CESA Webinar Recent RPS Studies: Maine and Maryland Hosted by Warren Leon, Executive Director, CESA April 15, 2020
Housekeeping Join audio: • Choose Mic & Speakers to use VoIP • Choose Telephone and dial using the information provided Use the orange arrow to open and close your control panel Submit questions and comments via the Questions panel This webinar is being recorded. We will email you a webinar recording within 48 hours. This webinar will be posted on CESA’s website at www.cesa.org/webinars
www.cesa.org
Webinar Speakers Rebecca Widiss Matthew Hoyt Jason Gifford Patrick Knight Warren Leon Senior Analyst, Senior Analyst, Senior Director, Principal Associate, Executive Director, Exeter Associates Exeter Associates Sustainable Energy Synapse Energy Clean Energy Advantage Economics States Alliance (moderator)
Final Report Concerning the Maryland RPS Presenters: Matt Hoyt & Rebecca Widiss April 15, 2020
A GENDA ▪ Background ▫ Maryland RPS ▫ Study Origins and Approach ▪ Findings ▫ REC Sources ▫ Rate Impacts ▫ Emissions Impacts ▫ Job Creation ▫ Environmental Justice ▪ Parting Thoughts 2
M ARYLAND RPS O VERVIEW First enacted in 2004, amended 11 times, most recently in May 2019 ▪ 3
M ARYLAND RPS O VERVIEW (cont.) 15.0% ▪ Requires that 50% of retail energy sales come from Solar Carve-out renewable energy resources by 2030 12.0% ▫ 9.0% 14.5% from in-state solar by 2028 ▫ 2.5% from Tier 2 resources (i.e., hydropower) through 2020 6.0% ▫ 386 MW of approved offshore wind 3.0% ▫ 1,200 MW of additional offshore wind (to be added in 2026, 2028, 0.0% 2016 2018 2020 2022 2024 2026 2028 2030 and 2030) HB 1106 (2017) SB 516 (2019) ▪ Represents a compromise between many stakeholders 60.0% ▫ Allows MSW and black liquor as Tier 1 resources Total Tier 1 50.0% ▫ Has relatively broad geographic eligibility (within PJM, and eligible 40.0% resources outside of PJM that are transmitted into PJM) 30.0% ▫ Is pseudo-split between encouraging new resources (solar and 20.0% offshore wind) and maintaining existing resources (MSW, black 10.0% liquor, hydro), lowering costs, and promoting in-state development, reducing emissions and supporting jobs, etc. 0.0% 2016 2018 2020 2022 2024 2026 2028 2030 HB 1106 (2017) SB 516 (2019) 4
S TUDY O RIGINS AND A PPROACH ▪ HB 1414, enacted in 2017 Overarching Focus ▫ Directed PPRP to study the Maryland RPS with How policy design affects performance ▪ 17 General and Specific requirements, including: Methods Effectiveness of the RPS along several economic • and environmental dimensions Stakeholder engagement (e.g., NREL, LBNL, PJM, ▪ Availability and cost of renewable energy • MD agencies) resources Assessment of existing research (e.g., production ▪ Impact of alterations to the Maryland RPS • cost modeling) Potential to meet future Maryland RPS standards • New research (e.g., IMPLAN modeling, ▪ Descriptive Analysis) ▪ SB 516, enacted in 2019 ▫ Increased the MD RPS to 50% (among other Timeline changes) ▫ October 2017: PPRP RFP ▪ Amended RPS study to expand one existing requirement and added one new requirement May 2018: Exeter approved ▪ December 2019: Final Report ▪ 5
F INDINGS : REC S OURCES RECs retired for Maryland RPS compliance This resource mix is on a par with PA’s and ▪ ▪ are diverse in fuel type more diverse than three other states in PJM MWh 100% 8,000,000 6.2% 10.4% 16.2% 14.6% 7.7% 7,000,000 Wood / 7.2% 80% Biomass 15.0% 6,000,000 23.3% Landfill 23.8% Gas 60% 5,000,000 Hydro 8.3% 100.0% 12.5% Other 4,000,000 83.6% 40% 71.0% Black 3,000,000 Liquor 48.2% 42.8% 20% 2,000,000 Wind 1,000,000 0% MD DE DC NJ PA MSW - Wind Hydro Black Liquor Wood Solids 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Landfill Gas Solar MSW RECs Retired for Tier 1 Non-Carve-out RPS RECs Retired for Tier 1 Non-Carve-out RPS Compliance, by Fuel Source Compliance in Select States, by Fuel Source (2017) 6
F INDINGS : REC S OURCES (cont.) Half of RECs are from facilities that were in ▪ Most RECs retired for RPS compliance are ▪ operation before 2004 from out-of-state sources MWh MWh 5,000,000 10,000,000 4,255,746 9,000,000 Out-of- 4,000,000 State: Tier 3,559,922 8,000,000 2 7,000,000 3,457,764 3,000,000 2,960,693 6,000,000 2,000,000 5,000,000 Out-of-State: Tier 1 Non- 1,276,801 1,231,000 4,000,000 Solar 1,000,000 557,224 3,000,000 411,787 224,786 219,950 2,000,000 In-State: - In-State: Tier 2 Tier 1 2016 2017 2016 2017 2016 2017 1,000,000 Solar Tier 1 Non-Carve-Out Tier 2 Tier 1 Solar Carve-Out In-state: Tier 1 Non-Solar 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Online in 2004 or before Online after 2004 RECs Retired for Maryland RPS Compliance, by Maryland REC Retirement, by Location and RPS Plant Age and RPS Category Category 7
