state of the energy industry, january 2006

1. “STATE OF RENEWABLE ENERGY 2006”
Presented to:
State of the Energy Industry
US Energy Association
January 17, 2006
Michael Eckhart, President
American Council On Renewable Energy
www.acore.org

2. American Council On Renewable Energy
TRADE
250
MEMBERS
FINANCE
2
POLICY

3. 2005 in Review
• Industry grew 25% to $30 Billion in sales
• International policy moved ahead:
– Kyoto Protocol went into effect
– China passed Renewable Energy Law
– Germany confirmed its RE Law
• US policy advanced:
– Energy Policy Act 2005 with RE Incentives
– WGA completed its regional energy plan
3

4. World and US Oil Dilemma
End of an Era … Beginning of an Era
PEAK OIL
NATIONAL
SECURITY
4

5. Climate Change
End of an Era … Beginning of an Era
Changes in Atmospheric Concentrations - 1000 Year History
concentration CO2
360
310
Atmospheric
340
(ppm)
320 Source:
290
NREL
300
1000 1200 1400 1600
1000 1800
1200 2000
1400 1000
1600 1200
1800 1400
2000 1600 1800
280 270
260
250
5
Source: IPCC Third Assessment Report (2001)

6. Early Leadership for Renewable Energy
European Union Policies
Green Certificates
Feed-in Tariffs
Capital grants, Tax relief …
Obligation
Tradable certificates
6

7. China
New Renewable Energy Law Effective 1-1-2006
China’s Power Plan
(Gigawatts)
Year Total RE
2010 650 60
2020 950 120
7

8. State of the Global RE Market
160,000 MW Installed Growing at 25 GW/Year
“NEW RENEWABLES” Plus:
INSTALLED BASE (000 MW)
160 720,000 MW Large Hydro
140 Solar
Geothermal 220,000 MW (th) Biomass
120 Heating
Biomass
100 Windpower 28,000 MW (th) Geothermal
80 Small Hydro Heating
60
77,000 MW (th) Solar Heating
40
1,000 MW of off-grid solar
20 PV systems
0
World DCs EU 25 US Japan Source: Renewables 2005: Global Status Report
Total Renewable Energy = 1,206,000 MW Equivalent
for Electricity and Heating Around the World 8

9. The Challenge of Putting RE into Use
- Regional Resources, Economics, and Politics -
SOLAR ENERGY WIND POWER
GEOTHERMAL BIOMASS
Resource Potential
9

10. US Renewable Energy Markets
30% by 2000
24% by 2013
15% by 825 MW
2015 Wind by 8% by 2020
2007 4% new by 2009
10% by 2.2% by
2015 2011
15% by 2019
105 MW
15% by 10% by 2010
2013 8% by
20% by 10% by 2012 6.5% by 2008
2010 2015
7.5% by 2019
10% by 11% by 2021
1.1% by 2011
2007
2580 MW
by 2009
Arizona Market*
Western Market
Upper Midwest Market
Texas Market
Northeast Market
*Arizona may export but not import RECs to/from other states.
10

11. Projected Impact of RPS Compliance
- From 10 GW in 2003 to 40 GW in 2015 -
11

12. Green Power Marketing
Utility Green Pricing Programs
Growing at a Steady 40% CAGR
Top 10 Green Pricing Programs:
Number of Participants
500,000 • Austin Energy
• Portland General Electric
400,000 • PacifiCorp
• Sacramento
300,000 • Xcel Energy
• National Grid
200,000 • LADWP
• OG&E Electric
100,000 • Puget Sound
• We Energies
- +700 MW of RE Capacity Added to
1999 2001 2003 2005E Support Green Pricing Programs
Source; Lori Bird, NREL 2005
12

13. RE Finance is Entering the Mainstream
Renewable Energy Global M&A
Activity - $ Millions
10000
8000
6000
4000
2000
ACORE’s RE Finance Forum 2005
0
Major IPOs in 2005: 2001 2002 2003 2004 2005
- Q-Cells Germany Estimate
- SunPower USA Projects
- Suntech Taiwan Technology and Service Cos
- Suzlon India Developers
13

