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Feed-in Tariff Primer Feed-in tariffs are successful

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Title: Feed-in Tariff Primer Feed-in tariffs are successful


1
Feed-in Tariff Primer Feed-in tariffs are
successful
  • They have created rapid growth in new renewable
    generation
  • They have created the most kilowatt-hours of
    actual renewably-generated electricity of any
    policy
  • They have proven successful in Germany, France,
    Spain

2
Feed-in Tariff PrimerFeed-in tarifs are
adaptable to North America
  • No intrinsic limitations to use in
  • Canada or the United States
  • No intrinsic limitations to use in
  • States, Provinces, or at the Federal level
  • Have been successfully used in both
  • Ontario, Canada and California (early 1980s)
  • Currently being considered in several
  • US States Canadian Provinces

3
Feed-in Tariff PrimerFeed-in tariffs go by many
names
  • Advanced Renewable Tariffs
  • A system of feed-in tariffs (prices or payments)
    for different technologies
  • Renewable Energy Payments
  • Because the tariffs are a payment per
    kilowatt-hour of electricity generated
  • Standard Offer Contracts (Incorrect!)
  • Feed-in tariffs use standard contracts but not
    standard offers as the offers differ by
    technology (one price for solar, another for wind)

4
Feed-in Tariff PrimerFeed-in taiffs are more
equitable
  • Everyone can participate
  • Homeowners, farmers, Native Americans, small
    large businesses
  • Payments not tax credits
  • Participants do not have to be rich or have tax
    liability to participate
  • Payments not subsidies for hardware
  • Payments for electricity generated
  • Payments are bankable

5
Feed-in Tariff PrimerFeed-in tariffs are bankable
  • Predictable revenues
  • Enable traditional financing
  • Tariffs are high enough to work
  • Prices based on the cost of generation plus a
    reasonable profit
  • Prices not based on value of electricity

6
Feed-in Tariff PrimerKey program elements
  • Priortity access to the grid for all
  • Long contracts (20-25 years typical)
  • Prices Differentiated
  • By technology, size, application, and resource
    intensity (wind and now solar)
  • Prices determined by cost plus profit
  • Fair but not excessive profit
  • Inflation protection
  • Periodic Review (every 2-4 years)

7
Feed-in Tariff PrimerAccess to the grid
  • Must be able to connect
  • Connection must be simple, timely, and at
    reasonable cost

8
Feed-in Tariff PrimerPriority purchase
  • Renewable energy must be first priority
  • Take or pay contracts
  • Producer must be assured that the electricity
    they produce is purchased
  • Only exception is system emergencies

9
Feed-in Tariff PrimerContract length
  • 20 years or more
  • Longer contracts lower initial tariff
  • Shorter contracts higher initial tariffs
  • Germany 20 years
  • Spain 25 years to life of plant

10
Feed-in Tariff PrimerDifferentiated prices
  • Differentiated by technlogy
  • wind, solar, biomass, geothermal, hydro, etc.
  • Differentiated by size
  • higher prices for small projects
  • lower prices for large projects
  • Differentiated by application
  • higher prices for rooftop solar
  • lower prices for ground-mounted solar

11
Feed-in Tariff PrimerDifferentiated prices for
wind energy
  • Differentiated by resource intensity
  • Lower prices for windy sites
  • Higher prices for less windy sites
  • Ensures nearly all can participate
  • Landowners cant move to windier sites
  • Limits excessive profits at windy sites
  • Distributes development geographically
  • Avoids concentrating wind development

12
Feed-in Tariff PrimerPrices determined by cost
  • Prices (tariffs) determined by cost
  • Of generating electricity by each different
    technology, and
  • Reasonable profit
  • Determined by existing regulatory practice
  • Fair but not excessive profit
  • Prices are not based
  • On the cost of conventional fuels, or
  • On the avoided cost, or
  • On the value of the electricity

13
Feed-in Tariff PrimerInflation Protection
  • Protects invested capital
  • Higher protection lower initial tariffs
  • Prices adjusted periodically
  • For new projects
  • Inside existing contracts
  • Inflation indexing often less than 100
  • France Spain 50 to 70 indexing

14
Feed-in Tariff PrimerPeriodic Review
  • Determines if program is robust
  • Determines if targets being met
  • Allows price adjustment
  • If profits are too high
  • If targets are not being met
  • Allows addition of new technologies
  • Every 2-4 years

