update on renewable energy market...

54
Copyright © 2008 The Brattle Group, Inc. Antitrust/Competition Commercial Damages Environmental Litigation and Regulation Forensic Economics Intellectual Property International Arbitration International Trade Product Liability Regulatory Finance and Accounting Risk Management Securities Tax Utility Regulatory Policy and Ratemaking Valuation Electric Power Financial Institutions Natural Gas Petroleum Pharmaceuticals, Medical Devices, and Biotechnology Telecommunications and Media Transportation Update on Renewable Energy Market Trends Prepared by: Judy Chang Conference on: Financing Clean Energy Projects under the Reinvestment Act of 2009 Thursday, June 11, 2009 UMass Club 225 Franklin Street Boston

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Page 1: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Copyri

ght ©

2008 T

he B

ratt

le G

roup,

Inc.

Anti

trust

/Co

mp

etit

ion

Co

mm

erci

al D

am

ages

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vir

on

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l L

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atio

n a

nd

Reg

ula

tio

nF

ore

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cono

mic

sIn

tell

ect

ual

Pro

per

tyIn

tern

atio

nal

Arb

itra

tio

nIn

tern

atio

nal

Tra

de

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ity

Reg

ula

tory

Fin

ance

and

Acco

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ng

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k M

anag

em

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riti

esT

axU

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and

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em

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lect

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anci

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ituti

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ark

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Co

nfe

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n:

Fin

an

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g C

lean

En

erg

y P

roje

cts

un

der

the

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vestm

en

t A

ct

of

2009

Th

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Page 2: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

2

Ag

en

da

•O

verv

iew

of

ren

ew

ab

le e

nerg

y d

em

an

d a

nd

m

ark

et

dri

vers

•N

ew

En

gla

nd

’s d

em

an

d a

nd

su

pp

ly b

ala

nce

•T

ran

sm

iss

ion

, o

ne o

f th

e m

ost

sig

nif

ican

t ch

all

en

ges f

or

ren

ew

ab

le r

eso

urc

es

•O

ther

imp

ort

an

t m

ark

et

dyn

am

ics f

or

ren

ew

ab

le

en

erg

y

•T

he B

ratt

le G

rou

p’s

recen

t exp

eri

en

ce

Page 3: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

3

Main

Dri

vers

of

Ren

ew

ab

le E

nerg

y I

nvestm

en

ts

Po

liti

cal

•E

nerg

y security

& d

esire to d

ivers

ify

from

petr

ole

um

-based f

uels

•C

limate

change a

nd r

ene

wable

energ

y ta

rgets

•N

ational and s

tate

energ

y p

olic

ies

Eco

no

mic

•E

nerg

y p

rices, div

ers

ity o

f fu

els

, p

ote

ntial cost of carb

on e

mis

sio

ns

•F

edera

l and s

tate

fin

ancia

l subsid

ies for

rene

wable

pow

er

•T

ariffs,

cost

recovery

fo

r po

we

r p

urc

hase c

ontr

acts

, risk a

llocation

•P

roje

ct costs

inclu

din

g c

osts

of m

ate

rials

, financin

g, and labor

•G

reen c

ert

ific

ate

mark

ets

, R

PS

-dri

ven a

nd v

olu

nta

ry

Oth

ers

•F

inancia

l m

ark

et

(cre

dit c

runch)

•R

esourc

e a

vaila

bili

ty

•E

xchange r

ate

s

Page 4: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

4

Th

e R

en

ew

ab

le P

ort

folio

Sta

nd

ard

(R

PS

) M

ap

of

the U

.S.

Page 5: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

5

Ren

ew

ab

le R

eso

urc

e M

ap

s f

or

the U

.S.

Win

dS

ola

r

Bio

mass

Geo

therm

al

Page 6: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

6

Ad

dit

ion

al R

en

ew

ab

le C

ap

acit

y N

eed

ed

to

Meet

RP

S

Sourc

e:

Rya

n W

iser

and G

ale

n B

arb

ose,

La

wre

nce B

erk

ele

y N

ational La

b,

April 2008

La

wre

nce

Be

rke

ley

Nation

al Labo

rato

ry e

stim

ate

s

tha

t 60

GW

of

ne

w r

ene

wab

le e

ne

rgy

ca

pa

city

will

be

ne

eded

by

202

5.

Tha

t n

um

be

r in

cre

ase

s to

77

GW

by

2025

if inclu

din

g

lon

g-t

erm

go

als

fro

m v

ariou

s s

tate

s.

43

518

357

317

.4W

ax

ma

n

15

026

186

721

.8M

ark

ey

95

19

763

812

.1B

ing

am

an

N/A

20

869

9N

/AB

ase

Case

CO

2

Em

issio

ns

Red

ucti

on

in

2030

(millio

n

metr

ic

ton

s)

Qu

alify

ing

R

en

ew

ab

le

Cap

acit

y in

2030 (

GW

)

Qu

alify

ing

R

en

ew

ab

le

Gen

era

tio

n

in 2

030

(TW

h)

Peak

Eff

ecti

ve

RE

S (

%)

Case

As

su

mp

tio

n

Co

mp

ara

tive

Fin

din

gs

of

the

Pro

po

se

d R

ES

Le

gis

lati

on

Sourc

e:

Sulli

van,

Log

an,

Bird,

an

d S

hort

, “C

om

para

tive

Analy

sis

of

Thre

e P

ropose

d F

edera

l R

ene

wable

Ele

ctr

icity

Sta

ndard

s,

NR

EL,

May

20

09,

pag

e v

.

If n

ot

cou

ntin

g e

xistin

g c

on

ven

tiona

l h

ydro

fa

cili

tie

s a

s

qu

alif

ied

re

ne

wab

le r

eso

urc

es,

NR

EL

estim

ate

s t

ha

t a

bou

t 15

0G

Wof n

ew

rene

wa

ble

ene

rgy

ca

pa

city

will

be

need

ed

by

20

30

.

Page 7: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

7

U.S

. F

ed

era

l In

cen

tives f

or

Ren

ew

ab

le P

ow

er

•P

roductio

n t

ax c

redit (

PT

C)

of 2.1

cent/

kW

h for

win

d,

sola

r, g

eoth

erm

al, a

nd

“clo

sed-l

oo

p”

bio

-en

erg

y fa

cili

ties,

lasts

10 y

ears

once a

wa

rded

►T

ax-e

quity

str

uctu

res w

ere

fo

rme

d to t

ake a

dvanta

ge o

f th

e t

ax c

redit –

but

most

tax-

equity investo

rs a

re n

o longer

in t

he m

ark

et

to s

up

port

rene

wable

pro

jects

post th

e

2008 fin

ancia

l crisis

•A

merican R

ecovery

and R

ein

vestm

ent

Act

of

2009 (

“AR

RA

”) e

nhanced

develo

pers

’abili

ty t

o r

ece

ive t

ax

cre

dits v

ia a

n I

nvestm

ent

Tax

Cre

dit (

ITC

)and

by

allo

win

g c

om

panie

s t

o b

e d

irectly

reim

bu

rsed t

hro

ug

h g

rants

•T

his

polic

y m

ay

de

lay

som

e p

roje

ct

duri

ng t

ransitio

n p

eri

od w

hile

the p

roce

ss f

or

dis

burs

ing f

un

ds a

re s

till

bein

g w

ork

ed o

ut

•U

sin

g a

n I

TC

as a

fin

ancia

l in

centive m

ay

als

o lead t

o s

om

e c

ontr

acting issues

aro

un

d ince

ntive f

or

po

wer

pro

duction.

Page 8: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

8

Ren

ew

ab

le E

nerg

y C

red

its a

nd

Tra

din

g

•R

enew

able

Energ

y C

redits (

RE

Cs)

can c

ontr

ibute

sig

nific

antly

to t

he

overa

ll pro

fita

bili

ty o

f a

rene

wable

pro

ject.

►B

ut U

.S.

RE

C m

ark

ets

are

fra

gm

ente

d

and c

an b

e q

uite v

ola

tile

, w

ith R

EC

prices v

ary

ing d

ram

atically

acro

ss

regio

ns a

nd o

ver

tim

e.

►T

wo d

istinct segm

ents

: C

om

plia

nce

mark

ets

(sta

te R

PS

) and V

olu

nta

ry

(“gre

en p

ow

er”

) m

ark

ets

. V

olu

nta

ry

mark

ets

tend to h

ave low

er

prices, of

cours

e.

•T

he v

alu

e o

f R

EC

sin

com

plia

nce

mark

ets

can

depend g

rea

tly o

n t

he

short

-te

rm r

enew

able

s s

upply

(vs.

RP

S),

whic

h m

ay c

hange o

ver

tim

e

•R

enew

able

energ

y cost vs.

ma

rket

price for

“conventional”

pow

er

als

o

affects

long-t

erm

RE

C p

rices

Illu

str

ative E

xam

ple

s

So

urc

e:

Evo

lution

Ma

rke

ts

Reg

ion

/Pro

du

ct

Te

rmP

ric

eD

ate

20

07

$5

1.0

0

Apr-

08

20

08

$5

0.5

0

Nov-0

7

20

08

$2

5.0

0

Jul-

08

20

08

$2

0.0

0

May-

09

20

07

$5

5.0

0

Apr-

08

20

08

$5

4.0

0

Ma

r-0

8

20

08

$4

5.5

0

Jul-

08

20

08

$2

4.0

0

May-

09

20

09

$3

1.0

0

Ju

n-0

9

2nd h

alf

20

07

$5.2

5

Fe

b-0

8

20

08

$4.0

0

Jul-

08

20

08

$1.0

3

Ju

n-0

9

20

09

$1.3

5

Ju

n-0

9

New

Jers

ey (

So

lar)

20

07

/08

$2

65

.00

Jul-

08

New

Jers

ey C

lass

I2

009

$3.5

0

Ju

n-0

9

New

Jers

ey C

lass

I2

010

$1

1.0

0

Ju

n-0

9

Pe

nn

sylv

an

ia (

Tie

r I)

20

07

/08

$8.5

0

Ju

n-0

8

Co

nn

ecti

cu

t (C

lass

I)

Ma

ssa

ch

us

ett

s (

Cla

ss

I)

Te

xas

Page 9: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

9

Cu

rren

t W

ind

In

du

str

y T

ren

d

•C

on

so

lid

ati

on

. W

ind d

evelo

pers

have b

een c

onsolid

ating s

uch that th

e larg

est 3

ow

ners

ow

n a

bo

ut 60

% o

f U

.S.

win

d c

apacity

•L

on

g-t

erm

PP

A.

Most p

roje

cts

obta

in 1

0 to 2

0 y

ear

po

we

r pu

rcha

se c

ontr

acts

fr

om

utilit

ies

•A

nch

or

Te

nan

t M

od

el

for

Merc

han

t T

ran

sm

iss

ion

. F

ER

C h

as a

ppro

ved the

first

“anchor

tenant”

meth

od o

f ne

w t

ransm

issio

n d

evelo

pm

ent –

as a

n a

ltern

ative to

open s

eason for

merc

hant

transm

issio

n to r

esolv

e the “

chic

ken-a

nd-e

gg”

challe

nge

(Chin

ook P

ow

er

and Z

eph

yr

Po

wer

Tra

nsm

issio

n)

•R

eg

ula

tio

n a

nd

En

erg

y B

ala

nce

Need

to

Acc

om

pan

y L

arg

e W

ind

In

sta

lla

tio

ns.

M

ost R

TO

shave

recogniz

ed that

addin

g a

larg

e a

mount o

f w

ind o

nto

exis

ting

sys

tem

will

require a

dditio

nal energ

y bala

ncin

g r

esourc

es, in

clu

din

g a

dditio

nal

pro

vid

ers

of

regu

lation, lo

ad-f

ollo

win

g, fa

st

ram

pin

g c

apabili

ties

•E

nerg

y S

tora

ge

. A

dditio

nal sto

rage c

apabili

ties w

ould

be a

natu

ral “p

art

ne

r”fo

r w

ind r

esou

rces,

but m

ost

sto

rage

technolo

gie

s a

re e

xpensiv

e to d

evelo

p

Page 10: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

10

Dis

trib

ute

d g

en

era

tio

n:

genera

tion a

nd

consum

ptio

n a

t th

e c

usto

mer

sid

e

of

the m

ete

r.

