16 July 2010
For Immediate Release:                                                                                                                      

Packed Room Learns About the Economic
Benefits of Feed-In Tariffs

Speakers discuss employment, tax, and investment benefits of FITs at Capitol briefing

Sacramento – The FIT Coalition hosted an educational briefing on the economic benefits of Feed-In Tariffs (FITs) in a packed State Capitol committee room on Wednesday.  Featured speakers included Dan Pellissier, Deputy Cabinet Secretary for Governor Arnold Schwarzenegger, Mary Nichols, California Air Resources Board Chairman, Hans-Josef Fell, Member of the German Parliament and co-author of Germany’s Renewable Energy Sources Act, and Craig Lewis, FIT Coalition Executive Director.  Dan Jacobson of Environment California moderated the briefing.

The standing room only crowd heard evidence on how Feed-In Tariffs provide tremendous economic benefits.   FITs are fixed price, long-term contracts that require a utility to buy electricity produced by renewable energy generators.  Pellissier opened the discussion remarking that, “Feed-In Tariffs are completely in line with the Governor’s approach to increasing renewable energy generation in California and transitioning the state to a clean energy economy.  While it is too soon to know whether the Governor would sign a specific measure, we’re hopeful that the Coalition can get a good Feed-In Tariff bill to the Governor’s desk this year.”

Hans-Josef Fell presented a compelling presentation on how Germany has been able to deploy more solar and wind projects than any other country of comparable size because of their robust Feed-In Tariff.  He went on to highlight the phenomenal economic benefits that come with such growth.  “In the 10 years of our FIT program, people employed by the renewable energy industry have increased 10-fold.”  In referencing cost, Fell explained, “For the price of about one beer per month per household, the German people are importing 6 billion Euros less of fossil fuels per year and getting 16% of their energy from renewable sources.”

California Air Resources Board Chairman Mary Nichols said Feed-In Tariffs complement California’s landmark climate law, AB 32, which requires the state to reduce global warming emissions to 1990 levels by 2020.  “A well-crafted FIT would help Californians get where they need and want to be on cleaner air and more efficient energy – only faster,” Nichols said. “It would help launch thousands of renewable energy projects across the state quickly and cost-effectively.”

Craig Lewis dove into the details of a FIT legislative proposal called the REESA, or the Renewable Energy and Economic Stimulus Act, which will be introduced in the 2011 legislative session in California.  Lewis explained, “The REESA creates a statewide FIT for renewable energy projects up to 20-megawatts (MW) in size that would deliver an incremental 2% of California’s energy every year through 2020.”    Lewis explained how FITs work by removing barriers and leveling the playing field.  “By having a set price for each type of renewable technology - solar, wind, biomass, etc. – investors and developers can start their renewable energy projects with confidence and ease knowing that utilities will interconnect their projects and purchase the generated power at a known price.  The fact that FITs are simple, fair, and effective is the reason that FITs are responsible for the vast majority of renewable energy that has been deployed in the world.”

Lewis also presented the findings of a recent UC Berkeley study, led by Professor Dan Kammen, showing that a comprehensive FIT would create 3 times the number of jobs, over $2 billion in additional tax revenue, and stimulate tens of billions in new investment in the state compared to current models for how California will reach its 33%-by-2020 Renewable Portfolio Standard goal.  “The UC Berkeley study shows that FITs are the best policy mechanism for accelerating the deployment of cost-effective renewables while delivering tremendous economic benefits.  The State of California must act to leverage this unparalleled opportunity for creating hundreds of thousands of jobs, attracting tens of billions in renewable energy investment, and yielding billions to the State through increased tax revenue.  It’s a win-win-win for California,” concluded Lewis.

Moderator Dan Jacobson wrapped up the briefing by summing up the economic benefits of Feed-In Tariffs in the following manner, “Thousands of new jobs with no tax payer money used.  Now that is clean energy policy that works.”

The FIT Coalition is a leading force in replicating Feed-In Tariffs and other global renewable energy best-practices throughout the United States.  The FIT Coalition’s mission is to identify and advocate for policies that will accelerate the deployment of cost-effective renewable energy. The FIT Coalition believes the right policies will result in a timely transition to renewable energy while yielding tremendous economic benefits, including new job creation, increased tax revenue, and the establishment of an economic foundation that will drive growth for decades.  The FIT Coalition is active at the national, state, and municipal levels.   

For further information on the FIT Coalition, please visit www.FITCoalition.com.

Contact:  Mircalla Wozniak, Mircalla@FITCoalition.com

415-448-7734                                                                       

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THE FIT COALITION CAISO SIGN-ON LETTER -- DOWNLOAD HERE and UPDATE - SIGN-ON NAMES WERE COLLECTED THROUGH SATURDAY, JULY 17 -- THIS LETTER IS FINAL AS OF MONDAY, JULY 19, 2010 - 9 a.m. AND HAS BEEN SUBMITTED.

