Anderson, Aaron D. EMGT Field Project

137 Pages·2010·3.35 MB·English

Engineering Management
Field Project

A Critical Analysis of the Viability and Impacts of Solar
Energy Carve-Outs in Renewable Portfolio Standards

By

Aaron D. Anderson

Fall Semester, 2010

An EMGT Field Project report submitted to the Engineering Management Program
and the Faculty of the Graduate School of The University of Kansas
in partial fulfillment of the requirements for the degree of
Master’s of Science

Herb Tuttle
Committee Chairperson

Michael Katzman
Committee Member

Robert Healy
Committee Member

Date accepted: November 19, 2010
TABLE OF CONTENTS

Page No.
List of Abbreviations and Acronyms .................................................................................................. viii
Acknowledgements .................................................................................................................................. x
Executive Summary ................................................................................................................................ xi
Chapter 1 - Introduction ......................................................................................................................... 1 
1.1  Study Objectives and Methodology....................................................................................... 2 
1.2  Organization of Report .......................................................................................................... 2 
Chapter 2 - Literature Review ................................................................................................................ 4 
2.1  Renewable Energy Overview ................................................................................................ 4 
2.2  Solar Energy Overview ......................................................................................................... 6 
2.3  Renewable Portfolio Standards.............................................................................................. 7 
2.4  Solar Energy Carve-Outs ....................................................................................................... 9 
2.4.1  Economies of Scale .................................................................................................... 10 
2.4.2  Diversification ............................................................................................................ 12 
2.4.3  Green Jobs .................................................................................................................. 13 
2.5  Summary and Conclusions .................................................................................................. 14 
Chapter 3 - Overview of Study Investigations ..................................................................................... 15 
Chapter 4 - Characterization of Carve-Out States (Investigation 1) ................................................ 17 
4.1  Investigation Overview ........................................................................................................ 17 
4.2  Generation Portfolio ............................................................................................................ 17 
4.2.1  Methodology ............................................................................................................... 17 
4.2.2  Results ........................................................................................................................ 18 
4.3  Electric Rates ....................................................................................................................... 19 
4.3.1  Methodology ............................................................................................................... 19 
4.3.2  Results ........................................................................................................................ 20 
4.4  Energy Consumption ........................................................................................................... 21 
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4.4.1  Methodology ............................................................................................................... 21 
4.4.2  Results ........................................................................................................................ 22 
4.5  Air Quality ........................................................................................................................... 23 
4.5.1  Methodology ............................................................................................................... 23 
4.5.2  Results ........................................................................................................................ 24 
4.6  Wealth .................................................................................................................................. 25 
4.6.1  Methodology ............................................................................................................... 25 
4.6.2  Results ........................................................................................................................ 25 
4.7  Summary and Conclusions .................................................................................................. 26 
Chapter 5 - National Differential Economic Analysis (Investigation 2) ............................................ 28 
5.1  Investigation Overview ........................................................................................................ 28 
5.2  Capacity Factor Characterization ........................................................................................ 29 
5.2.1  Wind Energy Capacity Factors ................................................................................... 29 
5.2.2  Solar Energy Capacity Factors ................................................................................... 31 
5.3  Pro Forma Economic Analysis ............................................................................................ 34 
5.3.1  Pro Forma Inputs ........................................................................................................ 34 
5.3.2  Pro Forma Results ...................................................................................................... 36 
5.3.3  Busbar Cost Sensitivity Analysis ............................................................................... 40 
5.4  Summary and Conclusions .................................................................................................. 42 
Chapter 6 - State Case Studies (Investigation 3) ................................................................................. 45 
6.1  Investigation Overview ........................................................................................................ 45 
6.2  Economic Evaluation Methodology .................................................................................... 46 
6.3  Environmental Evaluation Methodology ............................................................................. 48 
6.4  Case Study Results – Missouri ............................................................................................ 50 
6.4.1  RPS Overview ............................................................................................................ 50 
6.4.2  Economic Impacts ...................................................................................................... 52 
6.4.3  Environmental Impacts ............................................................................................... 55 
6.4.4  Summary and Conclusions ......................................................................................... 55 
6.5  Case Study Results – New Jersey ........................................................................................ 56 
6.5.1  RPS Overview ............................................................................................................ 56 
6.5.2  Economic Impacts Analysis ....................................................................................... 58 
6.5.3  Environmental Impacts ............................................................................................... 61 
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6.5.4  Summary and Conclusions ......................................................................................... 61 
6.6  Case Study Results – New Mexico ...................................................................................... 62 
6.6.1  RPS Overview ............................................................................................................ 62 
6.6.2  Economic Impacts Analysis ....................................................................................... 63 
6.6.3  Environmental Impacts ............................................................................................... 66 
6.6.4  Summary and Conclusions ......................................................................................... 66 
6.7  State Case Study Conclusions ............................................................................................. 67 
Chapter 7 - Conclusions ........................................................................................................................ 69 
Chapter 8 - Suggestions for Additional Work ..................................................................................... 72 
8.1  Declining Capital Cost Evaluation ...................................................................................... 72 
8.2  Green Jobs ........................................................................................................................... 72 
8.3  Time of Day Usage .............................................................................................................. 72 
8.4  Location of Solar Energy Manufacturing Facilities ............................................................ 73 
Bibliography ........................................................................................................................................... 74

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LIST OF TABLES

Table No. Page No.