•F

inancia

l In

cen

tives inclu

de R

PS

with s

ola

r carv

e-o

ut

an

d t

ax incentives

(federa

l in

vestm

ent

tax

cre

dit o

f 30%

, specia

l re

ne

wa

ble

cre

dits

for

dis

trib

ute

d g

en

era

tion,

an

d v

arious s

tate

tax

cre

dit ince

ntive

s).

•R

egu

lato

ry I

nfr

astr

uctu

re c

overing a

ccess t

o t

he g

rid (

inte

rconnection

sta

ndard

s),

net

mete

ring,

and r

ate

desig

n.

►42 S

tate

s h

ave e

sta

blis

hed r

ule

s o

f N

et

Me

tering t

hat allo

w o

wne

rs o

f sola

r sys

tem

s t

he s

ale

of e

xcess e

lectr

icity

back t

o t

he g

rid. T

hese p

rog

ram

s v

ary

w

idely

dependin

g o

n the

sta

te.

Wh

ole

sale

mark

et:

centr

al s

tation g

en

era

tion f

or

dis

trib

ution a

nd s

ale

to

utilit

ies.

•D

riven b

y R

PS

, part

of

utilit

ies’supply

port

folio

•U

tilit

ies in C

alif

orn

ia a

nd N

eva

da h

ave b

een s

ignin

g larg

e s

ola

rpo

we

r contr

acts

–but

sola

r pro

jects

face s

imila

r cha

llen

ges a

s w

ind

Reg

ula

tory

Dri

vers

fo

r S

ola

r P

V a

nd

So

lar

Th

erm

al In

vestm

en

ts

Page 11: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

11

“S

ola

r C

arv

e-O

ut”

Pro

vid

ing

Op

po

rtu

nit

ies in

So

me S

tate

s

Cert

ain

sta

tes h

ave

set

cert

ain

re

gu

lato

ry e

mp

has

is o

n s

ola

r e

nerg

y i

nve

stm

en

t.

TB

DT

BD

0.5

% b

y 2

025

12

.5 b

y 2

025

Oh

io

11

% b

y 2

022

5,8

80

MW

by

201

5

8%

by

20

20

12

.5%

by

202

1 (

Inve

sto

r o

wn

ed

util

itie

s)

10

% b

y 2

018

(P

ublic

ow

ne

d u

tiliti

es)

20

% b

y 2

020

(In

vesto

r o

wn

ed

utilit

ies)

10

% b

y 2

020

(co

-ops)

22

.5%

by

202

1

23

.8%

by

202

5

20

% b

y 2

015

9.5

% b

y 2

022

20

% b

y 2

019

20

% b

y 2

020

(In

vesto

r o

wn

ed

utilit

ies)

10

% b

y 2

020

(P

ublic

ow

ne

d u

tiliti

es)

15

% b

y 2

025

To

tal

RP

S R

eq

uir

em

en

t

6,7

00

55

0T

ota

l

1,6

00

11

04

.5%

dis

trib

ute

d g

en

era

tion

, no

t sp

eci

fica

lly s

ola

rA

rizo

na

0.3

86

% b

y 20

21

1.1

x m

ultip

lier

for

sola

r b

y 20

09

2x

mu

ltip

lier

for

no

n-w

ind

0.5

% P

V b

y 2

02

0

0.2

% b

y 2

018

4%

by

20

20

2.1

2%

by

202

1

0.3

% b

y 2

014

1%

by

20

15

2.4

x m

ultip

lier

for

cen

tra

l PV

2.4

5x

mu

ltip

lier

for

dis

trib

ute

d P

V

2%

by

20

22

2%

PV

by

20

19

3x

mu

ltip

lier

for

PV

insta

lled

be

fore

20

15

0.8

% b

y 2

02

01

.25

x m

ulti

plie

r fo

r in

-sta

te3

x fo

r so

lar

up

to

pro

jects

on

lin

e b

y 20

15

So

lar

Re

qu

ire

me

nt

/ G

oa

l

0.5

NA

25564

21

0

476

14

0.529

20

10 (

MW

)

54

NA

69

0

28

0

42

0

1,6

00

35

18

0

1,5

00

19

0

16

0

20

25 (

MW

)

Wa

sh

ing

ton

D.C

.

Te

xas

Pe

nn

sylv

an

ia

No

rth

Ca

roli

na

New

Me

xic

o

New

Je

rse

y

New

Ham

ps

hir

e

Ne

va

da

Ma

ryla

nd

De

law

are

Co

lora

do

Sta

te

Estim

ate

s f

rom

Rya

n W

ise

r and

Ga

len

Ba

rbo

se,

Re

ne

wa

ble

Po

rtfo

lio S

tan

da

rds in U

.S.:

A S

tatu

s R

epo

rt w

ith D

ata

th

roug

h 2

00

7, L

aw

ren

ce B

erk

ele

y

Na

tio

na

l La

b, A

pril 2

00

8, sup

ple

me

nte

d w

ith

up

da

ted

info

rmatio

n g

ath

ere

d f

rom

Bra

ttle

.

Page 12: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

12

Re

ne

wa

ble

En

erg

y M

ark

et

in N

ew

En

gla

nd

Page 13: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

13

Dem

an

d f

or

Ren

ew

ab

le E

nerg

y in

New

En

gla

nd

•F

ive o

f th

e s

ix N

ew

Engla

nd s

tate

s

have m

andate

s t

o s

erv

e a

po

rtio

n o

f re

tail

sale

s w

ith r

enew

able

genera

tion*

•C

lass 1

(“n

ew

”) r

enew

able

re

quirem

ent

will

drive r

ene

wable

develo

pm

ent

•B

ecause o

f th

e o

verlaps in s

tate

polic

ies, th

e m

ark

et fo

r R

EC

sbehaves m

ore

or

less lik

e a

sin

gle

N

ew

Engla

nd m

ark

et

•O

ve

rall

dem

and f

or

RE

Cs

is

expecte

d t

o q

uad

ruple

betw

een 2

008

and 2

020

So

urc

e:

20

08 C

EL

T R

epo

rt F

ore

cast

fo

r “B

ase

Cas

e”

Gro

wth

rat

e fo

r yea

rs b

eyo

nd

20

17 i

s b

ased

on C

EL

T R

epo

rt’s

av

erag

e gro

wth

rat

es

No

tes:

Dem

and

acco

unts

fo

r es

tim

ated

red

uct

ions

fro

m R

efe

ren

ce D

SM

fo

reca

st

Mas

sachu

sett

s d

em

and

in

corp

ora

tes

the

incr

eas

ed C

lass

1 R

PS

req

uir

em

ent

fro

m t

he

20

08

Gre

en C

om

mu

nit

ies

Act

*V

erm

ont

has

a v

olu

nta

ry r

en

ew

able

po

rtfo

lio

go

al

New

En

gla

nd

’s D

ema

nd

fo

r C

lass

1 R

enew

ab

le E

ner

gy

CT

ME

MA

NH

RI

VT

-

5,0

00

10

,00

0

15

,00

0

20

,00

0

25

,00

0

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

Annual Renewable Demand (GWh)

Page 14: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

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ged

an

d C

on

fiden

tia

l

14

Exis

tin

g a

nd

Pro

po

sed

Ren

ew

ab

le R

eso

urc

es i

n

New

En

gla

nd

•B

iom

ass d

om

inate

s in e

xistin

g r

esourc

es (

~500M

W)

►E

xis

ting b

iom

ass that

have q

ualif

ied o

r in

the p

rocess o

f qualif

ying a

s C

lass 1

in

Connecticut, M

assachusetts o

r M

ain

e’s

are

inclu

ded a

s “

exis

ting b

iom

ass r

esourc

es”

belo

w

•Q

ualif

ied im

port

s f

rom

NY

and Q

uebec a

re m

ostly

win

d r

eso

urc

es (

>300 M

W)

•T

here

are

sig

nific

ant

num

ber

of

pro

pose

d n

ew

re

ne

wa

ble

pro

jects

(>

3,5

00 M

W)

•N

ot

all

of

the p

ropose

d p

roje

cts

will

be b

uilt

•E

very

pro

ject

faces r

isks a

ssocia

ted w

ith:

►O

bta

inin

g e

nvironm

enta

l and r

eg

ula

tory

pe

rmits

►In

terc

onnection a

gre

em

en

ts, costs

associa

ted w

ith a

ny

transm

issio

n infr

astr

uctu

re

needed to s

uppo

rt r

enew

able

ene

rgy d

evelo

pm

ent

►F

inancin

g for

ren

ew

able

energ

y h

as b

ecom

e incre

asin

gly

difficult, p

art

icula

rly

giv

en t

he

2008 e

conom

ic d

ow

ntu

rn

►“N

IMB

Y”

Page 15: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

ged

an

d C

on

fiden

tia

l

15

Ren

ew

ab

le P

ote

nti

al in

New

En

gla

nd

•T

echnic

al pote

ntial show

s that

New

Engla

nd h

as a

n a

bundance o

f re

sourc

es

•If d

evelo

ped,

the r

ene

wable

pote

ntial fa

r e

xceeds r

egio

nal R

PS

requirem

ent

•M

ost abundant

resourc

e is w

ind

►W

ind is g

reate

st

in M

ain

e, N

ew

Ham

pshire a

nd V

erm

ont, a

nd o

ff-s

hore

►A

dditio

nal w

ind is a

vaila

ble

in N

ew

York

and E

aste

rn C

anadia

n P

rovi

nces

New

En

gla

nd

Ren

ewab

le R

esou

rce

Tec

hn

ical

Pote

nti

al

(Na

mep

late

MW

Cap

aci

ty, ex

cep

t fo

r sm

all

hyd

ro)

* H

yd

ro, la

nd

fill

and

fu

el c

ell

po

tenti

al l

evel

s ar

e se

t at

th

e am

ount

of

exis

ting s

up

ply

plu

s p

ropo

sed

pro

ject

s

Sou

rces

: O

n-s

hore

Win

d:

Rep

ort

Of

Th

e G

ov

ern

or’

s T

ask F

orc

e O

n W

ind

Po

wer

Dev

elop

men

t: F

ind

ing C

om

mon

Gro

und

For

A C

om

mon

Pu

rpose

, F

inal

Rep

ort

," S

tate

of

Mai

ne,

Feb

ruar

y 2

008

Off

-sh

ore

Win

d:

"Ren

ewab

le E

ner

gy R

esou

rces

in

New

En

gla

nd…

Wil

l T

hey

be

Th

ere

Wh

en W

e N

eed

Th

em?,

" B

ob

Gra

ce, P

rese

nte

d t

oN

ort

hea

st E

ner

gy a

nd C

om

mer

ce A

ssoci

atio

n;

15th

Ann

ual

New

En

gla

nd

En

ergy C

on

fere

nce

, M

ay 1

4, 20

08

. B

ased

on N

RE

L d

ata

Bio

mas

s/b

iofu

el:

"S

ecu

rin

g A

Pla

ce F

or

Bio

mas

s In

Th

e N

ort

hea

st U

nit

ed S

tate

s:A

Rev

iew

Of

Ren

ewab

le E

ner

gy A

nd

Rel

ated

Poli

cies

," X

ener

gy,

Mar

ch 3

1, 20

03

Note

: T

he

level

of

supp

ly d

oes

not

yet

sp

ecif

ical

ly c

on

sid

er h

igh

er c

ost

res

ou

rces

are

more

un

lik

ely t

o b

e n

eed

ed/b

uil

t.

