maritimes wind exports to new england

John Dalton

poweradvisoryllc.com

Tel: 978 369-2465

CanWEA 2009: Infinite Possibilities

Evaluation of Opportunities and Barriers to Wind

Power Exports from the Maritime Provinces to the

US Northeast

September 21, 2009

mailto:[email protected]

Maritimes wind power potential

New England’s need for renewable energy

Renewable Portfolio Standard demand

Attempting to develop its resource potential

Value of renewable energy in New England

Transmission barriers to exports

Existing infrastructure

Rate pancaking

Addressing transmission barriers

Integrating electricity systems

Eliminating rate pancaking

Building additional transmission

Overview of Presentation

Power Advisory LLC 2009

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5,500 to 7,500 MW of wind economic in Maritimes

Greater than load in region for many hours

Indicating a need to export

Current system can integrate about 2,100 MW without

major upgrades

Integrating more wind power requires:

Upgrades of transmission within and between

provinces

Increased transmission capacity for exports of wind

Better coordination among system operators

Significant wind power potential in the Maritime Provinces


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3

Lack of fuel diversity and GHG constraints causing

region to seek lower cost, non-carbon generation

New England renewable energy demand driven by

Renewable Portfolio Standards (RPS)

Regional Greenhouse Gas Initiative

Federal CO2 Cap and Trade increasingly likely

RPS require growing fraction of electricity supplied

come from renewable resources

Most RPS programs use Renewable Energy

Certificates (REC)

Wind power from Maritimes can participate in RPS if

power also delivered

New England likely to need additional renewable energy


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The RPS requirements are expressed in energy, but

converted to a renewable capacity requirement (Blue Line)

New England demand increases given RPS requirements


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Demand for Class I Renewable Energy Resources in New England

Capacity Requirement assumes that 60% of the capacity is provided by resources with a

capacity factor of 34% (e.g., wind) and that 40% is provided by resources with a capacity

factor of 80%.

Constraints on renewable resource availability and siting

limiting ability of local renewables to meet RPS

Massachusetts RPS had its first surplus in 2007

States are addressing supply constraints

Massachusetts: One Stop Permitting

Maine: Designating areas for wind project

development

New England Governors’ Conference recently

released a Renewable Energy Blueprint

More than 10,000 MW of wind potential in region

“Each state seeking aggressive development of

potential”

New England attempting to develop its resource potential



Value of wind power in New England from Maritimes =

REC value + energy value in market

REC Ceiling value: alternative compliance payment

Electricity supplier penalty if not enough RECs

($61/REC in 2009)

Value of energy in New England depends on natural

gas prices

$35/MWh (August 2009)

$78/MWh (August 2008)

Floor value of RECs cost of renewable generation

needed to meet RPS

Estimated to be about $98 per MWh in 2010 All US$

Renewable energy values depends on market conditions


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QuébecPeak Load: 37,230

Installed Capacity: 38,236*

720 MW (NB–>QC)

1,000 MW (QC–>NB)

New BrunswickPeak Load: 3,000

Installed Capacity: 4,266

P.E.IPeak Load: 205

Installed Capacity: 125

222 MW (NB–>PEI)

124 MW (PEI–>NB)

Nova ScotiaPeak Load: 2,261


300 MW (NB–>NS)

350 MW (NS–>NB)

New EnglandPeak Load: 27,993


1,000 MW (NB–>NE)

550 MW (NE–>NB)Power Advisory LLC 2009

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N. MainePeak Load: 120

Installed Capacity: 130

115 MW (NB–>NME)

105 MW (NME–>NB)

Exports from Maritimes likely to go through New Brunswick

*Excludes 5,428 MW of

Churchill Falls capacity

If not originating in New Brunswick, exports pay two

transmission tariffs

One in province of origin and in New Brunswick

This is rate pancaking

Analysis suggests exports economic only if one tariff

paid

Transfer capacity from New Brunswick to New England

limited and under long-term reservations

Capacity often available on a short-term (daily) basis

Proposed New England transmission projects would

increase transfer capacity

Maine Power Reliability Project by 400 MW

Transmission key market barrier to additional exports


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System operators should pursue further opportunities

for integration and coordination of systems to allow

increased electricity interchanges

Allowing more wind or reducing costs of

integrating wind

Need to eliminate rate pancaking by adopting uniform

transmission tariff in the Maritimes

Would result in cost shifting

Could be part of broader plan that includes

transmission investment

Strategies to address transmission barriers



Build additional transmission to enable additional

wind generation for export

Analysis suggests that ISO-NE market prices need

to increase to support transmission investment

Unless costs of facilities are shared with other

customers based on broad societal benefits of wind

Strategies to address transmission barriers (cont’d)



Introducing Power Advisory

Power Advisory specializes in electricity market analysis and strategy, power procurement, policy development, regulatory and litigation support, resource planning and project feasibility assessment.

We offer clients insightful analyses based on detailed understanding of market fundamentals and sources of competitive advantage.

We have extensive experience with renewable energy technologies, having assisted Ontario develop its Standard Offer and Feed-in Tariff Programs and advised numerous clients on renewable energy investment opportunities.

For additional information regarding our services, please contact:

John Dalton

[email protected]

978-369-2465


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Introducing Power Advisory

Clients include:

Algonquin Power

Atlantic Power

Bluewater Power Generation

Bruce Power

Canadian Wind Energy Association

Connecticut Resources Recovery Authority

Great Lakes Power

Manitoba Hydro

National Energy Board

Natural Resources Canada

Northland Power

New Jersey Resources

Ontario Energy Board

Ontario Power Authority

Suncor

TransAlta

TransCanada

Vermont Public Service Board

Wheelabrator Technologies, Inc.


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maritimes wind exports to new england

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