Hello FIT Coalition Friends,

Thank you for agreeing to take action with us. 

As described in the original FIT Coalition (FITC) action alert dated 6/24, the FITC believes that CAISO’s effort at reforming its interconnection procedures and their proposed elimination of the Small Generator Interconnection Procedure (SGIP) will severely undermine the Wholesale Distributed Generation (WDG) market segment, which is comprised of 20 MW and below projects that are interconnected to the distribution grid. 

The FITC has been a leading participant in the CAISO proceeding, including as an active member of its formal Working Group, and would like to submit the below and attached letter to CAISO leadership.  As you will see, the letter outlines the steps we believe should be taken that will protect and promote Wholesale Distributed Generation.  The letter will also be circulated to the leadership at FERC, Governor Arnold Schwarzenegger’s office, and other influential policymaking bodies.

Please let us know as soon as possible if we can add your name / company / organization to the letter as a co-signer.

Please email a confirmation to Action@FITCoalition.com in order to be added to the letter and include the following information:

Name

Title

Company / Organization

Mailing address

Contact phone number

Contact email address

Thank you again for taking action with the FIT Coalition.  We believe that we must succeed; otherwise California would be introducing significant obstacles to wholesale distributed generation at a time when that market segment is needed most.

Sincerely,

Craig Lewis



Max Wei and Daniel M. Kammen, Renewable and Appropriate Energy Laboratory Energy and Resources Group, University of California, Berkeley.

View the full report, executive summary and press release here.

On Monday, June 21, the FIT Coalition submitted the following comments to CAISO: Download FIT Coalition CAISO Submission Here.

What is at stake and what you can do?

The California Independent System Operator (CAISO) is on the verge of undermining the Wholesale Distributed Generation (WDG) market segment, which is comprised of 20 megawatt (MW) and under proje cts that are interconnected to the distribution grid.

CAISO has proposed eliminating the Small Generator Interconnection Procedure (SGIP), which is the streamlined interconnection process for 20 MW and below energy projects that is mandated by the Federal Energy Regulatory Commission (FERC).

The FIT Coalition urges all developers pursuing WDG projects in California to get involved to help ensure that CAISO does not eliminate SGIP. Please email Action@FITCoalition.com if the FIT Coalition can call on your support to join our efforts.

On the surface, CAISO has initiated reform because the SGIP process has been taking longer than the 9-month timeframe that is intended to be its maximum duration.  Rather than simply fixing the SGIP process, however, CAISO is proposing to eliminate SGIP by processing all projects through a process akin to the Large Generator Interconnection Procedure (LGIP), which would add a significant delay to the interconnection process for projects sized 20 MW and under.

The proposed process would take up to 2 years - and perhaps even longer. This would significantly undermine what is currently a MAJOR benefit of 20 MW and below renewables: a streamlined interconnection procedure.  CAISO claims that it would maintain a so-called Fast Track process for 2 MW and under projects, but considering that the Fast Track process has virtually unattainable requirements, this is a useless concession even for the sliver of tiny wholesale projects that it is intended to help.

Additionally, the FIT Coalition is extremely concerned that the Investor-Owned Utilities (IOUs) would attempt to reflect any SGIP changes in their Wholesale Distribution Access Tariffs (WDATs), thereby creating HUGE impediments for WDG.  While the WDATs are supposedly not being discussed in this CAISO proceeding, the IOUs historically adopt changes made in SGIP into their WDATs.  As such, CAISO's proposed elimination of SGIP would very likely lead to de facto reforms that make the WDATs equivalent to the LGIP (ie, all WDG projects would essentially be subject to LGIP, which would be a HUGE impediment to WDG).

CAISO needs to fix SGIP rather than eliminate it.  The FIT Coalition urges all developers pursuing WDG projects in California to get involved to help ensure that CAISO does not eliminate SGIP.  Please email Action@FITCoalition.com if the FIT Coalition can call on your support to join our efforts.

This CAISO proceeding is open to the public, and here is the calendar
of related events:

June 25:     Working Group meeting #3
July 8:         Working Group meeting #4
July 12:       Draft Final Proposal posted to ISO website
July 20:       Stakeholder meeting to discuss Draft Final Proposal
July 27:       Written stakeholder comments due on Draft Final Proposal
Weeks of August 2 & 9:
                   Additional stakeholder engagement
Aug 13:      Stakeholder Process Complete
Sep 9-10:   Board of Governors meeting – approval of modified
                   SGIP requested
Sept 13:     Draft tariff language posted
Sept 20:     Written stakeholder comments on draft tariff language due
Sept 27:     Stakeholder meeting to discuss draft tariff language
Oct 12:       Tariff language filed at FERC
Dec 20:      Anticipated FERC Order Issued

Additional details, including location and participation details, can be found at this CAISO weblink: http://www.caiso.com/27a2/27a2f34fa360.pdf

The FIT Coalition has submitted comments on this proceeding, and these can be found here.  The link to download is at the top of this posting.