Sta

teC

TM

AM

EN

HR

IV

TT

ota

l N

E

Landfi

ll G

as*

52

18

32

30

10

115

Win

d25

90

15,3

20

1,2

24

01

,947

9,4

17

Off

shore

Win

d0

6,5

66

1,2

11

0431

08,2

08

Hydro

*3

89

422

532

163

Bio

mas

s/B

iofu

els

235

29

844

6328

35

182

1,5

23

Fu

el C

ell

s*1

53

00

00

0153

Tota

l4

68

7,7

91

7,0

73

1,5

75

501

2,1

71

19,5

79

Page 16: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

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an

d C

on

fiden

tia

l

16

Su

pp

ly a

nd

Dem

an

d B

ala

nc

e i

n P

lan

nin

g H

ori

zo

n is

Un

cert

ain

•N

ew

Engla

nd c

ould

meet R

PS

requirem

ents

if deve

lopm

ent activi

ties c

ontinue to b

e a

ggre

ssiv

e

and h

urd

les c

an b

e r

educed

•S

upply

and d

em

and b

ala

nce s

how

s the im

pact of uncert

ain

ties a

round futu

re p

roje

ct

deve

lopm

ent

Note

: T

he

supp

ly l

evel

does

not

con

sid

er h

igh

er c

ost

res

ou

rces

are

more

unli

kel

y t

o b

e n

eed

ed/b

uil

t. Q

ual

ifie

d i

mp

ort

s ar

e in

clud

ed.

0

5,0

00

10

,00

0

15

,00

0

20

,00

0

25

,00

0

30

,00

0

35

,00

0

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Generation (GWh)

01,0

00

2,0

00

3,0

00

4,0

00

5,0

00

6,0

00

7,0

00

Capacity (MW)

New

En

gla

nd

Cla

ss I

Ren

ewa

ble

Res

ou

rce D

ema

nd

New

En

gla

nd

Cla

ss I

Ren

ewa

ble

Res

ou

rce

Su

pp

ly

Ba

sed

on

exis

tin

g a

nd

pro

po

sed

pro

ject

s

Ran

ge

of

sup

ply

unce

rtain

ty

Page 17: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

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an

d C

on

fiden

tia

l

17

Tra

ns

mis

sio

n,

a C

ha

lle

ng

efo

r R

en

ew

ab

le P

ow

er

De

ve

lop

me

nt

Page 18: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

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an

d C

on

fiden

tia

l

18

On

e o

f th

e B

igg

est

Ch

allen

ges is T

ran

sm

issio

n A

ccess

EH

V T

ran

sm

iss

ion

Ove

rlay

Sta

tus

Qu

o T

ran

sm

iss

ion

Ex

pa

ns

ion

Pro

ces

s

Sa

mp

le M

TE

P0

8 B

oa

rd A

pp

roved

Up

gra

des

Sa

mp

le M

TE

P0

8 B

oa

rd A

pp

roved

Up

gra

des

Gre

en

Po

wer

Exp

ress

Co

ncep

t

•B

rattle

recently

conducte

d a

stu

dy

of

Ext

ra-H

igh V

oltage (

EH

V)

ove

rlays

in the M

idw

est as a

means to

inte

rconnect a s

ignific

ant am

ount of re

mote

win

d r

esourc

es.

•W

e found thatE

HV

grid a

dditio

ns that in

cre

ase a

ccess to h

igher-

qualit

y w

ind r

esourc

es, alo

ng w

ith

exp

ecte

d c

arb

on p

rices, enable

renew

able

resourc

es to b

ecom

e c

ost-

com

petitive

with c

onve

ntional

pow

er

(exc

ludin

g tra

nsm

issio

n c

ost diffe

rences)

►O

ur

sim

ula

tion

s s

ho

w o

ver

20

,000

MW

of

win

d c

apa

city

ove

r an

d a

bo

ve c

urr

en

t R

PS

ma

nda

tes

will

be

bu

ilt

be

twe

en

2020

–2030

in t

he

Mid

we

st

if t

ran

smis

sio

n a

cce

ss is a

vaila

ble

.

►R

egio

na

l exp

an

sion

usi

ng a

ll th

is w

ind

wou

ld s

ave

app

roxi

ma

tely

6,6

00

mill

ion

MM

BT

Us

of

fue

l and

370

mill

ion

m

etr

ic to

ns o

f C

O2

thro

ugh

203

0.

►E

HV

add

itio

ns p

rovi

de

oth

er

sys

tem

be

nefits

, su

ch a

s g

rea

ter

relia

bili

ty,

div

ers

ity,

an

d m

ark

et

liquid

ity

–n

ot

qu

an

tifie

d in

th

is s

tud

y.

Page 19: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

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an

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on

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tia

l

19

Sam

ple

Pro

po

sals

fo

r “S

up

er

Gri

ds”

$4

.9 b

n2

,334

mile

s o

f 3

45

kV

th

rou

gho

ut

we

ste

rn T

exa

s t

o s

up

po

rt 1

8 G

W o

f in

sta

lled

win

d c

apa

city

Va

rio

us

Co

mp

etitive

Re

ne

wa

ble

En

erg

y Z

on

es (

CR

EZ

s)

$8

.0 b

n2

,250

mile

s o

f 7

65

/500

kV

th

rou

gh

ou

t S

PP

fo

otp

rin

t (A

K,

KS

, M

O,

NM

, O

K,

TX

) fo

r re

liab

ility

and

to

inco

rpo

rate

an

estim

ate

d 1

3.5

GW

of

insta

lled

win

d c

apa

city

SP

P R

TO

SP

P O

verl

ay

& X

Pla

n

$3

-7

bn

1,0

00

mile

s o

f A

C (

500

kV

) a

nd D

C lin

es th

roug

h B

ritish

Co

lum

bia

-WA

-O

R-C

A t

o s

upp

ort

3 G

W o

f re

ne

wa

ble

sA

vista

Co

rp,

Bri

tish

Co

lum

bia

T

ran

sm

issi

on

, P

aci

fiC

orp

, an

d

PG

&E

Ca

na

da

-No

rth

we

st-

Calif

orn

ia P

roje

ct

$5

.1 b

n1

,280

mile

s o

f lin

es

rate

d u

p t

o 5

00kV

to in

terc

on

ne

ct

ren

ew

ab

lere

sou

rces s

uch

as w

ind

an

d s

ola

r th

roug

hou

t W

Y-C

O-N

M-A

ZG

rou

p o

f 1

1 e

lectr

ic u

tilit

ies, sta

te

ag

encie

s, a

nd a

n in

de

pen

den

t tr

an

smis

sio

n c

om

pan

y

Hig

h P

lain

s E

xpre

ss*

$8

0 b

n

(20

24$

)C

on

cep

tua

l stu

dy: 1

5,0

00

mile

s o

f n

ew

EH

V th

roug

hou

t en

tire

Ea

ste

rn

Inte

rco

nn

ect

(excep

t F

lorid

a)

to s

up

po

rt 2

0%

na

tion

al R

PS

sta

nd

ard

Mid

we

st

ISO

, S

PP

, P

JM

, T

VA

, M

AP

P a

nd

se

vera

l key m

em

be

rs

of

SE

RC

Jo

int

Co

ord

ina

ted

Stu

dy P

lan

n/a

Tra

nsm

issi

on

to

su

pp

ort

15

GW

of

win

d in

IA

, IL

, M

N, W

I (P

ha

se I

) an

d

22

GW

of w

ind

fo

r a

ll M

idw

est IS

O (

Ph

ase

II)

Mid

we

st

ISO

Re

gio

na

l O

utle

t S

tud

y

Gro

up

of 1

1 tra

nsm

issio

n o

wn

ers

in

Up

pe

r M

idw

est

Na

tio

na

l G

rid

and

Ban

go

r H

ydro

AE

P a

nd

IT

C T

ran

sm

issio

n

ITC

Tra

nsm

issio

n

Sp

on

so

red

By

•Hig

h P

lain

s E

xpre

ss (

HP

X)

inclu

des o

ther

pro

jects

such

as:

the

Easte

rn P

lain

s T

ransm

issio

n P

roje

ct

(EP

TP

), t

he W

yom

ing-C

olo

rado

In

tert

ie (

WC

I),

the

Ne

w M

exi

co

Win

d C

olle

cto

r, a

nd

the

SunZ

ia S

outh

west

Tra

nsm

issio

n P

roje

ct.

•**

This

lis

t om

its s

om

e p

rop

osals

pu

rely

for

bre

vity

–no

rankin

g o

r opin

ion

att

aches t

o inclu

sio

n w

ithin

th

e s

et

of

lines s

how

n.

$1

.4 -

$1

.7 b

n7

10

mile

s o

f 34

5/2

30

kV

fro

m D

ako

tas th

roug

h M

N t

o W

I (G

rou

p 1

P

roje

cts

)C

ap

X 2

02

0

$2

bn

24

0 m

ile D

C lin

e f

rom

Ma

ine

to

ou

tsid

e B

osto

n,

MA

with

po

ssib

le

ext

en

sio

ns t

o C

an

ad

a to

su

ppo

rt w

ind

inte

gra

tion

No

rth

east

En

erg

y Lin

k

$2

.6 b

n7

00

mile

s o

f 76

5 k

V lo

op

to

link M

ich

igan

an

d O

hio

fo

r re

liabili

ty a

nd

re

ne

wa

ble

de

velo

pm

en

tM

ich

iga

n 7

65

kV

Backb

one

$1

0 -

$1

2 b

n3

,000

mile

s o

f 7

65

kV

fro

m D

ako

tas to

outs

ide

Chic

ag

o, IL

to s

upp

ort

w

ind

in

teg

ratio

nG

ree

n P

ow

er

Exp

ress

Co

st

Descri

pti

on

Pro

ject

Nam

e

Page 20: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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vile

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fiden

tia

l

20

Mark

et

Dyn

am

ics

Page 21: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

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an

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21

Sh

ort

-Term

RE

C P

rices C

an

Be V

ola

tile

•P

rem

ium

s a

bove

mark

et energ

y and c

apacity

prices w

ill b

e n

eeded to p

ay

for

hig

her-

cost re

new

able

re

sourc

es

•T

he R

EC

prices n

eeded to s

upport

each r

enew

able

technolo

gy

can r

ange fro

m $

0 to leve

ls c

lose to

the a

ltern

ative

com

plia

nce c

osts

of each r

egio

n –

RE

C p

ricin

g is local and n

o n

ational m

ark

et until new

le

gis

lation is p

assed

•In

additio

n to r

egula

tory

uncert

ain

ties, sig

nific

ant changes in c

arb

on, energ

y, c

apacity

costs

and

subsid

ies c

an s

ignifi

cantly

affect th

e R

EC

sm

ark

et

•T

he inte

rpla

y betw

een c

arb

on, energ

y and R

EC

mark

ets

will

have

sig

nific

ant im

plic

ations for

futu

re

RE

C p

rices

Sam

ple

Le

ve

lized

All-I

n C

os

ts f

or

New

Cap

acit

y(E

xclu

din

g F

irm

ing

, S

tora

ge,

an

d T

ran

sm

issio

n C

osts

)

$52

5

$0

$25

$50

$75

$10

0

$12

5

$15

0

$17

5

$47

5

$50

0$50

1.7

$14

5.3

$16

2.5

$98.3

$84.6

$87.5

$66.7

$82.4

$76.8

$72.8

$98.6

$71.2

$50.4

Bio

mass

CC

Adv.

CC

Conv.

Coal

CT

Adv.

CT

Conv.

Coal

Seq.

Nucle

ar

PV

Win

d(3

2%

c.f

.)W

ind

(42%

c.f

.)