Table 1. Generation Portfolio Summary .................................................................................................. 18 
Table 2. Electric Rates Summary ............................................................................................................. 20 
Table 3. Energy Consumption Summary ................................................................................................. 22 
Table 4. Air Quality Summary ................................................................................................................. 24 
Table 5. Wealth Summary ....................................................................................................................... 26 
Table 6. Solar Energy Gross Capacity Factor Estimates by State ........................................................... 33 
Table 7. National Differential Analysis Results ...................................................................................... 37 
Table 8. Summary of Results from Investigation Two ............................................................................ 44 
Table 9. Missouri Renewable Portfolio Standard Mandates .................................................................... 51 
Table 10. Missouri Case Study Economic Impacts Summary ................................................................. 52 
Table 11. Missouri Case Study Environmental Impacts Summary ......................................................... 55 
Table 12. New Jersey Renewable Portfolio Standard Mandates ............................................................. 57 
Table 13. New Jersey Case Study Economic Impacts Summary ............................................................. 59 
Table 14. New Jersey Case Study Environmental Impacts Summary ..................................................... 61 
Table 15. New Mexico Renewable Portfolio Standard Mandates ........................................................... 62 
Table 16. New Mexico Case Study Economic Impacts Summary .......................................................... 64 
Table 17. New Mexico Case Study Environmental Impacts Summary ................................................... 66 
Table 18. State Renewable Portfolio Standards Milestone Summary ..................................................... 85 
Table 19. Net Electric Generation by State by Fuel Type (GWh) (2009) ............................................... 89 
Table 20. Average Retail Electric Rates by State by Sector (¢/kWh) (2009) .......................................... 90 
Table 21. Energy Consumption by State (2008) ...................................................................................... 91 
Table 22. CO Emissions by State (2007) ................................................................................................ 92 
2
Table 23. Nonattainment Statuses (2010) ................................................................................................ 93 
Table 24. Wealth Indices by State (2008) ................................................................................................ 99 
Table 25. State Renewable Portfolio Standards Summary .................................................................... 100 
Table 26. Wind Energy Gross Capacity Factor Estimates by State ....................................................... 101 
Table 27. Historical Missouri IOU Electric Sales, Customers, and Usage (2001-2008) ....................... 102 
Table 28. Historical Missouri Average Retail Electric Rates by Sector (2000-2008) ........................... 103 
Table 29. Missouri AC Energy Estimates and Calculated Busbar Costs ............................................... 104 
Table 30. Missouri Case Study Solar PV Premium Calculation ............................................................ 107 
Table 31. Missouri Case Study Residential Rate Impacts Detailed Calculations .................................. 108 
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Table 32. Missouri Case Study Life Cycle Analysis Detailed Calculations .......................................... 109 
Table 33. Historical New Jersey Retail Electric Sales by Sector (2000-2008) ...................................... 111 
Table 34. Historical New Jersey Retail Customers by Sector (2000-2008) ........................................... 111 
Table 35. Historical New Jersey Average Retail Electric Rates by Sector (2000-2008) ....................... 111 
Table 36. New Jersey AC Energy Estimates and Calculated Busbar Costs .......................................... 112 
Table 37. New Jersey Case Study Solar PV Premium Calculation ....................................................... 113 
Table 38. New Jersey Case Study Residential Rate Impacts Detailed Calculations .............................. 114 
Table 39. New Jersey Case Study Life Cycle Analysis Detailed Calculations ...................................... 115 
Table 40. Historical New Mexico Electric Sales, Customers, and Usage (2001-2008)......................... 116 
Table 41. Historical New Mexico Average Retail Electric Rates by Sector (2000-2008) ..................... 117 
Table 42. New Mexico AC Energy Estimates and Calculated Busbar Costs ........................................ 118 
Table 43. New Mexico Case Study Solar PV Premium Calculation ..................................................... 123 
Table 44. New Mexico Case Study Residential Rate Impacts Detailed Calculations ........................... 124 
Table 45. New Mexico Case Study Life Cycle Analysis Detailed Calculations ................................... 125 

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LIST OF FIGURES

Figure No. Page No.

Figure 1. Net Generation by Energy Source (2009) .................................................................................. 5 
Figure 2. Net Renewable Generation by Energy Source (2009) ................................................................ 5 
Figure 3. Wind Energy Gross Capacity Factor Estimates by State .......................................................... 30 
Figure 4. National Busbar Cost Differential – Wind Versus Fixed-Tilt Solar PV ................................... 38 
Figure 5. National Busbar Cost Differential – Wind Versus Single-Axis Tracking Solar PV ................ 39 
Figure 6. Sensitivity Analysis Tornado Diagram – Wind at 35% CF ...................................................... 41 
Figure 7. Sensitivity Analysis Tornado Diagram – Fixed-Tilt PV at 18% CF ........................................ 41 
Figure 8. Sensitivity Analysis Tornado Diagram – Single-Axis Tracking PV at 21% CF ...................... 41 
Figure 9. Life-Cycle Carbon Dioxide Emissions from Wind and Solar Energy ...................................... 49 
Figure 10. Missouri Levelized Busbar Costs for Fixed-Axis Solar PV at Latitude Tilt .......................... 54 
Figure 11. New Jersey Levelized Busbar Costs for Fixed-Axis Solar PV at Latitude Tilt ...................... 60 
Figure 12. New Mexico Levelized Busbar Costs for Fixed-Axis Solar PV at Latitude Tilt .................... 65 
Figure 13. Average Annual Solar PV Resource at Latitude Fixed Tilt.................................................... 82 
Figure 14. Direct Normal Solar Irradiance Resource Map ...................................................................... 83 
Figure 15. International Photovoltaic Solar Resources ............................................................................ 84 
Figure 16. State Renewable Portfolio Statuses ........................................................................................ 86 
Figure 17. State Renewable Portfolio Standards with Solar/DG Provisions ........................................... 87 

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LIST OF APPENDICES

Page No.

A. Glossary of Terms ....................................................................................................................... 77
B. Conversions and Equivalence List .............................................................................................. 80
C. Solar Insolation Maps ................................................................................................................. 81
D. Renewable Portfolio Standard Summaries ................................................................................. 85
E. Investigation 1 (Characterization of Carve-Out States) Detailed Tables .................................... 88
F. United States Wind Resource Potential .................................................................................... 100
G. Investigation 3 (State Case Studies) Detailed Tables for Missouri Case Study ........................ 102
H. Investigation 3 (State Case Studies) Detailed Tables for New Jersey Case Study ................... 110
I. Investigation 3 (State Case Studies) Detailed Tables for New Mexico Case Study ................. 116
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LIST OF ABBREVIATIONS AND ACRONYMS

AC Alternating Current

BPU Board of Public Utilities
Btu British thermal unit

CdTe Cadmium Telluride
CH Methane
4
CO Carbon Monoxide
CO Carbon Dioxide
2
CSP Concentrating Solar Power

DC Direct Current
DG Distributed Generation
DNI Direct Normal Irradiance
DOE Department of Energy
DSIRE Database of State Incentives for Renewable Energy

EIA Energy Information Administration
EMGT Engineering Management
EPA Environmental Protection Agency
EPIA European Photovoltaic Industry Association

FIT Feed-In Tariff

GCF Gross Capacity Factor
GDP Gross Domestic Product
GHG Greenhouse Gases
GW Gigawatt
GWh Gigawatt-hour

Hg Mercury

IOU Investor-Owned Utility
ITC Investment Tax Credit

J Joule

KCP&L Kansas City Power & Light
kW kilowatt
kWh kilowatt-hour

LBNL Lawrence Berkeley National Laboratory
LCA Life-Cycle Analysis

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MACRS Modified Accelerated Cost Recovery System
MMBtu Million British thermal units
MMT Million Tons
MW Megawatt
MWh Megawatt-hour

NAAQS National Ambient Air Quality Standards
NO Nitrogen Oxides
x
NREL National Renewable Energy Laboratory

O Ozone
3

Pb Lead
PM Particulate Matter of 2.5 Microns in Diameter or Smaller
2.5
PM Particulate Matter of 10 Microns in Diameter or Smaller
10
POU Publically-Owned Utility
PSC Public Service Commission
PTC Production Tax Credit
PV Photovoltaic

REC Renewable Energy Credit
RPS Renewable Portfolio Standard

SACP Solar Alternative Compliance Payment
SEIA Solar Energy Information Administration
SO Sulfur Oxide
x
SREC Solar Renewable Energy Credit

TMY Typical Meteorological Year
TW Terawatt
TWh Terawatt-hour

W Watt

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