15
Feed-in Tariff PrimerSolar Growing with Feed-in
Tariffs
  • Major Solar PV Markets
  • Germany--1,500 MW/year
  • Spain--500 MW/year
  • Italy--300-500 MW/yr
  • Japan--250 MW/year
  • California--200 MW/year
  • Markets with Feed-in Tariffs
  • Germany, Spain Italy

16
World Solar PV Capacity 200813,000 MW
Paul Gipe, wind-works.org
17
Renewable Tariffs Solar Photovoltaics in
Germany
Paul Gipe, wind-works.org
18
Feed-in Tariff Primer Solar PV Success in Germany
  • 500 MW on Home Rooftops/year
  • 2,000 MW Total
  • 2 TWh/yr
  • 1 Billion/yr Revenue
  • Anyone with a Roof Can Do Solar in Germany!
  • Because revenue stream is bankable

20007
19
Feed-in Tariff Primer Solar PV for German
Homeowners
  • 150,000 New Systems
  • 6 Billion
  • Total of 600,000 Systems in Operation
  • 1,500 MW in 2008!
  • 2,000 MW in 2009 (Estimated)
  • Total 5,000 MW, 2008 7,000 MW, 2009
  • 2Supply in Conservative Bavaria
  • 1Supply in Germany

2007
20
Feed-in Tariff PrimerSolar New Farm Crop in
Germany
  • 700 MW on Barn Roofs in 2008
  • Total of 1,500 MW in Operation
  • 9 Billion Invested by Farmers
  • 1.5 TWh/year
  • 700 million/year Farm Revenue

21
Feed-in Tariff PrimerEuropean Wind Market
  • Europe 2/3 of World Wind Capacity
  • Gemany, France Spain
  • 2/3 of Europes Wind Capacity
  • Top European Markets
  • Germany, France Spain
  • All Three Use Feed-in Tariffs

22
Feed-in Tariff PrimerWind Growing with Feed-in
Tariffs
  • Germany 2004-2008 2,000 MW/year
  • 30,000 MW by 2012
  • Spain 2004-2008 2,000 MW/year
  • Germany
  • 50 Community Owned
  • 20 billion from Small Investors
  • Geographically Distributed
  • 7 of Supply

23
Feed-in Tariff PrimerResults of German Feed-in
Tariffs
  • Renewables 15 of Supply
  • 12 of Supply from New Renewables
  • Renewables 9.6 of Primary Energy
  • 90,000 Employed in Wind Industry
  • 50,000 Employed in PV Industry
  • 8,000 Employed in Biogas Industry
  • 280,000 Employed in Renewables
  • 32 (50) Billion Turnover

2008
24
Cost of German EEG50/yr/household
Paul Gipe, wind-works.org
25
North American Jurisdictionswith Modern Feed-in
Tariffs
  • Ontario, Canada
  • First comprehensive system of feed-in tariffs in
    North America (2009)
  • Vermont (2009)

26
OntariosAdvanced Renewable Tariffs
  • Technology differentiation
  • Solar, Wind, Hydro, Biomass, Biogas
  • Size application differentiation
  • Solar 5 classes
  • Wind On Land Offshore
  • Biogas 5 classes
  • Prices based on cost of generation
  • Community aboriginal bonus
  • No program cap

27
Vermonts Feed-in Tariffs
  • Technology differentiation
  • Solar, Wind, Hydro, Biogas, Biomass
  • Includes small wind tariff
  • Prices based on cost of generation
  • Modest program cap (50 MW)
  • Limited project size cap (2.2 MW)

28
Hawaiis Proposed Feed-in Tariffs
  • PUC rules in favor of feed-in tariffs
  • Fall 2009
  • Technology differentiation
  • Size differentiation
  • Prices based on cost of generation
  • Limited project size (5 MW)
  • Final rules end of 2009

29
Feed-in Tariff PrimerNorth American Experts
  • Toby Couture, E3 Analytics, toby_at_e3analytics.ca,
    506-292-3585
  • Karlynn Cory, NREL, Karlynn.Cory_at_nrel.gov, 303
    384-7464
  • John Farrell, Insitute for Local Self Reliance,
    jfarrell_at_ilsr.org, 612-379-3815 x210
  • Wilson Rickerson, Rickerson Energy Strategies,
    wilson_at_rickersonenergy.com, 617 930 5502

30
Feed-in Tariff PrimerFor More Information
  • www.wind-works.org/articles/feed_laws.html
  • www.allianceforrenewableenergy.org
  • www.worldfuturecouncil.org/arguing_fits.html
  • International feed-in tariff news group
  • The Feed-in Tariff Channel
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