14. Wholesale Power Generation
US Wind Power
US Wind Power Installations
(MW/Year)
3500
3000
Installed
2500 RPS Required
New
2000
1500
1000 9,700 MW Installed Base 2005
35,000 MW estimated by 2015
500 Key Issues:
. Turbine availability
0 . RPS extension past 2007
1990 1995 2000 2005 2010 . Siting and Transmission
Sources: AWEA, GE Wind, and ACORE
14

15. Location of US Windfarms
Per capita income in 1999
45,000
25,000
5,000
Status
Completed
Proposed
Speculative
Under development
15

16. Location of US Windfarms
Per capita income in 1999
45,000
25,000
5,000
Status
Completed
Proposed
Speculative
Under development
16

17. Other Wholesale Power Generation
Geothermal, Hydropower, and
Solar Thermal-Electric
Solar Dish-
Sterling:
350 MW
Contracts
500 MW contracts
Solar Trough:
50 MW
Under
Construction
Incremental Hydro 17

18. Distributed Generation
Solar PV
$7 Billion/Year Global Industry
US Solar PV Installations
(MW/Year)
250
Grid
200 Off-Grid
150
Approximate 5,000 MW in place
Adding 1,500 MW/year globally
100
Key Issues:
50 . US 30% tax credit
. California’s $3.2 B program
. Silicon shortage
0
2000 2001 2002 2003 2004 2005 2006
E . Global competition
Sources: PV News and ACORE 18

19. Renewable Fuels
US Ethanol and Biodiesel
Over $2 Billion Invested in 2005
Million Gallons / Year
5000
4500
4000
3500
Corn-Based
3000 Ethanol
2500
2000
1500
1000
Biofuel options:
500
• Corn-based ethanol fuel
0
1985 1995 2005
• Cellulosic ethanol fuel
Source: Renewable Fuels Association and ACORE Est • Bio-diesel - US and Europe
19

20. “Policies for Phase II”
October 17-18, 2005, Cannon Caucus Room, Washington, DC
Co-convened with the RE/EE Caucuses of the US Senate and House
20

21. Renewable Energy Targets and Forecasts
% of Total Energy
60%
50%
40%
30%
20%
10%
0%
2000 2010 2020 2030 2040 2050 2060
Global Perspectives A3 Germany
Today (Global) IEA World Energy Outlook Ref
Shell Dynamics (Global) European Union
Navigant (Global) Today (US)
Source:
Pew Tech Triumphs Policy (US) Aitkin (US)
NREL
GHG (Hoffert) GPRA05 EERE (US)
EIA Reference (US) 21

22. Renewable Energy Targets and Forecasts
% of Total Energy
60%
50%
CLIMATE CHANGE
40%
30%
20%
10%
USG
0%
2000 2010 2020 2030 2040 2050 2060
Global Perspectives A3 Germany
Today (Global) IEA World Energy Outlook Ref
Shell Dynamics (Global) European Union
Navigant (Global) Today (US)
Source:
Pew Tech Triumphs Policy (US) Aitkin (US)
NREL
GHG (Hoffert) GPRA05 EERE (US)
EIA Reference (US) 22

23. “Phase II” of Renewable Energy in America
Phase I: “Development” Phase II: “Utilization”
– Past 30 Years – Next 30 Years
– Focus on RD&D – Focus on National Needs
– Develop Technologies: – Implement Solutions:
• Wind • Hybrids + Biofuels
• Solar • Solar + Efficiency
• Hydro • National REC Trading
• Geothermal • Transmission
• Biomass • Investment
• Biofuels • Jobs
– “Commercialization” – “Utilization”
– Key = Innovative Policy – Key = Stable Policy
– Lead: Federal – Lead: State / Federal
23

24. Summary
1. RE technologies are ready for use
2. Large and growing global market
3. Emerging US market
4. Deployment policy led at the State level
5. Federal incentives -- essential to success
6. US moving to “Phase II”
7. Need for policy stability and commitment
24

25. Thank You
www.acore.org
Michael Eckhart
American Council On Renewable Energy
202.393.0001 ext.7581
meckhart@acore.org