1. Texas Energy Independence Week Renewables & Natural Gas: Confluence, Conflict, or Something In Between? February 23, 2011 Todd Foley Senior Vice President, Policy American Council On Renewable Energy (ACORE) www.acore.org

2. 2 ACOREs 600+ Organizational Members Strategy to Assemble All the Players Necessary to Make Renewable Energy Successful in the U.S.

3. 3 ACOREs Mission & Strategy 501(c)(3) tax-exempt research & education nonprofit organization: …bring renewable energy into the mainstream of our economy and lifestyle …be for renewable energy & against nothing ACORE encompasses all renewable & inexhaustible energy options: - Solar energy- Biomass energy & fuels - Wind power- Geothermal energy - Hydropower & ocean- Waste-to-energy …in all forms of energy: - Electricity - End-use thermal energy - Fuels- Hydrogen …while focusing on three strategic themes & three major activities: - Markets- Research & publishing - Finance- Convening & education - Policy- Communications

4. 4 A Strategic Plan to Make Renewable Energy Successful in the U.S. Three Goals to Be Achieved Three Means by Which to Achieve Them National Security Climate & Environment Growth & Jobs Policy Finance Education

5. Renewables/Natural Gas Market & Policy Drivers Market Cost Reduction Technology Improvements Market Growth: o Wind 20% growth in 2009 (10 GWs) 39% of all new generation o Solar 96% growth in 2010 (~850 MWs) New Technologies: o Smart grid o Storage o information Policy EPA MACT Rules – coal plant retirements o Offset by new renewables, efficiency & gas o As much as 40% of existing fleet by 2020 National RES/CES: o 80% CES by 2035 (President Obama) o Partial credit for gas State RPS FERC Renewables Integration Incentives 5

6. Market Driver: Impressive Cost Reduction U.S. Electricity Generation & Retail Cost by Energy Source, 1930 – 2010

7. 77 Renewables/Natural Gas: Building on Strengths Strengths Weaknesses Natural GasRenewables Reliable 24/7 Ramps up/down quickly Robust delivery infrastructure Can bid into day-ahead electric markets No emissions, not even carbon Domestic resource Dispatches near zero price, little volatility Price volatility Vulnerable to economic dispatch Emits some NO X, carbon Dash to Gas fear among customers Intermittent/Variable Immature Delivery Infrastructure Difficult to bid into day- ahead electric market

8. Scope of Collaboration: Explore Issues to Build on Strengths Joint bidding – single unit bid (allows renewables to compete in day-ahead, dispatchable market) FERC market-pricing rules RTO dispatch rules - change one unit, one bid rule so separate gas & renewable units can bid as single unit Reliability obligations Market impacts: Day-ahead vs. regulated. How will combined bid work in varying markets? Effect of emerging smart-grid & other technologies Issues around locational differences & those co-located; Policy & process issues

9. #9 Phased-in Approach Seek Feedback: RTOs, Utilities, PUCs Generators Announcement at ACORE annual meeting Form steering committee; Develop plan Series of meetings FERC, industry (webinar, workshops) November/ December 2010 December 2010 January – April 2011 2Q– 4Q 2011 Next Steps?

10. 10 www.acore.org Thank you! www.acore.org

11. Market Driver: Increasingly Cost Competitive U.S. Levelized Cost of Wholesale & Retail Energy, 2010 Sources: Levelized Cost of Energy Analysis – Version 4.0, Lazard, June 2010; Hudson Clean Energy Partners estimates Notes: Solar PV assumes conventional silicon modules; gas assumes $4/MMBtu; retail energy for gas and coal incorporate a $53/MWh cost of transmission and distribution