2008$/MWh

CO

2 C

ost

Fuel C

osts

VO

M

FO

M

Capital C

osts

Tota

l w

ith

PT

C

Non-d

isp

atc

hable

-m

ay n

eed

additio

nal sto

rage

and

fir

min

g

Dis

patc

ha

ble

-no

fir

min

g r

equir

ed

Page 22: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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an

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22

Dep

ressed

En

erg

y P

rices a

re W

orr

yin

g In

vesto

rs o

f W

ind

an

d

Co

nven

tio

nal R

eso

urc

es

•T

exas,

whe

re a

dditio

ns o

f w

ind c

apacity

have o

uts

trip

ped t

ransm

issio

n a

dditio

ns,

show

s a

n e

xam

ple

of lo

caliz

ed p

rice d

epre

ssio

n.

•A

s s

how

n b

elo

w,

in 2

008,

when W

est T

exas incre

menta

l w

ind a

dditio

ns

surp

assed a

2,0

00 M

W t

hre

shold

, th

e im

plie

d h

eat ra

te h

ad d

ropped a

bout 30%

over

the

last

yea

r.W

est

ER

CO

T a

nd

ER

CO

T G

en

era

tor

Pri

ce

s

an

d C

um

ula

tive

ER

CO

T I

ns

talled

Win

d C

ap

acit

y b

y O

nli

ne

Date

0

1,0

00

2,0

00

3,0

00

4,0

00

5,0

00

6,0

00

Jan-06

Mar-06

May-06

Jul-06

Sep-06

Nov-06

Jan-07

Mar-07

May-07

Jul-07

Sep-07

Nov-07

Jan-08

Mar-08

May-08

Jul-08

Sep-08

Nov-08

Jan-09

Mar-09

West ERCOT New Wind Capacity (Cumulative MW)

0246810

12

Implied Heat Rate ERCOT and West ERCOT (MMBTU/MWh)

West E

RC

OT

Im

plie

d

Heat R

ate

(R

ight A

xis

)

Insta

lled W

ind C

apacity

in E

RC

OT

West Z

one*

(Left

Axis

)

*Only

inclu

des n

ew

win

d c

apacity

in E

RC

OT

West Z

one w

ith o

nlin

e d

ate

s b

etw

een 2

006 a

nd 2

009Y

TD

.

Sourc

e: G

enera

tor

prices f

rom

ER

CO

T. Insta

lled w

ind c

apacity

fro

m E

nerg

y V

elo

city

as o

f A

pr.

30, 2009.

ER

CO

T Im

plie

d H

eat

Rate

(R

ight A

xis

)

Page 23: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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23

Rate

Im

pact

Th

resh

old

fo

r R

PS

None e

xplic

itly

sta

ted

$20/M

Wh T

ier

1 n

on-s

ola

r ($

40/M

Wh in

201

1),

$1

5/M

Wh T

ier

2,

$45/M

Wh in

200

8 f

or

sola

r an

d d

eclin

ing b

y $5/M

Wh p

er

year

until $5/M

Wh fix

ed.

Com

plia

nce c

an b

e d

ela

yed if

RE

Cs

cost

is >

1%

of to

tal annu

al ele

ctr

icity

sale

s

reve

nu

es (

curr

ently

only

sola

r, b

ut

will

in

clu

de o

ther

rene

wable

s)

20%

by

202

2

Mary

lan

d

Altern

ative

com

plia

nce r

ate

dete

rmin

ed

by

com

mis

sio

n o

n a

case-b

y-case

basis

None

None

None

None

Alt

ern

ati

ve C

om

pli

an

ce P

aym

en

t

Am

ount

dete

rmin

ed b

y com

mis

sio

n o

n a

case-b

y-case b

asis

4%

of

ann

ual re

ven

ue r

equirem

ent

25%

by

202

5 f

or

Larg

e

Utilit

ies

5-1

0%

by

20

25 f

or

Sm

all

Utilit

ies

Ore

go

n

Not

passed o

nto

custo

mers

.

For

sola

r: $

450/M

Wh in

200

9,

$4

00/M

Wh

in 2

01

0 &

20

11;

decre

asin

g b

y $5

0/M

Wh

eve

ry t

wo y

ears

until 2024.

For

oth

er

ren

ew

able

s:

$45/M

Wh, adju

ste

d

ann

ually

by

CP

I

3%

of

nonre

ne

wable

port

folio

12.5

% b

y 2

02

5

(just

pass

ed in M

ay

200

8)

Oh

io

None e

xplic

itly

sta

ted

1%

of

nonre

ne

wable

port

folio

in 2

006,

incre

asin

g b

y 0.2

% p

er

year

up t

o 2

.0%

in

201

1 a

nd b

eyon

d

20%

by

202 f

or

IOU

s10%

by

202

0 f

or

Coo

ps

New

M

exic

o

$40/M

Wh if not

limite

d b

y ra

te im

pact

The lesser

of

a 0

.5%

incre

ment

on p

rior

year

rate

or

0.5

% c

um

ula

tive

rela

tive

to

base y

ear

(May

20

07)

2%

by

20

08

10%

by

201

525%

by

202

5(in-s

tate

resourc

es o

nly

befo

re 2

012)

Illi

no

is

Com

mis

sio

n m

ay

ass

ess

the v

alu

e o

f R

EC

snecess

ary

to h

ave

com

plie

d w

ith

RP

S a

nd im

pose a

n a

dm

inis

trative

fee

equ

al to

all

or

part

of

that

valu

e

2%

of

nonre

ne

wable

port

folio

20%

by

202

0 f

or

IOU

s

10%

by

202

0 f

or

PO

Us

Co

lora

do

Pen

alt

y f

or

no

t m

eeti

ng

RP

SC

ost

Cap

/ R

ate

Im

pact

Lim

itR

PS

Req

uir

em

en

tsS

tate

Som

e s

tate

s h

ave s

et

rate

im

pact th

reshold

s for

meeting R

PS

. T

ho

ugh N

ew

Engla

nd

sta

tes d

o n

ot have s

pecific

rate

im

pact th

reshold

s, ra

te p

aye

rs t

ole

rance m

ay b

e t

este

d

if c

osts

do n

ot de

cre

ase o

ver

tim

e.

Page 24: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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an

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tia

l

24

Su

mm

ary

of

Ch

allen

ges f

or

Ren

ew

ab

le D

evelo

pm

en

t

•F

inancin

g o

ptio

ns h

ave b

ecom

e m

ore

lim

ited.

•R

enew

able

cre

dit p

ricin

g is lo

cal and n

o n

ational m

ark

et until

new

legis

lation is p

assed

•R

ate

im

pact lim

itations/tole

rance in s

om

e s

tate

s a

re s

ignific

ant

•N

IMB

Y r

eactio

n is s

erious p

roble

m in w

ind a

nd s

ola

r in

cert

ain

are

as

•T

ransm

issio

n c

onstr

ain

ts c

ontinue to s

ignific

antly lim

it the

deliv

ery

of re

new

able

energ

y

•R

eduction o

f short

-term

energ

y p

rices c

ould

cre

ate

sig

nific

ant

concern

s for

exis

ting c

yclin

g a

nd b

aselo

ad

pla

nts

.

•In

tegra

tion c

ost associa

ted a

ccom

modating a

larg

e a

mount of

inte

rmitte

nt re

sourc

es is s

till

gre

atly u

ncert

ain

Page 25: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

vile

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an

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on

fiden

tia

l

25

Cu

rren

t B

ratt

leA

cti

vit

ies in

Ren

ew

ab

le E

nerg

y

•E

valu

ati

ng

th

e f

inan

cia

l ri

sks

for

develo

pers

under

unce

rtain

energ

y, r

en

ew

able

cre

dit a

nd

carb

on p

rices

•E

valu

ati

ng

bid

off

ers

from

supplie

rs

•E

sti

mati

ng

th

e i

ncre

men

tal

dem

an

d f

or

mo

re f

lexib

le g

en

era

tio

n

resourc

es a

nd t

he c

ost

of

those r

esourc

es w

hen inte

gra

ting larg

eam

ount

of

inte

rmitte

nt

rene

wa

ble

s

•E

valu

ati

ng

ec

on

om

ic d

evelo

pm

en

t im

pact

of

rene

wab

le e

nerg

y pro

jects

•E

valu

ati

ng

th

e i

mp

act

of

RP

S o

n r

eta

il t

ari

ff

•E

valu

ati

ng

th

e e

co

no

mic

ris

ks a

ssocia

ted

with v

ari

ous p

roje

ct

ow

ners

hip

and f

inancia

l str

uctu

res

•E

valu

ati

ng

th

e e

co

no

mic

ben

efi

ts o

f tr

an

sm

issio

n o

ptio

ns w

hen

inte

rcon

nectin

g r

ene

wa

ble

s

•E

sti

mati

ng

th

e b

en

efi

t o

f p

um

ped

sto

rag

e a

s inte

rmitte

nt

resourc

es

are

add

ed

Page 26: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

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on

fiden

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26

Th

e B

ratt

le G

rou

p –

Serv

ice

s t

o E

nerg

y C

om

pan

ies

•C

lim

ate

Ch

an

ge

Po

lic

y a

nd

P

lan

nin

g

•C

ost of C

apital

•D

em

and F

ore

casting a

nd W

eath

er

Norm

aliz

ation

•D

em

and R

esponse a

nd E

nerg

y

Effic

iency

•E

lectr

icit

y M

ark

et

Mo

de

lin

g

•E

nerg

y A

sse

t V

alu

ati

on

•E

nerg

y C

on

tract

Litig

ation

•E

nvironm

enta

l C

om

plia

nce

•F

uel and P

ow

er

Pro

cure

men

t

•In

centive R

egula

tion

•R

ate

Desig

n,

Co

st

All

oca

tio

n, a

nd

R

ate

Str

uctu

re

•R

eg

ula

tory

Str

ate

gy a

nd

Lit

igati

on

S

up

po

rt

•R

en

ew

ab

les

•R

esourc

e P

lannin

g

•R

eta

il A

ccess a

nd R

estr

uctu

ring

•R

isk M

anagem

ent

•M

ark

et-

Based R

ate

s

•M

ark

et

Desig

n a

nd

Co

mp

eti

tive

An

aly

sis

•M

erg

ers

and A

cq

uis

itio

ns

•T

ran

sm

issio

n

Page 27: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

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an

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fiden

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27

Con

tact

Judy

Chan

g–

En

ergy

Pra

ctic

e

at

jud

y.c

han

g@

bra

ttle

.com

44 B

ratt

le S

tree

t, C

am

bri

dge,

MA

02138

617-8

64-7

900

CA

MB

RID

GE

S

AN

FR

AN

CIS

CO

W

AS

HIN

GT

ON

B

RU

SS

EL

S

L

ON

DO

N

Th

e B

ratt

le G

roup p

rovid

es c

onsu

ltin

g a

nd e

xper

t te

stim

ony i

n e

conom

ics,

fin

ance

, an

d r

egula

tion t

o c

orp

ora

tio

ns,

law

fir

ms,

and

gover

nm

ents

aro

un

d t

he

worl

d.

We

com

bin

e in

-dep

th i

ndu

stry

exper

ience

, ri

goro

us

anal

yse

s, a

nd

pri

nci

ple

d t

echniq

ues

to h

elp c

lien

ts a

nsw

er c

om

ple

x e

con

om

ic a

nd

fin

anci

al q

ues

tion

s in

lit

igat

ion

and

reg

ula

tion,

dev

elop

str

ateg

ies

for

chan

gin

g m

arket

s, a

nd m

ake

crit

ical

bu

sines

s dec

isio

ns.

We

are

dis

tinguis

hed

by:

Th

oug

htf

ul,

tim

ely,

and

tra

nsp

aren

t an

alyse

s o

f in

du

stri

es a

nd

iss

ues

Aff

ilia

tio

ns

wit

h l

ead

ing

in

tern

atio

nal

aca

dem

ics

and

hig

hly

cre

den

tial

ed i

nd

ust

ry s

pec

iali

sts

Cle

arly

pre

sen

ted

res

ult

s th

at w

ith

stan

d c

riti

cal

revie

w

Page 28: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Copyri

ght ©

2008 T

he B

ratt

le G

roup,

Inc.