F INDINGS : R ATE I MPACTS Compliance costs peaked at 1.8% of retail Maryland’s RPS compliance costs, as a share of ▪ ▪ electric utility bills in 2016, fell to 1.0% in retail bills, place it in the middle of PJM states 2017 2.0% 1.6% 1.2% 0.8% 0.4% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 Tier 1 Solar Carve-out Tier 1 Non-Carve-out Tier 2 Total Maryland RPS Ratepayer Impact as a Percent of RPS Ratepayer Impact as a Percent of Total Total Retail Bills Retail Bills Across PJM (2010-2017) 8
F INDINGS : R ATE I MPACTS (cont.) Maryland’s carve -out requirements, especially for offshore wind, ▪ will likely raise future RPS compliance costs $10 /mo. $8 $6 RECs SRECs $4 ORECs RECs (25% RPS) $2 RECs+SRECs (25% RPS) Total (25% RPS) $0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Estimated Average Monthly RPS Compliance Costs for Maryland Residential Customers, 25% RPS and 50% RPS 9
F INDINGS : E MISSIONS PJM-wide CO 2 emissions were ▪ lbs/MWh 1,600 approximately 0.8% lower in 2017 1,400 than they would have been absent 1,200 the Maryland RPS ▫ 1,000 Assumes all retired RECs supported resources that would not have 800 operated otherwise 600 ▫ Given Maryland’s small contribution to PJM energy sales (8%), this impact is 400 notable 200 By contrast, the SO 2 and NOx ▪ 0 emissions profiles of Maryland RPS 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 resources, on average, are equal Maryland Net Generation PJM Net Generation Maryland RPS Generation to or slightly higher than net PJM Weighted Average of Carbon Emissions in Maryland and PJM, generation since 2010 by Electric Generation Category 10
F INDINGS : J OBS The Maryland RPS has resulted in modest in-state economic development, ▪ including jobs with higher-than-average salaries 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% MD DC DE IL MI NC NJ OH PA Solar Jobs Renewable Gen. Jobs Clean Energy Jobs Energy Sector Jobs Change in Energy Sector Job Categories in Select States in PJM, from 2016 to 2018 11
F INDINGS : J OBS (cont.) 20,000 FTE Jobs The Maryland RPS will ▪ generate an estimated 39,300 530 1,133 full-time equivalent (FTE) jobs 16,000 1,122 and $7.6 billion in in-state 671 sales revenue from 2019-2030 12,000 7,402 6,361 O&M (indirect/induced) Mid-Atlantic Companies with the 8,000 Potential to Supply OSW Components O&M (direct) 404 Industry MD DE NJ VA PA Electronics 1 0 3 2 15 854 Construction Manufacturing & assembly 17 0 1 6 17 (indirect/induced) 2,321 4,000 7,586 7,677 Installation, construction, materials 13 2 1 5 28 Construction Maintenance, logistics, transportation 16 0 4 34 6 (direct) Services 6 2 6 34 4 3,097 TOTAL 53 4 15 81 70 0 Solar UPV Solar DPV OSW Cumulative Full-Time Equivalent Job Creation in Maryland, by Technology, 50% RPS 12
F INDINGS : E NVIRONMENTAL J USTICE Environmental justice (EJ) ▪ communities have received a disproportionately low share of the benefits associated with renewable energy projects in Maryland ▫ EJ communities represent 43% of the state’s population, but receive 25% of the overall benefits associated with utility-scale renewable energy ▫ Distributed solar projects in Maryland are also less likely in EJ communities Maryland Environmental Justice Communities and RPS-Certified Projects 13
P ARTING T HOUGHTS Maryland RPS Additional resources in the report ▪ ▪ ▫ ▫ Sparked new wind and solar capacity and will Primers on non-RPS policies spur offshore wind ▫ Quantification of technical and economic ▫ Modestly increased jobs while lowering CO 2 potential for all types of renewable energy emissions (RE) throughout PJM ▫ ▫ Is unusual in allowing MSW and BLQ Detailed discussion of REC markets ▫ ▫ Met goals to date, at a reasonably low cost Review of the impacts of policy changes to the Maryland RPS ▫ The future of the Maryland RPS ▪ Evaluation of potential strengths and weaknesses of a variety of potential policy depends on what goals are most changes that apply to other states as well important to policymakers ▫ Some goals necessarily involve trade-offs ▫ Past goals of RPS may not match desired goals going forward 14
C ONTACT I NFORMATION Matthew Hoyt Rebecca Widiss mhoyt@exeterassociates.com rwidiss@exeterassociates.com 410.992.7500 410.992.7500 15
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