Renewable Energy Technology Assessments - Kauai Island Utility ...

More documents

Recommendations

Info

Kaua’i Island Utility Cooperative Renewable Energy Technology Assessments 6.0 Renewable Energy Financial Incentives solar and wind resources have the highest REC values (up to 20 ¢/kWh for solar), while biomass, geothermal, and hydro are much lower. Texas, Massachusetts, Connecticut and New Jersey all have REC trading markets used to help meet state mandates for renewable energy. In New England, where demand is higher than the current renewable energy supply, REC values are as high as 5 ¢/kWh, which is as much as the base energy value. In Texas, the values are more modest, around 1.5 ¢/kWh. Implication for KIUC: The newly modified renewable portfolio standard for Hawaii creates the potential for KIUC to benefit from renewable energy credits. The isolation of the Hawaiian islands combined with varying population and renewable resource distributions among the islands, makes trading of renewable energy credits a sensible method to comply with the requirements of the RPS. On the one hand, KIUC could purchase excess RECs from other island utilities. This would limit capital expenditures on new renewable energy plants – plants which may not be needed in the near term to meet the island’s electrical needs. On the other hand, Kauai has ample renewable resource potential. If new projects were developed, the excess RECs could be sold to other utilities for additional revenue. 6.3 Summary Federal and state governments have developed a number of policy approaches to support renewable energy development. Table 6-4 summarizes the various incentive programs evaluated in this study. The most prevalent and successful policies have been tax incentives, particularly the federal PTC, and to a lesser extent the ITC and accelerated depreciation. The well-intentioned REPI program had limited success in spurring development because of inconsistent funding. Tax-exempt entities are currently limited to grant and loan programs, of which few exist at present. Moreover, federally-funded grant and loan programs have typically been intended to support small-scale demonstration projects rather than utility-scale deployment. Public utilities therefore draw the greatest benefit from their tax-exempt status and the ability to utilize low cost debt. KIUC may also wish to further investigate the benefits of green pricing programs and renewable energy credits. 21 March 2005 6-17 Black & Veatch
Kaua’i Island Utility Cooperative Renewable Energy Technology Assessments 6.0 Renewable Energy Financial Incentives Table 6-4. Renewable Energy Incentives Summary. Incentive Description Recommendation Federal Incentives Production Tax Credit Investment Tax Credit Reduced Depreciation Life Renewable Energy Production Incentive 2002 Farm Bill 1.8 cent/kWh (inflation adjusted) for wind, solar, geothermal, and closed loop biomass electricity. 0.9 cent/kWh credit for open-loop biomass, small irrigation power, and municipal solid waste. Wind and closed-loop biomass receive PTC for 10-years, other technologies receive credit for five years. Taxable entity needs to be part of project structure to claim credit. Consider power purchase from a taxable third-party developer who can claim the PTC. Investigate alternative project structures to may leverage the PTC and KIUC low interest financing. 10 percent investment tax credit for new solar and geothermal projects Not applicable under tax-exempt financing. 5-year accelerated depreciation on alternative energy projects. Requires ownership by taxable entity. 10-year 1.8 cent/kWh (inflation adjusted) for wind, biomass, geothermal, and solar. This a public entity alternative to the PTC. Subject to annual congressional appropriations and substantially underfunded. Value-Added Agricultural Product Market Development Grants, and Renewable Energy and Energy Efficiency Improvements programs provide grant, loan, and loan guarantee for development of renewable energy and energy efficiency projects. REDL&G Program to provide grants, loans, and loan guarantees to agricultural producers and rural small businesses for development of renewable energy projects. RUS Loans The USDA RUS offers low interest loans to rural utilities at US Treasury rates normally not available to public or private borrowers. High Energy Cost Program Tribal Energy Program Provides grants for renewable and energy conservation projects to help mitigate high energy costs. Provides grant funding for renewable energy and conservation project predevelopment and development activities on Indian Reservations. Utilize if taxable entity is involved in project. Monitor the status of this program and apply for funding should the program be extended in the future. Consider applying for development grants for project development and construction expenses. Publicize REDL&G program to coop members. Consider applying for RUS financing for renewable energy projects. Consider applying for grant funding for development/construction of renewable energy projects. Publicize program to the Department of Hawaiian Home Lands and work with the department to investigate grant funding if feasible. 21 March 2005 6-1 Black & Veatch
Page 1 and 2:
11401 Lamar Black & Veatch Corporat
Page 3 and 4:
Page 3 Kaua’i Island Utility Coop
Page 5 and 6:
Principal Investigators: Ryan Pletk
Page 7 and 8:
Kaua’i Island Utility Cooperative
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134: Kaua’i Island Utility Cooperative
Page 183: Kaua’i Island Utility Cooperative
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Page 241 and 242:
Page 243 and 244:
Page 245 and 246:
Page 247 and 248:
Page 249 and 250:
Page 251 and 252:
Page 253 and 254:
Page 255 and 256:
Page 257 and 258:
Page 259 and 260:
Page 261 and 262:
Page 263 and 264:
Page 265 and 266:
Page 267 and 268:
Page 269 and 270:
Page 271 and 272:
Page 273 and 274:
Page 275 and 276:
Page 277 and 278:
Page 279 and 280:
Page 281 and 282:
Page 283 and 284:
Page 285 and 286:
Page 287 and 288:
Page 289 and 290:
Page 291 and 292:
Page 293 and 294:
Page 295 and 296:
Page 297 and 298:
show all

Renewable Energy Technology Assessments - Kauai Island Utility ...

Create successful ePaper yourself

Delete template?

Save as template?