1. Renewable Energy in Texas

2. SUSTAINABILITY SERVICES ENERGY EDGE CONSULTING | SERVICE OVERVIEW
Energy Edge Consulting is an independent 3rd party consulting firm who brings value to our clients by developing and implementing comprehensive energy management strategies.
Experience:
The members of Energy Edge’s team have more than 150 years of direct energy market experience.
Clients across multiple industries and markets, including education.
Direct experience implementing energy strategies, including renewable energy, in multiple markets across N. America, Europe and the UK.
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MANAGEMENT
SERVICES
ENERGY
PROCUREMENT
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SUPPORT
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SUSTAINABILITY
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Renewable Strategy Development
Financial and Market analysis
Independent assessment and procurement

3. Truths and Myths About Renewable Energy | WHAT TO BELIEVE
Renewable energy is cheaper than traditional grid power.
There is no way renewable energy is a going to save me any money.

4. SEPARATEING FACT FROM FICTION | AGENDA
Today’s Agenda
Current renewable energy landscape in Texas
Real costs of renewable energy and how it compares to the costs of traditional retail power
Offsite solar
Rooftop solar
Wind energy
Pro’s and cons associated with purchasing long-term renewable energy
Sourcing additional power that is not provided by a solar or wind asset (i.e. night time power or power when the wind doesn’t blow)
Is renewable energy a good fit for my organization

5. U.S. Solar PV Installations
RENEWABLE ENERGY IN THE U.S. | SOLAR ENERGY
Significant Changes have been playing out in the U.S. solar market
Solar energy, while still a small portion of the generation makeup in the U.S., has grown substantially in the past 5 years
Major improvements in efficiency of manufacturing and cost of solar modules and other equipment have dramatically lowered costs
States with strong solar or renewable mandates have seen large increases in solar installed (CA, MA, NJ, NC, VA)
Other markets with favorable wholesale conditions have seen growth (AZ, TX)
The current economics for utlility scale solar are competitive with traditional power sources in some markets
The on-peak nature of solar energy and relative predictability of production help in this regard
The Federal Investment Tax Credit was extended for several more years, driving further demand
U.S. Solar PV Installations

6. RENEWABLE ENERGY IN THE U.S. | WIND ENERGY
The U.S. wind energy market has also seen explosive growth
Wind electricity generation in some U.S. markets has seen explosive growth (CA, IA, KS, OK, TX)
The CREZ transmission build out in Texas aided this substantially
The federal production tax credit was extended though it does decline from 2016 levels each year from
One challenge with the substantial build out of wind (and solar) in some markets is managing the intermittent nature of wind electricity
This has spurred the need for new/higher levels of ancillary services to ensure grid reliability
The less predictable nature of wind generation and additional moving parts requiring maintencance relative to other renewable technologies are important considerations
U.S. Wind Generation Capacity
Source: American Wind Energy Association

7. Renewable Energy Purchasing Objectives
RENEWABLE GOALS | PURCHASING OBJECTIVES
Setting out goals and objectives of a renewable energy strategy should consider key inputs:
Renewable Energy Purchasing Objectives
Diversify fuel portfolio
Additionality of renewable energy
Meet expectations of stakeholders
Long-term financial hedge
Reduce spend

8. Renewable Energy Purchasing Strategy
RENEWABLE GOALS | PURCHASING STRATEGY
Setting objectives is key to developing a renewable energy purchasing strategy that will drive purchase characteristics:
Financial transaction or integrated with load purchase
Renewable generation technology
On-site or off-site project
Financing structure (PPA, lease, self fund)
Size of project or purchase
Renewable Energy Purchasing Strategy

9. TYPES OF RENEWABLE PROJECTS | ONSITE vs. OFFSITE
Location of Renewable Project
Behind the Meter Projects (on a customer’s property)
Rooftop solar
Ground mounted solar
Offsite
Can be located anywhere in the ERCOT footprint
Power is injected into the grid and the consumer continues to buy power at their meter
Increases the types of renewable projects available to a customer
Attributes of Offsite vs. Behind the Meter Projects
Behind the Meter
Smaller in scale, and usually more expensive than offsite projects
Will offset both
Energy purchases from the grid
TDSP charges
Offsite Projects
Lower prices due to scalability of project size
Reduces energy purchases from the grid but no reduction in TDSP charges
If the project is located in a different zone than where the customer is located, the cost of congestion on the grid will have to be addressed

