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INTENDED NATIONALLY DETERMINED CONTRIBUTIONS AS DRIVERS OF RENEWABLE ENERGY INVESTMENT

William F Tyndall Chief Executive Officer

February 10, 2016 7th MAIN LAC Dialogue Mexico City, Mexico

ENERGY CHALLENGES

• Aging power plants and distribution infrastructure
• Changing customer expectations
• One billion live without access to electricity
• One billion people live with unreliable electricity
• Climate goals require substantial decarbonization of

electricity supply

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GLOBAL PV MARKET CONTINUES TO GROW AS MORE COUNTRIES REACH RETAIL PARITY

Source: Duke Energy, CCAP Energy Dialogue, California, 2015

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THE “DER” TRANSFORMATION

Low-cost sensors Machine-to-machine controls Algorithm-based automation

Smart Controls & Analytics

Data streaming 24/7 Wi-Fi, broadband, 4G, 5G, XG & mobile devices

Cloud Computing & Communication Distributed Energy Resources

Government support Scaling of manufacturing and installation Electric cars

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MANAGING ENERGY IN A BUILDING

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STORAGE FOR COMMERCIAL CUSTOMERS

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• Demand management software combined with storage hardware
• Automated demand reduction
• Solar smoothing
• Grid support

DISTRIBUTED ENERGY BENEFITS

• Lower carbon emissions

– Solar and energy efficiency = zero CO2 emissions – One study: Major California city could decrease carbon emissions by 70%

by growing DER by 2% per year

• System benefits

– Reduced transmission losses – Grid Support – Greater resiliency

• Cheap and clean electrification
• Reduced Consumer Costs
• Customer Choice

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BUT BARRIERS REMAIN THAT MAY REQUIRE ADDRESSING AS PART OF INDC CONVERSION

The types and magnitude of barriers faced by a country will depend on their domestic fossil fuel resources and RE potential

OECD 2011

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INDC CONVERSION IS OPPORTUNITY TO IMPLEMENT EFFECTIVE POLICY THAT WILL DRIVE INVESTMENT

• Financial Incentive Policies:

– Feed-in Tariffs (FITs) – Tendering, reverse auctions – Tax policies – Net metering

• Regulatory Policies

– Renewable Portfolio/Clean Energy Standards – Cap & Trade, carbon pricing

• Enabling environment for RE ideally should address on-grid,
• ff-grid, and distributed generation as well as key barriers

RANGE OF POLICY OPTIONS TO PROMOTE RE

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TO OVERCOME BARRIERS, COUNTRIES HAVE STARTED TO SET TARGETS

Global Renewable Energy Targets by Sector, 2005 - 2015

Source: IRENA, Renewable Energy Target Setting, 2015

• China

800 GW by 2020

• India

175 GW by 2022

• Brazil

89% of power mix by 2030 - 23% non-hydro

• Namibia 70% of power

mix by 2030

• Vanuatu 65% of power

mix by 2020,100% by 2030

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ADDING TARGETS TO THE INDC IS A GOOD WAY TO ATTRACT ATTENTION TO THE DOMESTIC MARKET

Source: Map from World Resources Institute, CAIT Climate Data, 2015

Many countries mentioned RE targets in their INDCs:

Map: Countries which have submitted their INDC

Enabling environment – full range of policy actions over time

• Ratcheting up RPS (utility procurement requirement)

– 2002: 20% of retail sales from RE by 2017 – 2003: accelerated 20% deadline to 2010 – 2008: 33% RE by 2020 – 2015: 50% RE/clean energy by 2030

• Interconnection with neighboring states: allowing utilities to trade

energy to balance out supply and demand fluctuations

• Renewable Auction Mechanism: competitive bidding for DG

projects 3-20 MW

• Net Energy Metering : allows for compensation for excess

generation

• DG Goal: 12,000 MW by 2020 (5,200 MW of DG currently online)
• CO2 cap and trade includes utilities: encourages utilities to shift

toward RE, includes out-of-state power purchases

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SUCCESS STORIES: CALIFORNIA’S POLICY MIX

• CA has more than doubled installed RE capacity over the last four

years, adding over 11,000 MW (out of 21,000 MW currently online)

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CALIFORNIA

Renewable Energy development in Germany

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GERMANY

Source: International Climate Initiative BMUB, CCAP Energy Dialogue, California, 2015

Expansion of renewable energy sources in Germany

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GERMANY

Source: International Climate Initiative BMUB, CCAP Energy Dialogue, California, 2015

• Denmark’s transition from central power stations (90% imported oil in

1980s) to distributed CHP (providing 47% of the country’s thermal electricity demand) and wind

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SUCCESS STORIES: DENMARK AND DISTRIBUTED ENERGY

Source: Parbo, 2014. Energinet.dk. “Distributed Generation Trends and Regulation: The Danish Experience”.

• Tax breaks and incentives for renewable energy developers
• Set-asides in competitive tenders, with 10 year minimum contracts.
• Open generation market: those without contracts can sell directly on the

spot market

• Reference prices for innovative renewable energy technologies set

by government aim to boost competitiveness of clean energy sources

• Renewable energy targets: 74% installed power capacity by 2018; 91%

in 2027

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SUCCESS STORIES: NICARAGUA'S MODEL BASED ON STRONG PRIVATE INVOLVEVEMENT AND INCENTIVES

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SUCCESS STORIES: NICARAGUA

Sources: Climatescope, Bloomberg New Energy Finance; International Energy Association

• $1.5B in renewable energy

investment from 2006-2012 (5% of GDP)

• Highest cumulative renewable

energy investment relative to GDP in the region

• Substantial non-hydro renewable

energy capacity

• No wind power in 2009 to 14%

installed capacity in 2015

THANK YOU

For more information, please visit us at

www.ccap.org.