Anti

trust

/Co

mp

etit

ion

Co

mm

erci

al D

am

ages

En

vir

on

menta

l L

itig

atio

n a

nd

Reg

ula

tio

nF

ore

nsi

c E

cono

mic

sIn

tell

ect

ual

Pro

per

tyIn

tern

atio

nal

Arb

itra

tio

nIn

tern

atio

nal

Tra

de

Pro

duct

Lia

bil

ity

Reg

ula

tory

Fin

ance

and

Acco

unti

ng

Ris

k M

anag

em

ent

Secu

riti

esT

axU

tili

ty R

egula

tory

Po

licy

and

Rat

em

akin

gV

alu

atio

nE

lect

ric

Po

wer

Fin

anci

al I

nst

ituti

ons

Nat

ura

l G

asP

etro

leu

mP

har

mac

euti

cals

, M

edic

al D

evic

es,

and

Bio

tech

no

log

yT

elec

om

mu

nic

ati

ons

and

Med

iaT

ran

spo

rtat

ion

Up

da

te o

n R

en

ew

ab

le E

ne

rgy M

ark

et

Tre

nd

s

Pre

pare

d b

y:

Ju

dy C

han

g

Co

nfe

ren

ce o

n:

Fin

an

cin

g C

lean

En

erg

y P

roje

cts

un

der

the

Rein

vestm

en

t A

ct

of

2009

Th

urs

da

y,

Ju

ne 1

1, 2009

UM

ass C

lub

225 F

ranklin

Str

eet

Bosto

n

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an

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29

Ag

en

da

•O

verv

iew

of

ren

ew

ab

le e

nerg

y d

em

an

d a

nd

m

ark

et

dri

vers

•N

ew

En

gla

nd

’s d

em

an

d a

nd

su

pp

ly b

ala

nce

•T

ran

sm

iss

ion

, o

ne o

f th

e m

ost

sig

nif

ican

t ch

all

en

ges f

or

ren

ew

ab

le r

eso

urc

es

•O

ther

imp

ort

an

t m

ark

et

dyn

am

ics f

or

ren

ew

ab

le

en

erg

y

•T

he B

ratt

le G

rou

p’s

recen

t exp

eri

en

ce

Page 30: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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an

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on

fiden

tia

l

30

Main

Dri

vers

of

Ren

ew

ab

le E

nerg

y I

nvestm

en

ts

Po

liti

cal

•E

nerg

y security

& d

esire to d

ivers

ify

from

petr

ole

um

-based f

uels

•C

limate

change a

nd r

ene

wable

energ

y ta

rgets

•N

ational and s

tate

energ

y p

olic

ies

Eco

no

mic

•E

nerg

y p

rices, div

ers

ity o

f fu

els

, p

ote

ntial cost of carb

on e

mis

sio

ns

•F

edera

l and s

tate

fin

ancia

l subsid

ies for

rene

wable

pow

er

•T

ariffs,

cost

recovery

fo

r po

we

r p

urc

hase c

ontr

acts

, risk a

llocation

•P

roje

ct costs

inclu

din

g c

osts

of m

ate

rials

, financin

g, and labor

•G

reen c

ert

ific

ate

mark

ets

, R

PS

-dri

ven a

nd v

olu

nta

ry

Oth

ers

•F

inancia

l m

ark

et

(cre

dit c

runch)

•R

esourc

e a

vaila

bili

ty

•E

xchange r

ate

s

Page 31: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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31

Th

e R

en

ew

ab

le P

ort

folio

Sta

nd

ard

(R

PS

) M

ap

of

the U

.S.

Page 32: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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an

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on

fiden

tia

l

32

Ren

ew

ab

le R

eso

urc

e M

ap

s f

or

the U

.S.

Win

dS

ola

r

Bio

mass

Geo

therm

al

Page 33: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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33

Ad

dit

ion

al R

en

ew

ab

le C

ap

acit

y N

eed

ed

to

Meet

RP

S

Sourc

e:

Rya

n W

iser

and G

ale

n B

arb

ose,

La

wre

nce B

erk

ele

y N

ational La

b,

April 2008

La

wre

nce

Be

rke

ley

Nation

al Labo

rato

ry e

stim

ate

s

tha

t 60

GW

of

ne

w r

ene

wab

le e

ne

rgy

ca

pa

city

will

be

ne

eded

by

202

5.

Tha

t n

um

be

r in

cre

ase

s to

77

GW

by

2025

if inclu

din

g

lon

g-t

erm

go

als

fro

m v

ariou

s s

tate

s.

43

518

357

317

.4W

ax

ma

n

15

026

186

721

.8M

ark

ey

95

19

763

812

.1B

ing

am

an

N/A

20

869

9N

/AB

ase

Case

CO

2

Em

issio

ns

Red

ucti

on

in

2030

(millio

n

metr

ic

ton

s)

Qu

alify

ing

R

en

ew

ab

le

Cap

acit

y in

2030 (

GW

)

Qu

alify

ing

R

en

ew

ab

le

Gen

era

tio

n

in 2

030

(TW

h)

Peak

Eff

ecti

ve

RE

S (

%)

Case

As

su

mp

tio

n

Co

mp

ara

tive

Fin

din

gs

of

the

Pro

po

se

d R

ES

Le

gis

lati

on

Sourc

e:

Sulli

van,

Log

an,

Bird,

an

d S

hort

, “C

om

para

tive

Analy

sis

of

Thre

e P

ropose

d F

edera

l R

ene

wable

Ele

ctr

icity

Sta

ndard

s,

NR

EL,

May

20

09,

pag

e v

.

If n

ot

cou

ntin

g e

xistin

g c

on

ven

tiona

l h

ydro

fa

cili

tie

s a

s

qu

alif

ied

re

ne

wab

le r

eso

urc

es,

NR

EL

estim

ate

s t

ha

t a

bou

t 15

0G

Wof n

ew

rene

wa

ble

ene

rgy

ca

pa

city

will

be

need

ed

by

20

30

.

Page 34: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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34

U.S

. F

ed

era

l In

cen

tives f

or

Ren

ew

ab

le P

ow

er

•P

roductio

n t

ax c

redit (

PT

C)

of 2.1

cent/

kW

h for

win

d,

sola

r, g

eoth

erm

al, a

nd

“clo

sed-l

oo

p”

bio

-en

erg

y fa

cili

ties,

lasts

10 y

ears

once a

wa

rded

►T

ax-e

quity

str

uctu

res w

ere

fo

rme

d to t

ake a

dvanta

ge o

f th

e t

ax c

redit –

but

most

tax-

equity investo

rs a

re n

o longer

in t

he m

ark

et

to s

up

port

rene

wable

pro

jects

post th

e

2008 fin

ancia

l crisis

•A

merican R

ecovery

and R

ein

vestm

ent

Act

of

2009 (

“AR

RA

”) e

nhanced

develo

pers

’abili

ty t

o r

ece

ive t

ax

cre

dits v

ia a

n I

nvestm

ent

Tax

Cre

dit (

ITC

)and

by

allo

win

g c

om

panie

s t

o b

e d

irectly

reim

bu

rsed t

hro

ug

h g

rants

•T

his

polic

y m

ay

de

lay

som

e p

roje

ct

duri

ng t

ransitio

n p

eri

od w

hile

the p

roce

ss f

or

dis

burs

ing f

un

ds a

re s

till

bein

g w

ork

ed o

ut

•U

sin

g a

n I

TC

as a

fin

ancia

l in

centive m

ay

als

o lead t

o s

om

e c

ontr

acting issues

aro

un

d ince

ntive f

or

po

wer

pro

duction.

Page 35: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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35

Ren

ew

ab

le E

nerg

y C

red

its a

nd

Tra

din

g

•R

enew

able

Energ

y C

redits (

RE

Cs)

can c

ontr

ibute

sig

nific

antly

to t

he

overa

ll pro

fita

bili

ty o

f a

rene

wable

pro

ject.

►B

ut U

.S.

RE

C m

ark

ets

are

fra

gm

ente

d

and c

an b

e q

uite v

ola

tile

, w

ith R

EC

prices v

ary

ing d

ram

atically

acro

ss

regio

ns a

nd o

ver

tim

e.

►T

wo d

istinct segm

ents

: C

om

plia

nce

mark

ets

(sta

te R

PS

) and V

olu

nta

ry

(“gre

en p

ow

er”

) m

ark

ets

. V

olu

nta

ry

mark

ets

tend to h

ave low

er

prices, of

cours

e.

•T

he v

alu

e o

f R

EC

sin

com

plia

nce

mark

ets

can

depend g

rea

tly o

n t

he

short

-te

rm r

enew

able

s s

upply

(vs.

RP

S),

whic

h m

ay c

hange o

ver

tim

e

•R

enew

able

energ

y cost vs.

ma

rket

price for

“conventional”

pow

er

als

o

affects

long-t

erm

RE

C p

rices

Illu

str

ative E

xam

ple

s

So

urc

e:

Evo

lution

Ma

rke

ts

Reg

ion

/Pro

du

ct

Te

rmP

ric

eD

ate

20

07

$5

1.0

0

Apr-

08

20

08

$5

0.5

0

Nov-0

7

20

08

$2

5.0

0

Jul-

08

20

08

$2

0.0

0

May-

09

20

07

$5

5.0

0

Apr-

08

20

08

$5

4.0

0

Ma

r-0

8

20

08

$4

5.5

0

Jul-

08

20

08

$2

4.0

0

May-

09

20

09

$3

1.0

0

Ju

n-0

9

2nd h

alf

20

07

$5.2

5

Fe

b-0

8

20

08

$4.0

0

Jul-

08

20

08

$1.0

3

Ju

n-0

9

20

09

$1.3

5

Ju

n-0

9

New

Jers

ey (

So

lar)

20

07

/08

$2

65

.00

Jul-

08

New

Jers

ey C

lass

I2

009

$3.5

0

Ju

n-0

9

New

Jers

ey C

lass

I2

010

$1

1.0

0

Ju

n-0

9

Pe

nn

sylv

an

ia (

Tie

r I)

20

07

/08

$8.5

0

Ju

n-0

8

Co

nn

ecti

cu

t (C

lass

I)

Ma

ssa

ch

us

ett

s (

Cla

ss

I)

Te

xas

Page 36: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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36

Cu

rren

t W

ind

In

du

str

y T

ren

d

•C

on

so

lid

ati

on

. W

ind d

evelo

pers

have b

een c

onsolid

ating s

uch that th

e larg

est 3

ow

ners

ow

n a

bo

ut 60

% o

f U

.S.

win

d c

apacity

•L

on

g-t

erm

PP

A.

Most p

roje

cts

obta

in 1

0 to 2

0 y

ear

po

we

r pu

rcha

se c

ontr

acts

fr

om

utilit

ies

•A

nch

or

Te

nan

t M

od

el

for

Merc

han

t T

ran

sm

iss

ion

. F

ER

C h

as a

ppro

ved the

first

“anchor

tenant”

meth

od o

f ne

w t

ransm

issio

n d

evelo

pm

ent –

as a

n a

ltern

ative to

open s

eason for

merc

hant

transm

issio

n to r

esolv

e the “

chic

ken-a

nd-e

gg”

challe

nge

(Chin

ook P

ow

er

and Z

eph

yr

Po

wer

Tra

nsm

issio

n)

•R

eg

ula

tio

n a

nd

En

erg

y B

ala

nce

Need

to

Acc

om

pan

y L

arg

e W

ind

In

sta

lla

tio

ns.