10. FINANCING RENEWABLE PURCHASES | OFF & ON SITE
Power Purchase Agreements (PPA’s)
Finance the product through an agreement to pay a supplier a fixed fee for each kWh produced by the facility over a term (10, 15 & 25 yrs)
Typically a good option in territories where the PPA price can be equal or lower to the utility rates for typical production hours or where there are state incentives (CA, TX, VA, NJ)
Supplier would typically control the tax incentives (ITC and MACRS)
Renewable Energy Credits can be included in the PPA offer or excluded depending on the customer’s preference
Capital Purchases (Self Funded)
Expenditure up front with limited additional costs (O&M) over time
Solar panels are rated for 25 – 30 yrs, though are expected to last longer
Can potentially be financed through bond offerings, the PACE program, or other means

11. IMPLEMENTATION | OFFSITE PROJECT ATTRIBUTES
Wind and Solar Remain the Predominate Offsite Renewable Projects
The cost of renewable projects have dropped significantly in recent years
Offsite solar costs vary by market but in all cases are becoming more competitive with traditional grid power
Wind energy is often times below the cost of grid power but its intermittent nature can present challenges

12. IMPLEMENTATION | BEHIND THE METER ATTRIBUTES
Examples of behind the meter projects include:
Rooftop solar (250 kW – 2 MW)
Ground-mount solar (1,000 kW – 10,000 + kW)
5-7 acres required for a 1,000 kW asset
Wind is possible but is less common; varies in size
Value Drivers
Can be done in regulated or deregulated markets
Reduce both grid energy purchases and TDSP
Seamlessly integrates with retail load purchase

13. Determining An All-In Power Price
INTERMITTENCY RISK | VARIATION IN ENERGY PRODUCTION
Determining An All-In Power Price
While the PPA price is important, it does not represent the total cost of power
The cost of buying power from the grid when the renewable asset is not producing needs to be considered
The cost of grid power will vary based on the type of renewable energy being bought
Solar only produces during the day
Inland wind tends to produce more in the morning and evening and is more intermittent than solar
Understanding the total cost of energy is critical in evaluating a renewable energy purchase

14. INTERMITTENCY RISK | VARIATION IN ENERGY PRODUCTION
Grid power purchase
Grid power purchase
Grid power purchase
Solar power has a highly reliable production pattern
Only produces power during the day time hours
Wind power is much more intermittent than solar power
Most wind in Texas typically produces less during the peak day time hours and more during the “shoulder” hours

15. INTERMITTENCY RISK | VARIATION IN ENERGY PRODUCTION
In addition to daily fluctuations, seasonal differences also exist in generation profiles
Customer Load
Customer Load

16. MANAGING INTERMITTENCY RISK | CUSTOMER vs. PROVIDER
Intermittency risk has traditionally been managed by the consumer
Utilize the renewable energy when it is produced
Buy power from the spot market when the renewable asset isn’t producing energy
With solar, fixed price offpeak power can be purchased but additional power needed during the day would still be purchased from the spot market
However, we are now beginning to see REP’s willing to manage this risk for a customer
REP will take the renewable energy from the developer
Buy additional power needed to serve the customer
Charge a single fixed price for all power
As REPs become more willing to provide an all-in price, the attractiveness of solar power will increase

17. Renewable power is a good hedge against future power prices
HEDGE AGAINST FUTURE POWER PRICES | PRICE STABILITY
Renewable power is a good hedge against future power prices
Summer 2018 on-peak power prices have significantly risen in the last year
2019 & 2020 prices have also increased
Traditional grid power can only be bought 5-10 years forward
Renewable energy can be purchased for 10 – 25 years forward

18. BLENDED ENERGY PRICE | ALL-IN ENERGY PRICE
The final all in price to a customer is a combination of the renewable energy price and the price of power purchased from the grid
This often times results in a price below the stated price for solar power
Solar power PPA price
Power purchased from the grid
Indicative Prices ($/MWh)
Retail w/ Solar PPA
Retail Only
10 Years All In
$38.21
$39.52
20 Years All In
$40.63
$45.23

19. Matt Hobson