Again, the FIT Coalition hopes to have your support.

Please email Action@FITCoalition.com if the FIT Coalition can call on you to join our efforts.

Printed in the Capitol Weekly, May 6, 2010

The recent controversy around Tradable Renewable Energy Credits (TRECs) and spending California’s money for out-of-state renewable energy may wake people up to the numerous advantages of developing a strong Wholesale Distributed Generation (WDG) market segment in California.  If the recent California Public Utilities Commission (CPUC) decision to stay the use of TRECs in the Renewable Portfolio Standard (RPS) program focuses attention on WDG, California has its first real chance to regain the lead in renewable energy that it lost over the last several decades.

To be a leader in renewables again, California must tap the vast potential of the WDG market segment.  WDG is comprised of 20 megawatts-and-under renewable energy projects that are interconnected to the distribution grid, with all energy production sold to a utility.  A 20 megawatt (MW) project can fit on a relatively small area while delivering a considerable amount of power: 20 MW of solar PV, for example, fits on about 100 acres while meeting the peak load of roughly 20,000 homes.

Many countries around the world are deploying renewables at a far faster pace than California.  Why?  Better policies that unleash the enormous potential of WDG.  Germany installed more than 17 times the amount of solar that California did last year; despite the fact that California has a solar resource that is 70% better.  And perhaps surprising, Spain’s solar market continues to be more than twice the size of California’s even though they have nearly identical populations and electric loads. 

Although the California Solar Initiative (CSI) is a reasonably successful program, it only applies to “retail distributed generation” (RDG), typically referred to as net metering.  RDG projects are constrained by many complications and the incentives only apply to projects up to 1 MW.  Hence, even if the CSI fulfills its highest expectations, it will only account for about two percent of California’s total electric demand when the program ends in 2017.  In contrast, reaching California’s 33% RPS mandate with solar by 2020 requires about 4 GW of new solar deployments every year.

Large-scale renewable energy projects, often referred to as “central station,” have also failed to deliver the energy we need.  Central station renewables are generally dependent on transmission lines that take more than a decade to build.  In addition, the environmental battles over the conversion of remote pristine lands into massive energy farms delay or kill these projects.

WDG provides the solution for renewables in California.  The relatively small size of WDG projects and their location within the distribution grid means these projects can be built immediately.  WDG projects can be financed and permitted with relative ease on rooftops and disturbed lands, without dependence on new transmission lines.  WDG avoids all of the constraints associated with net metering like limited onsite loads, non-owner occupied properties, split metered situations, and changing retail rates. 

WDG delivers the most cost-effective renewable energy for California ratepayers.  A CPUC study that is being revised to reflect the current pricing of solar is expected to show that WDG is a better deal for ratepayers than the large central station projects that require transmission build-outs and suffer the inefficiencies of transporting energy over long distances.  Hence, WDG is California’s best hope for achieving its renewable energy goals cost-effectively and in a timely fashion.   In addition, WDG can begin delivering tremendous economic dividends for California in the form of immediate job creation and increased tax revenue. 

The easiest way to grow the WDG market segment is to implement a Feed-In Tariff (FIT), a widely proven policy mechanism for unleashing WDG.  Germany and many other countries have successfully implemented FITs, which are essentially pre-defined, pre-approved “power purchase agreements” (PPAs).  FITs remove barriers and parasitic transaction costs/time associated with solicitation processes, including auctions.  FITs enable any party to own renewable energy facilities and get paid for the power delivered to the grid.  The rate they are paid is set to make efficient projects profitable.  Numerous studies, including multiple from the National Renewable Energy Laboratory (NREL), have found that WDG FITs are far-and-away the policy of choice for scaling cost-effective renewable energy quickly. 

Since mid-2009, four WDG FITs have been implemented in North America: Gainesville, Florida; Province of Ontario; State of Vermont; and the Sacramento Municipal Utility District (SMUD).  These four FIT markets are either deploying renewables far faster than any other region in North America or are staged to do so soon.

A WDG FIT represents a massive opportunity for California.  A recent study by the California Energy Commission found the potential for over 27,000 MW of solar projects that can connect to the existing distribution grid immediately.  27,000 MW is roughly ten times the total CSI goal and about half of California’s peak energy demand. 

WDG is the answer.  The question is how long it will take California to exploit it with a comprehensive FIT that puts the state back into a leadership position.

Craig Lewis is the Executive Director of the FIT Coalition.