27th Annual Bonbright Center Electric

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27th Annual Bonbright Center Electric
Natural Gas ConferenceDay 1 Panel Session 3
Utility Scale Wind Solar Generation

• Henrietta M. Gurri McBee
• 3 October 2007

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Climate Change Focus Is at an All Time High
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New York Times/CBS News Poll, April 20-24, 2007
Americans Are Concerned
How much have you heard or read about global
warming a lot, some, not much or nothing at
all? Global warming is a very serious problem and
should be one of the highest priorities for
government leaders. Global warming is not serious
and can be addressed years from now. Do you
think global warming is an environmental problem
that is causing a serious impact now? Do you
think it is necessary to take steps to counter
the effects of global warming right away?
42 (a lot) 52 (agree) 8 (agree) 49
(impact now) 78 (right away)
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State and Regional Climate Change Actions
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CO2 Mitigation
Source EPRI, Electric Sector CO2 Impacts
February 2007
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Summary of Floridas Climate Change Summit

• Nearly 800 attendees
• 120 local, state, international media
• Leadership from State Government, DEP PSC
• Signing of Executive Orders and Partnership
  Agreements
• Actions to Reduce Greenhouse Gas Emissions from
  Florida State Government 07-126
• Governors Action Team on Energy and Climate
  Change 07-128 FPL President Armando Olivera, is
  the only utility representative
• Actions to Reduce Greenhouse Gas Emissions within
  Florida 07-127
• Agreements with Germany and the UK

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Executive Order 07-127 Emissions Reductions in
Florida

• Florida to reduce emissions to 2000 levels by
  2017, 1990 levels by 2025 and 80 below 1990 by
  2050
• Florida electric utilities to meet 2000 levels by
  2017, 1990 levels by 2025 and 80 below 1990 by
  2050
• Requires adoption of California motor vehicle
  standards
• New building, appliance and consumer product
  standards
• Requests the PSC to set a 20 RPS with a strong
  focus on solar and wind, to adopt IEEE 1547
  Standard for interconnecting distributed
  resources to the grid, and to allow net metering
  for renewables up to 1MW

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Florida FPL Characteristics

• Florida is one of the fastest growing states in
  the country
• FPL provided reliable electricity to more than
  130,000 new customer accounts last year
• FPL is projecting an annual average increase of
  nearly 87,000 new customers for the next ten
  years
• Electric usage per FPL customer has increased by
  approximately 30 percent over the past 20 years
  resulting in projections of significant growth in
  energy usage per customer over the next decade
• Despite FPLs successful energy conservation
  programs, and a focus on developing renewable
  energy, the growth in demand for electricity has
  necessitated on average, FPL will need 650 MW of
  additional power generation every year

Challenge Balancing providing economic, reliable
electric service while achieving greenhouse gas
reductions.
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FPLs Demand Side Management

• FPLs DSM includes the planning, implementation
  and monitoring of utility programs designed to
  reduce customer usage of electricity during peak
  demand periods in a cost-effective manner
• Load Management FPL has direct control of
  portions of customers loads or end uses
• Energy Efficiency FPLs customers invest in
  capital improvements (e.g., more energy efficient
  insulation and appliances) that result in
  changing energy consumption behavior (e.g.,
  thermostat set-back)

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FPLs DSM Impact Performance
Source DOE EIA 2005

• FPL customer base represents 3 of the total US
  consumers
• FPL has done 13 of the energy efficiency in the
  US and 6 of the load management

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Todays Wind Generation Challenges

• Major Issues
• Wind resource evaluation/ risk
• i.e. NCF output
• Transmission/Interconnection
• Tax credit cycle (in U.S.) drives WTG
  manufacturer inventory (supply chain)
• U.S. wind market is subject to global market
  pressures (supply chain)
• Escalating equipment costs (2009 installed costs
  likely to be double that of 2004)

Floridas wind resource is limited to coastal and
offshore locations which are costly and
challenging.
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Winds Promise - Becoming a Reality

• 2007 likely to be a record year for U.S. wind
  development
• Over 4,000 MW likely in U.S. this year
• Many challenges and opportunities exist
• 2007 - 2008 for U.S. market
• Upwards of 8,000 MW may be added
• Total U.S. capacity may approach 20,000 MW by Dec
  2008
• U.S. wind production still less than 1 of U.S.
  electricity supply

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FPL Energy U.S. Leader In Wind Energy

• U.S. market leader with 33 market share
• 4,016 net MW in operation at year end 2006
• 5,100 net MW in operation by year end 2007
• U.S Market may approach 16,000MW by 12/2007
• FPL Energy investment alone will exceed 6
  Billion by the end of 2007
• U.S. Market will likely grow an additional
  4,000MW in 2008
• FPL Energys wind program to add 8 10,000 MW
  over 2007 2012 period

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US Wind Resource Potential
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Florida Wind Regime
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FPL Clean Energy

• Wind
• St. Lucie County wind project up to 20.7 MW COD
  end of 2008
• Pursuing other potential large scale wind
  projects in Florida

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Solar Key Challenges

• Component Supply
• FPL Group has firsthand knowledge of the major
  component suppliers and has field tested nearly
  every new technology
• World supply for tubes, mirrors is constrained
  and will remain so until new factories are built
• Price point to wholesale customers
• Project challenges
• Large scale solar projects require substantial
  footprint
• Environmental challenges (e.g., wetlands on large
  footprint)

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FPL Clean Energy

• Solar
• Sunshine Energy Program
• PV projects since 1970s
• Targeting additional solar PV installations
• Announced plans to build new solar thermal 10 MW
  project, should Ausra technology meet FPLs cost,
  technical expectations and all necessary
  approvals are granted, target to build up to 300
  MW

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FPL Clean Energy

• Other Clean Energy
• Existing Florida Renewables Energy Purchases
  since 1980 including Biomass, Waste-to-Energy and
  Landfill Gas
• Pursuing biomass/wastewater/landfill gas
  opportunities
• Biodiesel FPL pioneered use of B20 which is 80
  diesel fuel mixed with 20 virgin soybean oil,
  used by virtually all of FPLs medium duty trucks
• Recent Renewable RFP resulted in
• 144 MW of new capacity from municipal solid waste
  incinerators (44 MW) and new biomass (100 MW)
• Assess and promote the commercial utilization of
  evolving renewable technologies
• Ocean current generation (e.g., Alliance with
  FAUs Center of Excellence in Ocean Energy
  Technology)
• Fuel cells

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FPL Group A Clean Energy Leader
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FPL Group A Leader on the Environment

• FPL Group has committed to a 15 improvement in
  generation efficiency by 2020 from a baseline
  year of 2000
• Generation efficiency improvements will result in
  an estimated 19 million tons of CO2 reductions in
  2020 as compared to the same generation in 2000

FPL Group has committed to an 18 reduction in
CO2 emissions rate by 2008 compared to a 2001
baseline

• Account for global dimensions of climate change
• Recognize the importance of technology
• Be environmentally effective
• Create opportunity and advantage
• Be fair to sectors disproportionately impacted
• Recognize and encourage early action

FPL Group is a member of The Climate Group, whose
mission is to catalyze business and government
leadership on climate change in order to put the
world on track for a low carbon economy.
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POWERING TODAY. EMPOWERING TOMORROW.