| 1 I NTRO TO R ENEWABLE E NERGY P ROCUREMENT Boston Green Ribbon Commission Clean Power Working...

| 1

INTRO TO RENEWABLE ENERGY PROCUREMENT

Boston Green Ribbon Commission Clean Power Working Group

| 2CORPORATE SUSTAINABILITY & STRATEGY SERVICES

Overview

1. Opportunities & challenges

2. Why renewables make sense in MA?

3. Procurement Pathways4. Limitations in MA5. Next steps?

Conclusions?


1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

$-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

Pv Cost per Watt

DC

Why Renewables Make Sense in MA: Falling Costs of Solar

-66% SINCE 1998

-50% SINCE 2009

FALLING PRICES…

2007 2008 2009 2010 2011 2012 2013 20140

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000Megawat

ts…RAPID

GROWTH

350% GROWTH IN 3 YEARS

Source: GTM, DOE, REN21


Why Renewables Make Sense in MA: Falling Costs of Wind

Source: U.S. Dept. of Energy


Solar PV installed on 90% of U.S. facilities; 165MW wind

farm in Texas in late 2014.

Agreed to buy more than 150 MW of wind and solar power, and to install 70 MW of solar arrays at

CA facilities

Amazon announced it will invest in a 150 MW wind farm to

power its data centers in Indiana.

GM plans to build a 34 MW wind farm to power manufacturing

facilities in Mexico.

Apple is investing $848 million in First Solar’s California

Flats solar PV project.

Google signed long-term contracts for 43 MW of wind energy to help power its CA headquarters.

The Opportunity As a result, leading companies are making major investments in wind and solar power


The Challenge Complexity can prevent institutions from realizing the benefits of renewable energy


Inertia•Status Quo•Lack of expertise

Complexity•Lack of transparency•Lack of standardization•Legal and Accounting•50 State policies

Value Proposition•ROI•LCOE•Not always cheaper

The Challenge New territory


Why Do Renewables Make Sense in MA?

1. High Energy Prices

2. Volatile Energy Prices

3. Falling Costs of Technology

4. Favorable Regulations

5. Aggressive Incentives

Lawmaker investigating massive utility rate hikesMy Fox Boston-Mar 27, 2015Before the winter season, the state's largest electric companies, National Grid and Eversource, increased their rates 37- and 29-percent.

Electric Customers Call For Action, Outraged Over Rate Hikesabc40-Feb 23, 2015Customers were told they'd see a 29 percent increase in their bill this ... any noticeable changes,” said Rhiannon D'Angelo fromEversource

http://www.myfoxboston.com/story/28632074/lawmaker-investigating-massive-rate-hikes-in-electric-bills



http://www.wggb.com/2015/02/23/electric-customers-call-for-action-outraged-over-rate-hikes/







Why Renewables Make Sense in MA: High Energy Prices

Hawaii

New Yo

rkAla

ska

Massach

usetts

District

of Colu

mbia

Califo

rnia

Marylan

dFlo

rida

Michiga

n

Nevada Tex

as Ohio

Alaba

ma

Virgin

ia

Tennes

see

South

Carolina

New Mex

ico

Montan

a

Louisia

naInd

iana

Oklaho

ma

Nebras

ka

Arkan

sas Utah

Washing

ton

Wyoming

0

5

10

15

20

25

30

Ave

rage

Ret

ail P

rice

(c

ents

/kW

h)

Electricity prices are ~31% higher than the

US average

Source: EIA


Why Renewables Make Sense in MA: Price VolatilityMa

r-03

Jul-0

3No

v-03

Mar-0

4Ju

l-04

Nov-

04Ma

r-05

Jul-0

5No

v-05

Mar-0

6Ju

l-06

Nov-

06Ma

r-07

Jul-0

7No

v-07

Mar-0

8Ju

l-08

Nov-

08Ma

r-09

Jul-0

9No

v-09

Mar-1

0Ju

l-10

Nov-

10Ma

r-11

Jul-1

1No

v-11

Mar-1

2Ju

l-12

Nov-

12Ma

r-13

Jul-1

3No

v-13

Mar-1

4Ju

l-14

Nov-

14Ma

r-15

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00 Historical Avg Real-Time LMP (NEMABOS)

Date

$/M

Wh

.