M

ost R

TO

shave

recogniz

ed that

addin

g a

larg

e a

mount o

f w

ind o

nto

exis

ting

sys

tem

will

require a

dditio

nal energ

y bala

ncin

g r

esourc

es, in

clu

din

g a

dditio

nal

pro

vid

ers

of

regu

lation, lo

ad-f

ollo

win

g, fa

st

ram

pin

g c

apabili

ties

•E

nerg

y S

tora

ge

. A

dditio

nal sto

rage c

apabili

ties w

ould

be a

natu

ral “p

art

ne

r”fo

r w

ind r

esou

rces,

but m

ost

sto

rage

technolo

gie

s a

re e

xpensiv

e to d

evelo

p

Page 37: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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37

Dis

trib

ute

d g

en

era

tio

n:

genera

tion a

nd

consum

ptio

n a

t th

e c

usto

mer

sid

e

of

the m

ete

r.

•F

inancia

l In

cen

tives inclu

de R

PS

with s

ola

r carv

e-o

ut

an

d t

ax incentives

(federa

l in

vestm

ent

tax

cre

dit o

f 30%

, specia

l re

ne

wa

ble

cre

dits

for

dis

trib

ute

d g

en

era

tion,

an

d v

arious s

tate

tax

cre

dit ince

ntive

s).

•R

egu

lato

ry I

nfr

astr

uctu

re c

overing a

ccess t

o t

he g

rid (

inte

rconnection

sta

ndard

s),

net

mete

ring,

and r

ate

desig

n.

►42 S

tate

s h

ave e

sta

blis

hed r

ule

s o

f N

et

Me

tering t

hat allo

w o

wne

rs o

f sola

r sys

tem

s t

he s

ale

of e

xcess e

lectr

icity

back t

o t

he g

rid. T

hese p

rog

ram

s v

ary

w

idely

dependin

g o

n the

sta

te.

Wh

ole

sale

mark

et:

centr

al s

tation g

en

era

tion f

or

dis

trib

ution a

nd s

ale

to

utilit

ies.

•D

riven b

y R

PS

, part

of

utilit

ies’supply

port

folio

•U

tilit

ies in C

alif

orn

ia a

nd N

eva

da h

ave b

een s

ignin

g larg

e s

ola

rpo

we

r contr

acts

–but

sola

r pro

jects

face s

imila

r cha

llen

ges a

s w

ind

Reg

ula

tory

Dri

vers

fo

r S

ola

r P

V a

nd

So

lar

Th

erm

al In

vestm

en

ts

Page 38: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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38

“S

ola

r C

arv

e-O

ut”

Pro

vid

ing

Op

po

rtu

nit

ies in

So

me S

tate

s

Cert

ain

sta

tes h

ave

set

cert

ain

re

gu

lato

ry e

mp

has

is o

n s

ola

r e

nerg

y i

nve

stm

en

t.

TB

DT

BD

0.5

% b

y 2

025

12

.5 b

y 2

025

Oh

io

11

% b

y 2

022

5,8

80

MW

by

201

5

8%

by

20

20

12

.5%

by

202

1 (

Inve

sto

r o

wn

ed

util

itie

s)

10

% b

y 2

018

(P

ublic

ow

ne

d u

tiliti

es)

20

% b

y 2

020

(In

vesto

r o

wn

ed

utilit

ies)

10

% b

y 2

020

(co

-ops)

22

.5%

by

202

1

23

.8%

by

202

5

20

% b

y 2

015

9.5

% b

y 2

022

20

% b

y 2

019

20

% b

y 2

020

(In

vesto

r o

wn

ed

utilit

ies)

10

% b

y 2

020

(P

ublic

ow

ne

d u

tiliti

es)

15

% b

y 2

025

To

tal

RP

S R

eq

uir

em

en

t

6,7

00

55

0T

ota

l

1,6

00

11

04

.5%

dis

trib

ute

d g

en

era

tion

, no

t sp

eci

fica

lly s

ola

rA

rizo

na

0.3

86

% b

y 20

21

1.1

x m

ultip

lier

for

sola

r b

y 20

09

2x

mu

ltip

lier

for

no

n-w

ind

0.5

% P

V b

y 2

02

0

0.2

% b

y 2

018

4%

by

20

20

2.1

2%

by

202

1

0.3

% b

y 2

014

1%

by

20

15

2.4

x m

ultip

lier

for

cen

tra

l PV

2.4

5x

mu

ltip

lier

for

dis

trib

ute

d P

V

2%

by

20

22

2%

PV

by

20

19

3x

mu

ltip

lier

for

PV

insta

lled

be

fore

20

15

0.8

% b

y 2

02

01

.25

x m

ulti

plie

r fo

r in

-sta

te3

x fo

r so

lar

up

to

pro

jects

on

lin

e b

y 20

15

So

lar

Re

qu

ire

me

nt

/ G

oa

l

0.5

NA

25564

21

0

476

14

0.529

20

10 (

MW

)

54

NA

69

0

28

0

42

0

1,6

00

35

18

0

1,5

00

19

0

16

0

20

25 (

MW

)

Wa

sh

ing

ton

D.C

.

Te

xas

Pe

nn

sylv

an

ia

No

rth

Ca

roli

na

New

Me

xic

o

New

Je

rse

y

New

Ham

ps

hir

e

Ne

va

da

Ma

ryla

nd

De

law

are

Co

lora

do

Sta

te

Estim

ate

s f

rom

Rya

n W

ise

r and

Ga

len

Ba

rbo

se,

Re

ne

wa

ble

Po

rtfo

lio S

tan

da

rds in U

.S.:

A S

tatu

s R

epo

rt w

ith D

ata

th

roug

h 2

00

7, L

aw

ren

ce B

erk

ele

y

Na

tio

na

l La

b, A

pril 2

00

8, sup

ple

me

nte

d w

ith

up

da

ted

info

rmatio

n g

ath

ere

d f

rom

Bra

ttle

.

Page 39: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

Pri

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an

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on

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39

Re

ne

wa

ble

En

erg

y M

ark

et

in N

ew

En

gla

nd

Page 40: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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ged

an

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on

fiden

tia

l

40

Dem

an

d f

or

Ren

ew

ab

le E

nerg

y in

New

En

gla

nd

•F

ive o

f th

e s

ix N

ew

Engla

nd s

tate

s

have m

andate

s t

o s

erv

e a

po

rtio

n o

f re

tail

sale

s w

ith r

enew

able

genera

tion*

•C

lass 1

(“n

ew

”) r

enew

able

re

quirem

ent

will

drive r

ene

wable

develo

pm

ent

•B

ecause o

f th

e o

verlaps in s

tate

polic

ies, th

e m

ark

et fo

r R

EC

sbehaves m

ore

or

less lik

e a

sin

gle

N

ew

Engla

nd m

ark

et

•O

ve

rall

dem

and f

or

RE

Cs

is

expecte

d t

o q

uad

ruple

betw

een 2

008

and 2

020

So

urc

e:

20

08 C

EL

T R

epo

rt F

ore

cast

fo

r “B

ase

Cas

e”

Gro

wth

rat

e fo

r yea

rs b

eyo

nd

20

17 i

s b

ased

on C

EL

T R

epo

rt’s

av

erag

e gro

wth

rat

es

No

tes:

Dem

and

acco

unts

fo

r es

tim

ated

red

uct

ions

fro

m R

efe

ren

ce D

SM

fo

reca

st

Mas

sachu

sett

s d

em

and

in

corp

ora

tes

the

incr

eas

ed C

lass

1 R

PS

req

uir

em

ent

fro

m t

he

20

08

Gre

en C

om

mu

nit

ies

Act

*V

erm

ont

has

a v

olu

nta

ry r

en

ew

able

po

rtfo

lio

go

al

New

En

gla

nd

’s D

ema

nd

fo

r C

lass

1 R

enew

ab

le E

ner

gy

CT

ME

MA

NH

RI

VT

-

5,0

00

10

,00

0

15

,00

0

20

,00

0

25

,00

0

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

Annual Renewable Demand (GWh)

Page 41: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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an

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41

Exis

tin

g a

nd

Pro

po

sed

Ren

ew

ab

le R

eso

urc

es i

n

New

En

gla

nd

•B

iom

ass d

om

inate

s in e

xistin

g r

esourc

es (

~500M

W)

►E

xis

ting b

iom

ass that

have q

ualif

ied o

r in

the p

rocess o

f qualif

ying a

s C

lass 1

in

Connecticut, M

assachusetts o

r M

ain

e’s

are

inclu

ded a

s “

exis

ting b

iom

ass r

esourc

es”

belo

w

•Q

ualif

ied im

port

s f

rom

NY

and Q

uebec a

re m

ostly

win

d r

eso

urc

es (

>300 M

W)

•T

here

are

sig

nific

ant

num

ber

of

pro

pose

d n

ew

re

ne

wa

ble

pro

jects

(>

3,5

00 M

W)

•N

ot

all

of

the p

ropose

d p

roje

cts

will

be b

uilt

•E

very

pro

ject

faces r

isks a

ssocia

ted w

ith:

►O

bta

inin

g e

nvironm

enta

l and r

eg

ula

tory

pe

rmits

►In

terc

onnection a

gre

em

en

ts, costs

associa

ted w

ith a

ny

transm

issio

n infr

astr

uctu

re

needed to s

uppo

rt r

enew

able

ene

rgy d

evelo

pm

ent

►F

inancin

g for

ren

ew

able

energ

y h

as b

ecom

e incre

asin

gly

difficult, p

art

icula

rly

giv

en t

he

2008 e

conom

ic d

ow

ntu

rn

►“N

IMB

Y”

Page 42: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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an

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on

fiden

tia

l

42

Ren

ew

ab

le P

ote

nti

al in

New

En

gla

nd

•T

echnic

al pote

ntial show

s that

New

Engla

nd h

as a

n a

bundance o

f re

sourc

es

•If d

evelo

ped,

the r

ene

wable

pote

ntial fa

r e

xceeds r

egio

nal R

PS

requirem

ent

•M

ost abundant

resourc

e is w

ind

►W

ind is g

reate

st

in M

ain

e, N

ew

Ham

pshire a

nd V

erm

ont, a

nd o

ff-s

hore

►A

dditio

nal w

ind is a

vaila

ble

in N

ew

York

and E

aste

rn C

anadia

n P

rovi

nces

New

En

gla

nd

Ren

ewab

le R

esou

rce

Tec

hn

ical

Pote

nti

al

(Na

mep

late

MW

Cap

aci

ty, ex

cep

t fo

r sm

all

hyd

ro)

* H

yd

ro, la

nd

fill

and

fu

el c

ell

po

tenti

al l

evel

s ar

e se

t at

th

e am

ount

of

exis

ting s

up

ply

plu

s p

ropo

sed

pro

ject

s

Sou

rces

: O

n-s

hore

Win

d:

Rep

ort

Of

Th

e G

ov

ern

or’

s T

ask F

orc

e O

n W

ind

Po

wer

Dev

elop

men

t: F

ind

ing C

om

mon

Gro

und

For

A C

om

mon

Pu

rpose

, F

inal

Rep

ort

," S

tate

of

Mai

ne,

Feb

ruar

y 2

008

Off

-sh

ore

Win

d:

"Ren

ewab

le E

ner

gy R

esou

rces

in

New

En

gla

nd…

Wil

l T

hey

be

Th

ere

Wh

en W

e N

eed

Th

em?,

" B

ob

Gra

ce, P

rese

nte

d t

oN

ort

hea

st E

ner

gy a

nd C

om

mer

ce A

ssoci

atio

n;

15th

Ann

ual

New

En

gla

nd

En

ergy C

on

fere

nce

, M

ay 1

4, 20

08

. B

ased

on N

RE

L d

ata

Bio

mas

s/b

iofu

el:

"S

ecu

rin

g A

Pla

ce F

or

Bio

mas

s In

Th

e N

ort

hea

st U

nit

ed S

tate

s:A

Rev

iew

Of

Ren

ewab

le E

ner

gy A

nd

Rel

ated

Poli

cies

," X

ener

gy,

Mar

ch 3

1, 20

03

Note

: T

he

level

of

supp

ly d

oes

not

yet

sp

ecif

ical

ly c

on

sid

er h

igh

er c

ost

res

ou

rces

are

more

un

lik

ely t

o b

e n

eed

ed/b

uil

t.

