1 Enhancing the Role of Renewable Energy in California Robert A. Laurie Commissioner California Energy Commission Geothermal Resources Council Annual Meeting September 2000

2 l The Energy Commission is the energy policy and information advisor to the California governor and legislature l The agency implements state energy policies while promoting a reliable energy supply at affordable prices for California California Energy Commission

3 Major Functions of the California Energy Commission l Gather and analyze energy data l Forecast energy supply and demand l License large power plants l Promote energy efficiency l Advance energy technologies l Promote renewable energy markets l Plan for and direct response to energy emergencies l Enhance energy export opportunities

4 1 in 40 Year Peak Demand 1 in 5 Year Peak Demand 1 in 2 Year Peak Demand Existing generation excludes 2,500 MW for outages Electricity Supply & Demand Balance (7% Operating Reserve at Coincident Peak)

5 California’s 1998 Net System Power

6 ELECTRICITY SOURCES Twenty five percent of the state’s electricity comes from out-of-state generation

California Power Plant Projects (As of September 2000)

8 Barriers to Proposed Power Plants l Availability of water for cooling power plants l Air quality standards and emissions from power plants l Supply of natural gas l Local opposition l Transmission constraints & system stability needs

9 Renewables in California l About 12% of California’s electricity supply in 2000 l California has added 790 MW of renewable plants to the system since 1990 l Geothermal comprises about 5% of state’s total electricity production l State support for geothermal is provided through the Public Interest Energy Research Program, the Renewable Energy Program, and the Geothermal Grant Program

1010 Renewable Energy Program l Also funded from Public Goods Charge established by AB 1890 l $540 million over four years to support existing, new, and emerging renewable technologies l Three of the program’s five “accounts“ offer incentives for the production or purchase of geothermal energy: 3 Existing ($243 million) 3 New ($162 million) 3 Customer Credit Account ($75.6 million)

1 Renewable Energy Program Existing Account l Pays cents/kWh production incentives (capped at 1.5 cents/kWh) to renewable generators on-line before l 259 existing renewable facilities (more than 4,000 MW) have received more than $130 million in incentives l 36 geothermal facilities totaling 1,200 MW have received nearly $13 million (about 10%)

1212 Renewable Energy Program New Account l Pays production incentives (capped at 1.5 cents/kWh) to generators on-line after 9-96 l Auction to allocate funds held June 1998 l 55 winning bidders (500 MW) included 4 geothermal facilities (157 MW) that were awarded over $80 million l Incentive not paid until projects are built and operating

1313 Renewable Energy Program Customer Credit Account l Provides ¢/kWh rebates (capped at 1.5 ¢/kWh) to customers for the purchase of renewable energy l More than $33 million paid in rebates l About 80% of customer rebates is attributable to geothermal sales

1414 PIER Program l Funded from Public Goods Charge established by AB 1890 l $62.5 million annually for “public interest" energy RD&D efforts l Renewable energy one of five subject areas in the PIER portfolio l Three solicitations in 1997 and 1998 committed nearly $51 million to 82 different projects in the five subject areas

1515 Geothermal Grant Program l Funded through Geothermal Resources Development Account (GRDA) l Promotes RD&D of geothermal energy in California through co-funding and technical assistance l Current projects include the Geysers Pipeline and Southeast Geysers projects to carry treated wastewater from treatment plant for reinjection, resulting in increased steam supply at existing geothermal plants

1616 New Developments l Late PIER will release a Renewables Affordability Solicitation. Amount of available funds is yet to be determined. l Spring Geothermal Grant Program will release solicitation for $2.8 million in GRDA funds for geothermal-related projects l Renewable Energy Program may hold a second auction for new renewable resources that can come on-line by June Amount of available funds is yet to be determined.

1717 Future of Renewables l Less than half of the state’s potential renewable capacity has been developed l New renewable generation needed to satisfy the growing green market and help alleviate the state’s current electricity supply shortage l AB 995 (currently before the Governor) extends funding for 10 years for both renewables ($135 million/year) and public interest R&D ($62.5 million/year)

1818 In Closing l Through PIER, the Geothermal Grant Program, and the Renewable Energy Program, the Energy Commission will continue to pursue its goals of: 3 Improving cost-competitiveness of renewable technologies through reduction of high life cycle costs and enhanced productivity 3 Helping to develop a self-sustaining renewable industry 3 Encouraging market-based development of new renewable resources 3 Maintaining the benefits and diversity of the existing renewables industry while helping the transition to a fully competitive market