Source: ISO-NE


20022003200420052006200720082009201020112012201320140100200300400500600700800

Installed Solar PV in Mass.

annual capacity installed cumulative capacity

Why Renewables Make Sense in MA: Market Growth

Source: Mass. DOER


Why Renewables Make Sense in MA: LCOE

Source: EIA Data


Why Renewables Make Sense in MA: Favorable Regulations

Net Metering can allow generation to be credited at the full retail rate.

Virtual net metering can allow this credit to be applied even to an off-site electric bill.


Why Renewables Make Sense in MA: Performance Incentives

Solar

System Mix

$- $0.10 $0.20 $0.30 $0.40 $0.50

Electric-itySREC

Value per kWh energy produced

~3x Value


Net Metering Limitations in Massachusetts

Massachusetts Net Metering Class DistinctionsClass Number Size of FacilityClass I Net MeteringFacility

Less than 60 kW

Class II Net Metering Facility

60 kW to 1 MW

Class III Net MeteringFacility

1 MW to 2 MW



If ≤ 1 MWThen= Retail Value


Mar-0

3Ju

l-03

Nov-

03Ma

r-04

Jul-0

4No

v-04

Mar-0

5Ju

l-05

Nov-

05Ma

r-06

Jul-0

6No

v-06

Mar-0

7Ju

l-07

Nov-

07Ma

r-08

Jul-0

8No

v-08

Mar-0

9Ju

l-09

Nov-

09Ma

r-10

Jul-1

0No

v-10

Mar-1

1Ju

l-11

Nov-

11Ma

r-12

Jul-1

2No

v-12

Mar-1

3Ju

l-13

Nov-

13Ma

r-14

Jul-1

4No

v-14

Mar-1

5

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00 Historical Avg Real-Time LMP (NEMABOS)

Date

$/M

Wh

.


Otherwise Wholesale Value


Net Metering Limitations in Massachusetts: SREC Factors

= 90%

= 100%

= 70% & waitlist

= 80%


What is a Renewable Energy Purchase?

» What is the institution looking to claim?› Buying “green” power?› Supporting/enabling the development

of renewable energy?» RECs only?

› Yes if claiming environmental benefits.› Voluntary vs. compliance markets

» Power supply contract?» Hedge contract?» Onsite but with REC sale?» GHG emissions?


The Options There are four main procurement pathways available for institutions in Massachusetts

Implementation Support,

Monitoring & Evaluation

Opportunity Assessment & Site Selection

Renewable Energy

Strategy Development

Procurement Design & Process Management

REC Purchase Direct Investment (PPA or on-site)

Competitive Supply Synthetic PPA


RECSREC

e-

$

Procurement Pathway 1: REC or SREC Purchase


e-

$

e-

PPA

$

Procurement Pathway 2a: Direct Investment (Off-site)


e- $

e-

e-

Procurement Pathway 2b: Direct Investment (On-site)


e-

$

e-

Procurement Pathway 3: Competitive Supply Contract


e-

$e-$

$

Procurement Pathway 4: Synthetic PPA

$


Policy Improvements?

» Net metering carve-out for non-profits?

» Increase net metering caps? » Increase virtual/aggregate

net metering options?» Make it easier for

competitive suppliers to provide renewable hedge?

» Templates, guidelines?


» Determine the goal of the procurement.» Determine what staff resources and external

expertise is needed to manage the project.» Determine the volume of kWhs to be

purchased.» Identify appropriate stakeholders to involve,

including in-house or external legal and accounting team.

» Choose a procurement pathway.

Conclusions? Next Steps?


Chad Laurent | General [email protected]: +1.617.209.1986 Mobile: +1.617.733.3251

Contact

Meister Consultants Group, Inc.745 Atlantic Ave., 3rd FloorBoston, MA 20111 USAwww.mc-group.com

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