Green Power In Canada Workshop #5, Next Steps Pollution Probe & Summerhill Group Western Economic Diversification Canada April 3, 2002 Vancouver, B.C. Presentation by Nigel Protter, MBA Representing the IPPBC
IPPBC: Independent Power Producers Association of B.C. • formed in 1992 • 200 members, both green and otherwise... • Voice of IPPs and industry service providers • Progress: • RFPs from 1989 to 2000: 18 projects, 600 MW • RFPs from 2001 to today: 4 RFPs, likely 33 small to medium sized projects, excludes VI-CFT • Total, about 50 projects and 6000 GWh or 10% of domestic consumption by ~2007
Nigel Protter • President & CEO of Sieber Energy Inc., developer of SieWAVE Energy Accumulator offshore power technology • Director, IPPBC. Green Power Champion • Background: Technology development, management, marketing. MBA Management of Technology, SFU • Live in rural B.C., outdoors person, fixated on promise of green energy • Exergetics Development Co.: Run of river project development: “permission to build”, government & stakeholder relations, community consultation, feasibility, general management • Industry work: Sea to Sky LRMP - energy sector rep., BC Wind Integration System Expansion (WISE) P3 study
7 Key Ideas For Improved Green Power Producer (GPP) Opportunity • Share the Storage • Revamp the Grid • Open call under 5MW • Tax consumption, not production • National System for Tradable Green Tags • Utilities and GPPs work together, roles are clear • Wake up to marine power
Share The Storage • De-facto utility monopsonies effectively curtail electricity sales opportunities for GPPs • Why? Despite improved “access to wires” rules, GPPs can’t practically sell unfirm power across the border or to industrial customers • To be able to offer a firm product, GPPs must have guaranteed access to storage and to power pooling - but please not at terms dictated by the utility • With access to storage, GPPs could sell to customers of their own choosing, more green projects would be financeable
Revamp the Grid • Public utilities are mandated to deliver a reliable supply with highest possible up-time • Was easier to do in the days of centralized, monolithic generation • Grid old, out of shape. Grid models, analogue grid controls, and dumb power electronics cannot cope • GPPs herald the new distributed generation paradigm. Trend will accelerate, become more complex, more fine grained, more multi-dimensional with net metering • Grid is both path and pool, but pool is getting full • Implement a Smart Distributed Generation Grid System, • Share the cost equally, not just on IPPs
Open Call for Green Under 5MW • Allow any green project under 5 MW capacity to be built under fixed price menu with a standard EPA - at any time • Increased certainty = lower cost of money • Provides more private sector opportunities • Stimulates the distributed generation system model • Encourages innovation in projects and technologies
Fix the EPA, Avoid perverse manipulations • Energy purchase agreements can be seen as political instruments • Utility EPAs represent policy as much as they do markets • Accelerate the move to market pricing for all electricity - internalize the externalities, lose the subsidies • Need to fix obvious problems such as flow-through for “change in law” • Don’t give Power Production Incentives just to one source. Incentivise all green sources equally
Tax the Product (consumption), not Resource Efficient Production • Longer tunnels and penstocks solve potential environmental problems, and usually lead to better resource utilization • Long feeder lines enable otherwise marginal projects • But the longer these conveyances are made, the more cost and construction risk is taken by developers • Yet, developers are taxed on these conveyances, essentially by the foot • Result: Developers are dis-incented to build the best green projects
National System for Tradable Green Tags • Emissions Credits punish the “bad guys”. That’s OK, but we need to also reward the “good guys” • Green tags create “Green Liquidity”. Go ahead and bet on a great new green technology or project. It might just get built • Requires national registry & certification authority for authentic green sources. e.g. A fully quantified “Eco-Logo” marque • Need a regulated bourse or market for trades and arbitrage • GPPs would have two products to sell, energy on the first order, and second order green benefits, both at a price dictated by the market, not by policy
Utilities & GPPs Together • Utilities: – Standards - RPS, net metering, reliability – Resource identification, cataloguing – Distributed Generation Infrastructure (grid) – Supply risk management, Storage & Shaping – Alliances and Funding for technological development – Fix international reciprocation - no more rate pancaking • GPPs – Project Risk – Project Capital – Creative project development – Innovative technology application
Marine Power • Terrestrial green power sources are simply too scarce to ultimately displace fossil power. • Dam every river, put a wind mill on every hill, shuck every cob, and chip every tree. Even so, would we meet even 25% of energy demand? • Where will all that green H2 come from? • Global warming: what happens to resources? (e.g. glaciers) • Look to the sea. Waves and wind contain enormous potential energy. An order of magnitude beyond entire global energy demand • No clear path but a big opportunity, perhaps the greatest business and environmental opportunity of our century
Review: 7 Ideas For Improved GPP Opportunities • Share the Storage - provide firming & shaping • Revamp the Grid - Get ready for dist. generation • Open call under 5MW - encourage innovation • Tax consumption, not production - easiest DSM • National System for Tradable Green Tags - green liquidity • Utilities and GPPs work together - roles are clear • Wake up to marine power - vast opportunities
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