaii*: 857 MW Montana*: 648 MW Hawaii: 6 mgy 12. Utah: 691 MW Utah: 428 MW Alaska: 0.3 mgy 13. Alaska: 636 MW Alaska: 216 MW Montana: 0.3 mgy *=State has a renewable portfolio standard MW=megawatt; mgy=million gallons per year Sources: See User s Guide

8 RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 7 Renewable Energy in Alaska Summary With some of the highest electricity and gasoline prices in the nation, Alaska has the opportunity to economically deploy a variety of renewable energy projects throughout its diverse geographic regions. The state s renewable capacity accounts for over a fifth of electricity generation, predominantly via an extensive hydroelectric system, and growing installations of wind turbines. State initiatives have traditionally supported small-scale projects, which feed into larger transmission grids and the 150 remote, stand-alone grids serving rural villages. However, the development of Alaska s renewable energy industry may continue to be subject to fits and starts until a more aggressive strategy is set in place. Installed Renewable Energy Capacity, 2013 Wind Power 206 MW Marine Power 0 MW Solar Photovoltaic 0.2 MW Biomass & Waste 9 MW Solar Thermal Electric 0 MW Ethanol 0 mgy Geothermal Power 1 MW Biodiesel 0.3 mgy Hydropower 420 MW Totals 636 MW; 0.3 mgy Market Spotlight Sources: See User s Guide for details A 5 MW hydropower plant under development on Prince of Wales Island is slated to be commissioned in mid Estimated to cost $28 million, the project is partially funded by a loan from the Alaska Energy Authority (AEA) in June Developers have chosen Alaska to be a test site for innovative hydrokinetic projects. The small village of Igiugig will soon become home to a river-powered electricity generator that may be able to produce up to half of the village s power. The project has received funding from AEA and the U.S. Department of Energy. AEA is installing 14 biomass boiler projects during the course of 2014, six of which are sharing a $20 million grant from the state s Renewable Energy Fund. Eight additional boiler projects may be involved in a second round of consideration. Towns across the state are deploying wood-fired heating projects as well as heat-to-power systems that increase the energy efficiency and extend the fuel supply of the diesel engines that supply the towns with power. Economic Development Employment 2011 Green Goods & Services Jobs 12,119 Investment (Grossed-up) Asset Finance $93m $27.2m Venture Capital & Private Equity $0.6m - Sources: Bureau of Labor Statistics (BLS); Bloomberg New Energy Finance (BNEF). See User s Guide for details.

9 RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 11 Renewable Energy in California Summary With a population of over 38 million people and the largest economy in the nation, California has faced many challenges and opportunities for its renewable energy economy. To support the growth of the sector, the state has enacted ambitious policies, such as its 33% renewable portfolio standard. California leads the nation in generation capacity from geothermal, biomass, solar PV, and solar thermal electric projects, while placing second in wind and hydropower generation capacity. California s rich resource base and its early, sustained support for the renewable energy industry has been successful in attracting and incubating leading renewable energy companies which, in turn, has created many high-quality jobs. Installed Renewable Energy Capacity, 2013 Wind Power 5,829 MW Marine Power 0 MW Solar Photovoltaic 5,183 MW Biomass Power 1,417 MW Solar Thermal Electric 393 MW Ethanol 223 mgy Geothermal Power 2,711 MW Biodiesel 70 mgy Hydropower 10,054 MW Totals 25,587 MW; 293 mgy Market Spotlight Sources: See User s Guide for details California has the largest market for solar photovoltaic applications in the nation. With 2,608 MW DC of gridconnected PV installed in 2013 alone, the state was responsible for 57% of the country s capacity additions. On June 1, 2014, the state broke its own record for utility-delivered solar electricity fed into the state s grid, with a recorded midday peak of 4,767 MW AC. 6 The Ivanpah and Genesis concentrated solar power facilities, which were commissioned at the beginning of 2014 and have a combined capacity 642 MW, have increased the state s total CSP capacity by 163%. An additional 250 MW project in San Bernardino County is expected to come online by the end of The three projects are together expected to avoid the emissions of over one million tons of carbon dioxide a year was the first year that wind generated more electricity than geothermal in California. 7 The Alta Wind Energy Center in Tehachapi, North America s largest wind project, added an additional 228 MW in January A 45 MW woody biomass plant at the Port of Stockton began commercial operations in February The facility was converted from a shuttered coal plant and derives fuel primarily from urban wood waste, tree trimmings, and agricultural processes. Economic Development Employment 2011 Green Goods & Services Jobs 360,245 Investment (Grossed-up) Asset Finance $8.6bn $4bn Venture Capital & Private Equity $1.6bn $393.3m Sources: Bureau of Labor Statistics (BLS); Bloomberg New Energy Finance (BNEF). See User s Guide for details

10 RENEWABLE ENERGY IN THE 50 STATES: WESTERN REGION 12 Renewable Energy in California State Policy Renewable Portfolio Standard Net Metering Interconnection Standards Go Solar California! Campaign Other Incentives More Info 33% by 2020 (midterm targets of 20% by December 31, 2013 and 25% by December 31, 2016); all electric utilities Tradable renewable energy credits are capped at 10% for the requirement by 2017 Statewide target of 1,325 MW of energy storage procured by 2020, installed by 2024 All utilities except LADWP System capacity limit of 1 MW for most systems, or up to 5 MW for university or local government systems; aggregate capacity limit of 5% of customer peak demand Net excess generation (NEG) credited to customer s next bill at retail rate; at end of 12- months, may be rolled over indefinitely or purchased by utility Customers own RECs for system, but not RECs for NEG purchased by utility Virtual net metering allowed for multi-tenant properties, and meter aggregation allowed for governments and businesses with multiple meters Investor-owned utilities (IOUs) No limit specified, net metering not required Goal to install 3,000 MW of solar power capacity by end of 2016 and 585 million therms of solar hot water systems by end of 2017; state-wide budget of $3.6bn For IOU service territories As of Q1 2014, 2,139 MW of solar capacity had been installed California Solar Initiative (CSI): For all systems in IOU areas except new homes PV and solar thermal electric rebates; solar hot water rebates; single and multi-family affordable homes rebates; research grants (funding for some programs exhausted) PV incentive offered as a one-time payment based on expected performance or as a monthly payment based on production Operated by California Public Utilities Commission New Solar Homes Partnership (NSHP): Offers incentives for solar PV on new homes to support home builders Operated by California Energy Commission Self-Generation Incentive Program: For systems 30 kw or larger: 50% incentive received upfront and 50% received based on kwh production over first five years For systems under 30 kw, 100% paid upfront Maximum rebate: lesser of $5m or 60% of eligible project costs (up to 3 MW) For wind, waste heat, energy storage, biogas, CHP, and fuel cell systems Renewable Market Adjusting Tariff (ReMAT): Replaced state s existing feed-in tariff in July 2013 Project size cap of 3 MW; statewide program cap of 750 MW Pricing adjusts based on demand CaliforniaFIRST PACE Financing: Allows property owners to finance the installation of energy and water improvements on their buildings and pay the amount back through property taxes Available to commercial, industrial, agricultural, and multi-family buildings in participating local governments California also offers other renewable energy incentives; see links below for more details. DSIRE Database: California Energy Commission: California Public Utilities Commission (CPUC): cpuc.ca.gov/puc/energy/renewables California Solar Initiative: