The presentation discussed the Renewable Energy Foundation's (REF) analysis of renewable energy policies and subsidies in the UK. REF is a nonprofit think tank that analyzes energy policies through empirical research. REF has concluded that the UK's Renewables Obligation subsidy for wind is regressive and hurts consumers. Instead, REF recommends focusing on energy efficiency, district heating from waste, and firm renewable sources like biomass. The presentation also briefly described renewable energy models in Colorado, at the National Renewable Energy Laboratory, and by the Rocky Mountain Institute that support some of REF's conclusions.

1. Renewable Energy World Europe 2012
Renewable Track
Session 3: Renewable Energy Policy & Finance
Leslie Martel Baer, MS, MA, Strategist
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 1

2. Acknowledgements
 University of Colorado Business School
Global Energy Management Program
 Herb Rubenstein, Lecturer
 John Constable, Head of Policy &
Research, Renewable Energy Foundation
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 2

3. Agenda
 Renewable energy policies
 Why RE policies?
 How do different policies compare?
 The Renewable Energy Foundation and wind
 Other models
 Colorado: Wind as a least cost source
 NREL: Room for coal
 RMI: Down to 26% Fossils by 2050
 Wrap up, Q&A
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 3

4. Renewables Policies
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 4

5. Example:
UK Renewables Obligation (RO)
 Establishes a standard
for electricity suppliers
 Suppliers meet
standard through ROCs
 Suppliers pass cost to
consumers
 Regressive mechanism
 Efficient market (?)
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 5

6. Example:
US’s Production Tax Credit
 Credit to developers
 Requires either
 Raising of taxes
 Cutting of programs
 Can be regressive
 Attractive only to
developers with a tax
bill to offset
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 6

7. Total Installed Wind Generation
Capacity, 1992–2010
Stability Matters: U.S. driven by
temporary stability, multiple
incentives, urgency
0
10000
20000
30000
40000
1992 1997 2002 2007
UK
U.S.
Colorado
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 7

8. Wind Generation Capacity as a
Percentage of Total Capacity
1992–2010
Colorado’s RES Similar to UK’s RO:
Paid for by rate payers
U.S. states are driving RE action
0%
2%
4%
6%
8%
10%
1992 1997 2002 2007
UK
U.S.
Colorado
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 8

9. What is the
Renewable Energy Foundation?
 Non-profit
 Think tank
 “sustainable
development for the
benefit of the public by
means of energy
conservation and the
use of renewable
energy”
 Award winning
 Other Agenda?
 REF’s Approach
 Analyze the data
 Empirical research
 REF’s Conclusion
 The RO is regressive
 Hurts consumers
 Emphasize
○ Efficiency
○ Baseload renewables
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 9

10. REF’s Evolving Stance
2006: 25 GW wind may be too
much
 Distributed wind helps smooth
variability; resource remains
volatile
 Weather systems are bigger than
countries, making smoothing
difficult
 Wind requires firm generators to
cycle more than without wind
 Wind reduces investment in more
firm renewables
 Dramatic increases of wind could
cause struggles with system
balancing
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 10

11. REF’s Evolving Stance
2006: 25 GW wind may be too
much
2011: Address indirect & direct
costs, macroeconomics
 Distributed wind helps smooth
variability; resource remains
volatile
 Weather systems are bigger than
countries, making smoothing
difficult
 Wind requires firm generators to
cycle more than without wind
 Wind reduces investment in more
firm renewables
 Dramatic increases of wind could
cause struggles with system
balancing
 Avoid regressive RE levies
 Non-profits: implement climate,
efficiency agenda
 Efficiency to cushion lower
income consumers from prices
 Focus: firm generation
(biomass), district heating
(waste)
 Policies, costs, savings on bills
 Make data accessible and more
transparent to consumers
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 11

12. Where Do REF’s
Recommendations Apply?
 Policy-making bodies: dig deep into the
technical and economic implications
 Question “prevailing wisdom”
 Regionalism is crucial for analysis (REF’s
analyses do not apply globally)
 A “price” on carbon emissions may
ultimately be the best mechanism for
market efficiencies
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13. Other Models
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 13

14. Colorado GEO:
Wind as a Least Cost Resource
 Utility-scale RE
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 14

15. Colorado GEO:
Wind as a Least Cost Resource
 Utility-scale RE
 Water issues
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16. Colorado GEO:
Wind as a Least Cost Resource
 Utility-scale RE
 Water issues
 Large geographic
region; weather
systems factor
differently
 Large grid; balancing
factors differently
 Mid-continent NG (?)
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 16

17. NREL: Making Room for Coal
 The “right” carbon
cap and RPS
 Reduce emissions w/
more coal in portfolio
(not CCS)
 Cheap domestic fuel
 Modest impact to
prices
 Unlikely, but feasible
Technical Report
NREL/TP­6A2­48258
May 2010
Evaluating Renewable
Portfolio Standards and
Carbon Cap Scenarios in
the U.S. Electric Sector
Lori Bird, Caroline Chapman, Jeff Logan,
Jenny Sumner, and Walter Short
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 17

18. Reinventing Fire:
An Optimal Energy
Scenario to 2050
One of Rocky Mountain Institute’s scenarios
shows the “best case” dovetails with REF’s
recommendations:
• Incentivize efficiency and DSM first, fairly
• Renewables make it to parity
• Transparency for and by producers,
suppliers, consumers is essential
• Players operate under values, goals that fit
their functions (e.g., suppliers supply)
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19. Is REF Right?
 Yes…
 We need people asking these questions
 The UK focus is not in the best place
 Other think tanks support REF’s analysis
○ Efficiency and DSM are the crucial first steps
○ RPSs and carbon caps will change the landscape
 But…
 Solutions are not global
 Policies must consider the region
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 19

20. Renewable Energy World Europe 2012
Renewable Track
Session 3: Renewable Energy Policy & Finance
Leslie Martel Baer, MS, MA, Strategist
leslie.baer@energyintersections.com
13 June 2012 REW Europe 2012 | L. M. Baer | REF and the U.K.'s Wind Subsidies 20