 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
small wind
Green Power Programs Unfortunately, utilities typically apply customers’ green power premiums only to purchases from commercial renewable energy facilities, neglecting to provide incentives for small wind turbines or other residential energy systems that don’t generate electricity for commercial sale. Some utilities though have made development of small-scale, locally-generated, clean energy a priority goal of their green power programs. These utilities pool green power premiums into a fund that is then used to help defray the installation costs of new small-scale energy systems. The utilities may either provide the owners upfront payments when they (the utilities) purchase a system, or pay the owners a premium rate of return for their electric generation. Example #1: The Chelan County (Washington) Public Utility District’s Sustainable Natural Alternative Power program (SNAP) promotes projects within the PUD’s service territory. Three wind turbines and forty-two solar projects have been installed through the program as of October 2006. The utility pays a premium rate for the electricity (up to $1.50/kilowatt) that is based on total annual customer contributions to SNAP. A SNAP starter program is available to other utilities. Example #2: T he Orcas Power & Light Cooperative (OPALCO) Green Power Program provides upfront payments for small wind turbine installations based on expected generation during the first year. Producers also receive a production incentive based on output in subsequent years. The OPALCO program has achieved the third highest customer participation rate in the nation and currently has one small wind turbine participating along with three micro-hydro projects and 14 solar installations. Green Tag Marketing (Renewable Energy Certificates)
Green Tags are marketed to businesses and individuals who want to pay the cost of pollution-free electric generation. Purchasing Green Tags is similar to subscribing to utility green power programs, but with one important advantage for small wind turbine owners: the money customers spend on Green Tags can be invested directly in any project that offsets conventional fossil-fuel generation. In green energy programs, customer contributions typically purchase renewable energy only from commercial facilities the utility chooses to contract with. The Green Tag marketer is a more direct link between a customer or business willing to pay for clean electric generation, and the small producer whose generator doesn’t produce electricity for sale through a utility. The marketer can pool Green Tags and use them to provide upfront capital to install small wind turbines and other residential power systems. Example: The Bonneville Environmental Foundation (BEF) in Portland, Oregon, is the nation’s largest Green Tag marketer, partnering with a variety of utilities and cooperatives to fund small-scale energy systems across the Pacific Northwest. BEF invests directly in regional projects and informs Green Tag purchasers what specific generating sources their contributions support. Renewable Portfolio Standards (Renewable Energy Standards) A 2002 report from the Lawrence Berkeley National Laboratory concluded that Renewable Portfolio Standards (RPS, also referred to as Renewable Energy Standards, or RES) create critical market opportunities for renewable energy sources, without which government financial incentives promoting renewables have limited effect. Policymakers may also direct utilities to focus on smaller producers. The Iowa legislature, for example, considered an RPS in 2003 that would have specifically required utilities to derive a certain percentage of their renewable generation from locally owned, small-scale projects. As of October 2006, Renewable Portfolio Standards have passed in 22 states plus the District of Columbia: Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Iowa, Maine, Maryland, Massachussetts, Minnesota, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Texas, Vermont, andWisconsin. No federal standard yet exists. These states are proving that the standards work. Texas in particular has seen an explosive growth in wind power; wind turbines were largely responsible for the state as they produced more than twice as much renewable power as its RPS called for by 2002. In Minnesota, the standard helped open markets to farmers who cooperatively invested in small-scale commercial wind farms. Renewable Portfolio Standards are good public policy. They protect consumers from rate increases, enhance the domestic energy supply, and improve national security. The California energy crisis of 2001 and the painful economic effects of spiraling gas prices reveal the folly of over-reliance on fossil-fuel generation. Renewable Portfolio Standards diversify our mix of resources and lock in a supply of affordable electricity and stable prices despite unpredictable fluctuations in energy markets. Renewable energy projects -- especially small-scale generators -- also create power closer to where it is needed, reducing the stress on transmission lines that recently caused massive power outages in the Northeast. Renewable Portfolio Standards do not force electric utilities to invest in additional generation that they don't need. Utilities for which new power acquisitions are not feasible can purchase tradable renewable energy credits (Green Tags). Renewable Portfolio Standards typically obligate utilities to acquire credits equal to some percentage of their retail power sales, ensuring their support for new renewable energy development without requiring uneccesary capital investments. Model: View sample language of an RPS A number of these standards have been revised since their initial passage -- Connecticut’s RPS now requires that 10% of all retail electricity sales come from renewable resources by 2010, and applies to all electricity suppliers and electric distribution companies providing standard offer, transitional standard offer, standard service or back-up electric generation. Nevada’s legislature revised the state's minimum RPS amounts to increase by 2% every 2 years, starting with a 5% renewable energy requirement in 2003 and achieving a 15% requirement by 2013 and each year thereafter. Nevada’s Public Utilities Commission (PUC) adopted a temporary regulation that allows energy providers to buy and sell renewable energy credits/Green Tags, with a premium for electricity generated from solar photovoltaics by a retail customer who uses at least half the electricity on the premises. New Jersey’s restructuring legislation categorizes renewables by class and requires all retail electric suppliers to provide set percentages of their energy from Class I renewable resources (including wind, solar, fuel cells, ocean energy, landfill methane and sustainably cultivated and harvested biomass), plus an additional percentage from either Class I or Class II.
Distributed Generation Tariffs Tariffs are designed to provide small systems with fair access to distribution lines by standardizing interconnection agreements. Tariffs simplify negotiations and reduce transaction costs for both producers and utilities, provide equitable treatment for producers, and ensure the safe, reliable operation of the interconnected systems. They may also guarantee small-scale producers a sustainable price for their electricity. A few states that have Renewable Portfolio Standards have taken steps, via distributed generation tariffs, to ensure that locally-owned, small-scale energy systems become significant contributors of renewable power alongside larger commercial facilities. This is good policy because:
But small-system owners may find it more difficult than commercial wind developers to gain access to distribution lines and negotiate an agreeable price with utilities unless states adopt regulation to level the playing field.
The Minnesota legislature has ordered the state’s largest private utility to develop 100 megawatts of energy from small wind systems no larger than 2 megawatts, and the state public utility commission (PUC) has ordered the utility to add small wind systems to its lines as a condition for approving transmission upgrades.
The Minnesota PUC has also established a distributed generation tariff specifically applicable to small wind energy systems. It includes a fixed rate for electricity produced by qualifying systems.
Government Purchase Commitments Government purchases of environmentally preferred products set a highly visible example for businesses and other consumers to follow. A few public electric utilities -- notably Austin Energy, Seattle City Light, and the Chelan (Washington) Public Utility District -- pioneered green energy programs. Through government purchase commitments, state and local government agencies could
Example: Santa Monica, California was the first city in the world to power all its municipal facilities exclusively with renewable resources, purchasing approximately 5 megawatts of renewables. The City of Los Angeles purchases 10% of its electricity from renewable sources.
|
|
 |
|
 |
 |
 |
|
|