California Incentives For Renewable Markets.ppt

California Incentives For Renewable Markets Timothy N. Tutt California Energy Commission (916) 654-4590 California Renewable Energy27,500 GWh in 1998 Background: Electricity Deregulation Key Elements of AB 1890 Established Power eXchange and Independent System Operator Recovery of stranded costs over four-year transition period Funds to Support Public Purpose Programs Non-bypassable surcharge: System Benefit Charge Four Programs Supported: Renewables, Energy Efficiency, Low Income, and Research Development Retail Competition Customer Choice, Green Market, Consumer Education 10% Residential Rate Decrease; No Shopping Credit Renewable Portfolio Standard or System Benefit Charge? Straight RPS lets market players decide how and when to meet standard - cost is unknown RPS with price cap still lets market decide, but cost is capped and level of renewables is unknown SBC collects money for some kind of administrative allocation: level of renewables is unknown Can be made market-oriented - maximize reactivity with market decisions California Bill After Restructuring Renewables Program $540 Million established to support New, Existing, and Emerging Renewable Technologies Funds Allocated to Four “Accounts” Existing Technologies ($243 Million) New Technologies ($162 Million) Emerging Technologies ($54 Million) Customer-Side Purchases ($81 Million) $76 Million to Consumer Credit Subaccount, $5 Million to Consumer Education Subaccount Ramping Allocations by Year Assisting Green Market Over the Grid Supply:Market-Driven Payments Existing Account production incentives (cents/kWh) are the lesser of: a payment cap (either 1 or 1.5 cents/kWh) a target price minus the market electricity price the available funds divided by the eligible generation New Account production incentives (cents/kWh) are: the result of bidding in an auction paid only for first five years of generation after startup Over the Grid Supply: Results New Account: auction induced 55 winning bid