Sta

teC

TM

AM

EN

HR

IV

TT

ota

l N

E

Landfi

ll G

as*

52

18

32

30

10

115

Win

d25

90

15,3

20

1,2

24

01

,947

9,4

17

Off

shore

Win

d0

6,5

66

1,2

11

0431

08,2

08

Hydro

*3

89

422

532

163

Bio

mas

s/B

iofu

els

235

29

844

6328

35

182

1,5

23

Fu

el C

ell

s*1

53

00

00

0153

Tota

l4

68

7,7

91

7,0

73

1,5

75

501

2,1

71

19,5

79

Page 43: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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43

Su

pp

ly a

nd

Dem

an

d B

ala

nc

e i

n P

lan

nin

g H

ori

zo

n is

Un

cert

ain

•N

ew

Engla

nd c

ould

meet R

PS

requirem

ents

if deve

lopm

ent activi

ties c

ontinue to b

e a

ggre

ssiv

e

and h

urd

les c

an b

e r

educed

•S

upply

and d

em

and b

ala

nce s

how

s the im

pact of uncert

ain

ties a

round futu

re p

roje

ct

deve

lopm

ent

Note

: T

he

supp

ly l

evel

does

not

con

sid

er h

igh

er c

ost

res

ou

rces

are

more

unli

kel

y t

o b

e n

eed

ed/b

uil

t. Q

ual

ifie

d i

mp

ort

s ar

e in

clud

ed.

0

5,0

00

10

,00

0

15

,00

0

20

,00

0

25

,00

0

30

,00

0

35

,00

0

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Generation (GWh)

01,0

00

2,0

00

3,0

00

4,0

00

5,0

00

6,0

00

7,0

00

Capacity (MW)

New

En

gla

nd

Cla

ss I

Ren

ewa

ble

Res

ou

rce D

ema

nd

New

En

gla

nd

Cla

ss I

Ren

ewa

ble

Res

ou

rce

Su

pp

ly

Ba

sed

on

exis

tin

g a

nd

pro

po

sed

pro

ject

s

Ran

ge

of

sup

ply

unce

rtain

ty

Page 44: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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on

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44

Tra

ns

mis

sio

n,

a C

ha

lle

ng

efo

r R

en

ew

ab

le P

ow

er

De

ve

lop

me

nt

Page 45: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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45

On

e o

f th

e B

igg

est

Ch

allen

ges is T

ran

sm

issio

n A

ccess

EH

V T

ran

sm

iss

ion

Ove

rlay

Sta

tus

Qu

o T

ran

sm

iss

ion

Ex

pa

ns

ion

Pro

ces

s

Sa

mp

le M

TE

P0

8 B

oa

rd A

pp

roved

Up

gra

des

Sa

mp

le M

TE

P0

8 B

oa

rd A

pp

roved

Up

gra

des

Gre

en

Po

wer

Exp

ress

Co

ncep

t

•B

rattle

recently

conducte

d a

stu

dy

of

Ext

ra-H

igh V

oltage (

EH

V)

ove

rlays

in the M

idw

est as a

means to

inte

rconnect a s

ignific

ant am

ount of re

mote

win

d r

esourc

es.

•W

e found thatE

HV

grid a

dditio

ns that in

cre

ase a

ccess to h

igher-

qualit

y w

ind r

esourc

es, alo

ng w

ith

exp

ecte

d c

arb

on p

rices, enable

renew

able

resourc

es to b

ecom

e c

ost-

com

petitive

with c

onve

ntional

pow

er

(exc

ludin

g tra

nsm

issio

n c

ost diffe

rences)

►O

ur

sim

ula

tion

s s

ho

w o

ver

20

,000

MW

of

win

d c

apa

city

ove

r an

d a

bo

ve c

urr

en

t R

PS

ma

nda

tes

will

be

bu

ilt

be

twe

en

2020

–2030

in t

he

Mid

we

st

if t

ran

smis

sio

n a

cce

ss is a

vaila

ble

.

►R

egio

na

l exp

an

sion

usi

ng a

ll th

is w

ind

wou

ld s

ave

app

roxi

ma

tely

6,6

00

mill

ion

MM

BT

Us

of

fue

l and

370

mill

ion

m

etr

ic to

ns o

f C

O2

thro

ugh

203

0.

►E

HV

add

itio

ns p

rovi

de

oth

er

sys

tem

be

nefits

, su

ch a

s g

rea

ter

relia

bili

ty,

div

ers

ity,

an

d m

ark

et

liquid

ity

–n

ot

qu

an

tifie

d in

th

is s

tud

y.

Page 46: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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46

Sam

ple

Pro

po

sals

fo

r “S

up

er

Gri

ds”

$4

.9 b

n2

,334

mile

s o

f 3

45

kV

th

rou

gho

ut

we

ste

rn T

exa

s t

o s

up

po

rt 1

8 G

W o

f in

sta

lled

win

d c

apa

city

Va

rio

us

Co

mp

etitive

Re

ne

wa

ble

En

erg

y Z

on

es (

CR

EZ

s)

$8

.0 b

n2

,250

mile

s o

f 7

65

/500

kV

th

rou

gh

ou

t S

PP

fo

otp

rin

t (A

K,

KS

, M

O,

NM

, O

K,

TX

) fo

r re

liab

ility

and

to

inco

rpo

rate

an

estim

ate

d 1

3.5

GW

of

insta

lled

win

d c

apa

city

SP

P R

TO

SP

P O

verl

ay

& X

Pla

n

$3

-7

bn

1,0

00

mile

s o

f A

C (

500

kV

) a

nd D

C lin

es th

roug

h B

ritish

Co

lum

bia

-WA

-O

R-C

A t

o s

upp

ort

3 G

W o

f re

ne

wa

ble

sA

vista

Co

rp,

Bri

tish

Co

lum

bia

T

ran

sm

issi

on

, P

aci

fiC

orp

, an

d

PG

&E

Ca

na

da

-No

rth

we

st-

Calif

orn

ia P

roje

ct

$5

.1 b

n1

,280

mile

s o

f lin

es

rate

d u

p t

o 5

00kV

to in

terc

on

ne

ct

ren

ew

ab

lere

sou

rces s

uch

as w

ind

an

d s

ola

r th

roug

hou

t W

Y-C

O-N

M-A

ZG

rou

p o

f 1

1 e

lectr

ic u

tilit

ies, sta

te

ag

encie

s, a

nd a

n in

de

pen

den

t tr

an

smis

sio

n c

om

pan

y

Hig

h P

lain

s E

xpre

ss*

$8

0 b

n

(20

24$

)C

on

cep

tua

l stu

dy: 1

5,0

00

mile

s o

f n

ew

EH

V th

roug

hou

t en

tire

Ea

ste

rn

Inte

rco

nn

ect

(excep

t F

lorid

a)

to s

up

po

rt 2

0%

na

tion

al R

PS

sta

nd

ard

Mid

we

st

ISO

, S

PP

, P

JM

, T

VA

, M

AP

P a

nd

se

vera

l key m

em

be

rs

of

SE

RC

Jo

int

Co

ord

ina

ted

Stu

dy P

lan

n/a

Tra

nsm

issi

on

to

su

pp

ort

15

GW

of

win

d in

IA

, IL

, M

N, W

I (P

ha

se I

) an

d

22

GW

of w

ind

fo

r a

ll M

idw

est IS

O (

Ph

ase

II)

Mid

we

st

ISO

Re

gio

na

l O

utle

t S

tud

y

Gro

up

of 1

1 tra

nsm

issio

n o

wn

ers

in

Up

pe

r M

idw

est

Na

tio

na

l G

rid

and

Ban

go

r H

ydro

AE

P a

nd

IT

C T

ran

sm

issio

n

ITC

Tra

nsm

issio

n

Sp

on

so

red

By

•Hig

h P

lain

s E

xpre

ss (

HP

X)

inclu

des o

ther

pro

jects

such

as:

the

Easte

rn P

lain

s T

ransm

issio

n P

roje

ct

(EP

TP

), t

he W

yom

ing-C

olo

rado

In

tert

ie (

WC

I),

the

Ne

w M

exi

co

Win

d C

olle

cto

r, a

nd

the

SunZ

ia S

outh

west

Tra

nsm

issio

n P

roje

ct.

•**

This

lis

t om

its s

om

e p

rop

osals

pu

rely

for

bre

vity

–no

rankin

g o

r opin

ion

att

aches t

o inclu

sio

n w

ithin

th

e s

et

of

lines s

how

n.

$1

.4 -

$1

.7 b

n7

10

mile

s o

f 34

5/2

30

kV

fro

m D

ako

tas th

roug

h M

N t

o W

I (G

rou

p 1

P

roje

cts

)C

ap

X 2

02

0

$2

bn

24

0 m

ile D

C lin

e f

rom

Ma

ine

to

ou

tsid

e B

osto

n,

MA

with

po

ssib

le

ext

en

sio

ns t

o C

an

ad

a to

su

ppo

rt w

ind

inte

gra

tion

No

rth

east

En

erg

y Lin

k

$2

.6 b

n7

00

mile

s o

f 76

5 k

V lo

op

to

link M

ich

igan

an

d O

hio

fo

r re

liabili

ty a

nd

re

ne

wa

ble

de

velo

pm

en

tM

ich

iga

n 7

65

kV

Backb

one

$1

0 -

$1

2 b

n3

,000

mile

s o

f 7

65

kV

fro

m D

ako

tas to

outs

ide

Chic

ag

o, IL

to s

upp

ort

w

ind

in

teg

ratio

nG

ree

n P

ow

er

Exp

ress

Co

st

Descri

pti

on

Pro

ject

Nam

e

Page 47: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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Mark

et

Dyn

am

ics

Page 48: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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48

Sh

ort

-Term

RE

C P

rices C

an

Be V

ola

tile

•P

rem

ium

s a

bove

mark

et energ

y and c

apacity

prices w

ill b

e n

eeded to p

ay

for

hig

her-

cost re

new

able

re

sourc

es

•T

he R

EC

prices n

eeded to s

upport

each r

enew

able

technolo

gy

can r

ange fro

m $

0 to leve

ls c

lose to

the a

ltern

ative

com

plia

nce c

osts

of each r

egio

n –

RE

C p

ricin

g is local and n

o n

ational m

ark

et until new

le

gis

lation is p

assed

•In

additio

n to r

egula

tory

uncert

ain

ties, sig

nific

ant changes in c

arb

on, energ

y, c

apacity

costs

and

subsid

ies c

an s

ignifi

cantly

affect th

e R

EC

sm

ark

et

•T

he inte

rpla

y betw

een c

arb

on, energ

y and R

EC

mark

ets

will

have

sig

nific

ant im

plic

ations for

futu

re

RE

C p

rices

Sam

ple

Le

ve

lized

All-I

n C

os

ts f

or

New

Cap

acit

y(E

xclu

din

g F

irm

ing

, S

tora

ge,

an

d T

ran

sm

issio

n C

osts

)

$52

5

$0

$25

$50

$75

$10

0

$12

5

$15

0

$17

5

$47

5

$50

0$50

1.7

$14

5.3

$16

2.5

$98.3

$84.6

$87.5

$66.7

$82.4

$76.8

$72.8

$98.6

$71.2

$50.4

Bio

mass

CC

Adv.

CC

Conv.

Coal

CT

Adv.

CT

Conv.

Coal

Seq.

Nucle

ar

PV

Win

d(3

2%

c.f

.)W

ind

(42%

c.f

.)

2008$/MWh

CO

2 C

ost

Fuel C

osts

VO

M

FO

M

Capital C

osts

Tota

l w

ith

PT

C

Non-d

isp

atc

hable

-m

ay n

eed

additio

nal sto

rage

and

fir

min

g

Dis

patc

ha

ble

-no

fir

min

g r

equir

ed

Page 49: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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Dep

ressed

En

erg

y P

rices a

re W

orr

yin

g In

vesto

rs o

f W

ind

an

d

Co

nven

tio

nal R

eso

urc

es

•T

exas,

whe

re a

dditio

ns o

f w

ind c

apacity

have o

uts

trip

ped t

ransm

issio

n a

dditio

ns,

show

s a

n e

xam

ple

of lo

caliz

ed p

rice d

epre

ssio

n.

•A

s s

how

n b

elo

w,

in 2

008,

when W

est T

exas incre

menta

l w

ind a

dditio

ns

surp

assed a

2,0

00 M

W t

hre

shold

, th

e im

plie

d h

eat ra

te h

ad d

ropped a

bout 30%

over

the

last

yea

r.W

est

ER

CO

T a

nd

ER

CO

T G

en

era

tor

Pri

ce

s

an

d C

um

ula

tive

ER

CO

T I

ns

talled

Win

d C

ap

acit

y b

y O

nli

ne

Date

0

1,0

00

2,0

00

3,0

00

4,0

00

5,0

00

6,0

00

Jan-06

Mar-06

May-06

Jul-06

Sep-06

Nov-06

Jan-07

Mar-07

May-07

Jul-07

Sep-07

Nov-07

Jan-08

Mar-08

May-08

Jul-08

Sep-08

Nov-08

Jan-09

Mar-09

West ERCOT New Wind Capacity (Cumulative MW)

0246810

12

Implied Heat Rate ERCOT and West ERCOT (MMBTU/MWh)

West E

RC

OT

Im

plie

d

Heat R

ate

(R

ight A

xis

)

Insta

lled W

ind C

apacity

in E

RC

OT

West Z

one*

(Left

Axis

)

*Only

inclu

des n

ew

win

d c

apacity

in E

RC

OT

West Z

one w

ith o

nlin

e d

ate

s b

etw

een 2

006 a

nd 2

009Y

TD

.

Sourc

e: G

enera

tor

prices f

rom

ER

CO

T. Insta

lled w

ind c

apacity

fro

m E

nerg

y V

elo

city

as o

f A

pr.

30, 2009.

ER

CO

T Im

plie

d H

eat

Rate

(R

ight A

xis

)

Page 50: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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50

Rate

Im

pact

Th

resh

old

fo

r R

PS

None e

xplic

itly

sta

ted

$20/M

Wh T

ier

1 n

on-s

ola

r ($

40/M

Wh in

201

1),

$1

5/M

Wh T

ier

2,

$45/M

Wh in

200

8 f

or

sola

r an

d d

eclin

ing b

y $5/M

Wh p

er

year

until $5/M

Wh fix

ed.

Com

plia

nce c

an b

e d

ela

yed if

RE

Cs

cost

is >

1%

of to

tal annu

al ele

ctr

icity

sale

s

reve

nu

es (

curr

ently

only

sola

r, b

ut

will

in

clu

de o

ther

rene

wable

s)

20%

by

202

2

Mary

lan

d

Altern

ative

com

plia

nce r

ate

dete

rmin

ed

by

com

mis

sio

n o

n a

case-b

y-case

basis

None

None

None

None

Alt

ern

ati

ve C

om

pli

an

ce P

aym

en

t

Am

ount

dete

rmin

ed b

y com

mis

sio

n o

n a

case-b

y-case b

asis

4%

of

ann

ual re

ven

ue r

equirem

ent

25%

by

202

5 f

or

Larg

e

Utilit

ies

5-1

0%

by

20

25 f

or

Sm

all

Utilit

ies

Ore

go

n

Not

passed o

nto

custo

mers

.

For

sola

r: $

450/M

Wh in

200

9,

$4

00/M

Wh

in 2

01

0 &

20

11;

decre

asin

g b

y $5

0/M

Wh

eve

ry t

wo y

ears

until 2024.

For

oth

er

ren

ew

able

s:

$45/M

Wh, adju

ste

d

ann

ually

by

CP

I

3%

of

nonre

ne

wable

port

folio

12.5

% b

y 2

02

5

(just

pass

ed in M

ay

200

8)

Oh

io

None e

xplic

itly

sta

ted

1%

of

nonre

ne

wable

port

folio

in 2

006,

incre

asin

g b

y 0.2

% p

er

year

up t

o 2

.0%

in

201

1 a

nd b

eyon

d

20%

by

202 f

or

IOU

s10%

by

202

0 f

or

Coo

ps

New

M

exic

o

$40/M

Wh if not

limite

d b

y ra

te im

pact

The lesser

of

a 0

.5%

incre

ment

on p

rior

year

rate

or

0.5

% c

um

ula

tive

rela

tive

to

base y

ear

(May

20

07)

2%

by

20

08

10%

by

201

525%

by

202

5(in-s

tate

resourc

es o

nly

befo

re 2

012)

Illi

no

is

Com

mis

sio

n m

ay

ass

ess

the v

alu

e o

f R

EC

snecess

ary

to h

ave

com

plie

d w

ith

RP

S a

nd im

pose a

n a

dm

inis

trative

fee

equ

al to

all

or

part

of

that

valu

e

2%

of

nonre

ne

wable

port

folio

20%

by

202

0 f

or

IOU

s

10%

by

202

0 f

or

PO

Us

Co

lora

do

Pen

alt

y f

or

no

t m

eeti

ng

RP

SC

ost

Cap

/ R

ate

Im

pact

Lim

itR

PS

Req

uir

em

en

tsS

tate

Som

e s

tate

s h

ave s

et

rate

im

pact th

reshold

s for

meeting R

PS

. T

ho

ugh N

ew

Engla

nd

sta

tes d

o n

ot have s

pecific

rate

im

pact th

reshold

s, ra

te p

aye

rs t

ole

rance m

ay b

e t

este

d

if c

osts

do n

ot de

cre

ase o

ver

tim

e.

Page 51: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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Su

mm

ary

of

Ch

allen

ges f

or

Ren

ew

ab

le D

evelo

pm

en

t

•F

inancin

g o

ptio

ns h

ave b

ecom

e m

ore

lim

ited.

•R

enew

able

cre

dit p

ricin

g is lo

cal and n

o n

ational m

ark

et until

new

legis

lation is p

assed

•R

ate

im

pact lim

itations/tole

rance in s

om

e s

tate

s a

re s

ignific

ant

•N

IMB

Y r

eactio

n is s

erious p

roble

m in w

ind a

nd s

ola

r in

cert

ain

are

as

•T

ransm

issio

n c

onstr

ain

ts c

ontinue to s

ignific

antly lim

it the

deliv

ery

of re

new

able

energ

y

•R

eduction o

f short

-term

energ

y p

rices c

ould

cre

ate

sig

nific

ant

concern

s for

exis

ting c

yclin

g a

nd b

aselo

ad

pla

nts

.

•In

tegra

tion c

ost associa

ted a

ccom

modating a

larg

e a

mount of

inte

rmitte

nt re

sourc

es is s

till

gre

atly u

ncert

ain

Page 52: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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52

Cu

rren

t B

ratt

leA

cti

vit

ies in

Ren

ew

ab

le E

nerg

y

•E

valu

ati

ng

th

e f

inan

cia

l ri

sks

for

develo

pers

under

unce

rtain

energ

y, r

en

ew

able

cre

dit a

nd

carb

on p

rices

•E

valu

ati

ng

bid

off

ers

from

supplie

rs

•E

sti

mati

ng

th

e i

ncre

men

tal

dem

an

d f

or

mo

re f

lexib

le g

en

era

tio

n

resourc

es a

nd t

he c

ost

of

those r

esourc

es w

hen inte

gra

ting larg

eam

ount

of

inte

rmitte

nt

rene

wa

ble

s

•E

valu

ati

ng

ec

on

om

ic d

evelo

pm

en

t im

pact

of

rene

wab

le e

nerg

y pro

jects

•E

valu

ati

ng

th

e i

mp

act

of

RP

S o

n r

eta

il t

ari

ff

•E

valu

ati

ng

th

e e

co

no

mic

ris

ks a

ssocia

ted

with v

ari

ous p

roje

ct

ow

ners

hip

and f

inancia

l str

uctu

res

•E

valu

ati

ng

th

e e

co

no

mic

ben

efi

ts o

f tr

an

sm

issio

n o

ptio

ns w

hen

inte

rcon

nectin

g r

ene

wa

ble

s

•E

sti

mati

ng

th

e b

en

efi

t o

f p

um

ped

sto

rag

e a

s inte

rmitte

nt

resourc

es

are

add

ed

Page 53: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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53

Th

e B

ratt

le G

rou

p –

Serv

ice

s t

o E

nerg

y C

om

pan

ies

•C

lim

ate

Ch

an

ge

Po

lic

y a

nd

P

lan

nin

g

•C

ost of C

apital

•D

em

and F

ore

casting a

nd W

eath

er

Norm

aliz

ation

•D

em

and R

esponse a

nd E

nerg

y

Effic

iency

•E

lectr

icit

y M

ark

et

Mo

de

lin

g

•E

nerg

y A

sse

t V

alu

ati

on

•E

nerg

y C

on

tract

Litig

ation

•E

nvironm

enta

l C

om

plia

nce

•F

uel and P

ow

er

Pro

cure

men

t

•In

centive R

egula

tion

•R

ate

Desig

n,

Co

st

All

oca

tio

n, a

nd

R

ate

Str

uctu

re

•R

eg

ula

tory

Str

ate

gy a

nd

Lit

igati

on

S

up

po

rt

•R

en

ew

ab

les

•R

esourc

e P

lannin

g

•R

eta

il A

ccess a

nd R

estr

uctu

ring

•R

isk M

anagem

ent

•M

ark

et-

Based R

ate

s

•M

ark

et

Desig

n a

nd

Co

mp

eti

tive

An

aly

sis

•M

erg

ers

and A

cq

uis

itio

ns

•T

ran

sm

issio

n

Page 54: Update on Renewable Energy Market Trendss3.amazonaws.com/ebcne-web-content/fileadmin/pres/Chang.pdf · Overview of renewable energy demand and market drivers ... (Investor owned utilities)

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Con

tact

Judy

Chan

g–

En

ergy

Pra

ctic

e

at

jud

y.c

han

g@

bra

ttle

.com

44 B

ratt

le S

tree

t, C

am

bri

dge,

MA

02138

617-8

64-7

900

CA

MB

RID

GE

S

AN

FR

AN

CIS

CO

W

AS

HIN

GT

ON

B

RU

SS

EL

S

L

ON

DO

N

Th

e B

ratt

le G

roup p

rovid

es c

onsu

ltin

g a

nd e

xper

t te

stim

ony i

n e

conom

ics,

fin

ance

, an

d r

egula

tion t

o c

orp

ora

tio

ns,

law

fir

ms,

and

gover

nm

ents

aro

un

d t

he

worl

d.

We

com

bin

e in

-dep

th i

ndu

stry

exper

ience

, ri

goro

us

anal

yse

s, a

nd

pri

nci

ple

d t

echniq

ues

to h

elp c

lien

ts a

nsw

er c

om

ple

x e

con

om

ic a

nd

fin

anci

al q

ues

tion

s in

lit

igat

ion

and

reg

ula

tion,

dev

elop

str

ateg

ies

for

chan

gin

g m

arket

s, a

nd m

ake

crit

ical

bu

sines

s dec

isio

ns.

We

are

dis

tinguis

hed

by:

Th

oug

htf

ul,

tim

ely,

and

tra

nsp

aren

t an

alyse

s o

f in

du

stri

es a

nd

iss

ues

Aff

ilia

tio

ns

wit

h l

ead

ing

in

tern

atio

nal

aca

dem

ics

and

hig

hly

cre

den

tial

ed i

nd

ust

ry s

pec

iali

sts

Cle

arly

pre

sen

ted

res

ult

s th

at w

ith

stan

d c

riti

cal

revie

w