Emerging Trends In North American Energy: Focusing On New...

Power Advisory LLC 2017. All Rights Reserved.Power Advisory LLC 2017. All Rights Reserved.

www.poweradvisoryllc.com

Emerging Trends In North American Energy: Focusing On New England’s Electricity Market

June 7, 2017

Prepared for East Coast Energy Connection

Power Advisory LLC 2017. All Rights Reserved.

www.poweradvisoryllc.com

Content & Contact

•What’s driving change?

• Impacts on New England market

•New England Clean Energy Requirements

•New England Renewable Policies

•Tri-State Clean Energy RFP

2

East Coast Energy ConnectionJune 7, 2017

John Dalton

[email protected]

978-369-2465

212 Thoreau Street

Concord, MA 01742


3

What’s driving change?

Major disruption occurring in electricity sector

Decentralization Digitization Decarbonization

Disruption

Distributed generation(Rooftop solar)Energy storageMicrogrids

Smart Meters & AppliancesRetail rate alternatives

Increased renewables Carbon taxesElectric vehiclesAir source heat pumps

Wholesale market impactsBusiness model changes

Generator retirementsNew electricity products

Exiting merchant marketWholesale/Retail Integration

3


Decarbonization

Font size indicates importance

Bold indicates growing

importance

4

What’s driving change?

Three Ds and New England’s Electricity Market

4Decentralization

DigitalizationRGGI

Air Source Heat Pumps

Micro Grids

Grid Mod

Energy Storage

Energy Efficiency

Demand Response

Net Metering

Electric Vehicles

Rooftop SolarDER

IMAPP


Impact on Electricity Demand

Net electricity demand is declining

Source: Power Advisory, ISO-NE CELT 2017

BTM PV = Behind the Meter PV; EE = Energy Efficiency

5

MW

Savings

Summer Peak Demand With and Without EE and PV Savings

- BTM PV & EE

- BTM PV

• New England states are leaders in DSM

• Rooftop PV growth reducing net demand

• EVs & Heat pumps offset?


• Reflecting this market disruption and low natural gas prices:

• Nuclear and coal-fired units retiring, further increasing reliance on gas units

• 5,500 MW of older generating units at risk of retiring

6

Regional Resource Mix

Significant non-gas generation resources retiringor at risk

Source: Power Advisory, ISO-NE 20176

Generation at risk

Closed or retiring

*Bridgeport Unit 2 closed, Unit 3 at risk


• New England states agreed to cut CO2 emissions as much as 45% below 1990 levels by 2030 and 80% below by 2050

• MA and CT, account for 70% of electricity requirements, GHG emission reductions supported by legislation

• Achieving these GHG emission reduction targets require increasing volumes of clean energy over time

7

New England Clean Energy Requirements

New England states have aggressive GHG emission reduction targets

Source: ISO-NE


• Total regional emissions dropped by 13% between 2000 and 2015. Electric power sector GHG emissions decreased 24%

• Fuel-switching from coal to natural gas lead these emission reductions, along with incremental clean energy resources and increased energy efficiency

• Electrification of other sectors: space heating & transportation primary decarbonization strategies 8


Regional emission reductions rely heavily on electricity sector

Source: EPA 2014

Total Greenhouse Gas Emissions by Sector

8


• New England states need additional 8 TWh per year by 2025 to meet current statutory Renewable Portfolio Standards (RPS) 9


New England has relied on RPS as the primary tool to promote renewables development

State Wind Solar Fuel

Cells

Geo-

thermal

Landfill

Gas

Anaerobic

DigestionMarine Hydro Biomass

2015-2025

Incremental Class I

Demand (TWh)

Connecticut

Certain run-of-

the-river

Low

emission1.8

Maine .2

Massachusetts

(Built after

12/31/97)

Using

renewables

New, <30 MW,

meet

environmental

regulations

Low

emission4.2

New Hampshire

(Built after 1/1/06)

If not

used for

Class II

Post

12/31/12

New

incremental

production of

existing

Limited .8

Rhode Island

Using

renewables <30 MW Limited .9

Vermont Certified .2

Total All All* Most All* Most Few All Varies Varies 8


10

• On-shore wind in Maine accounts

for 56% of the renewables in ISO-

NE Interconnection Queue

• Second largest source is Mass

offshore wind generation


Transmission queue indicative of development

8,457 MW of

Solar & Wind in

ISO-NE Queue

Source: Power Advisory, ISO- NE Data March 2017


11

• Primary transmission path for Maine 345 kV transmission backbone

• Also transfers power from New Brunswick to Southern New England

• Majority of wind development in Maine located in northeast and must cross all three interfaces to deliver to Southern New England

• Each interface is progressively higher loaded

• HVDC transmission: a better alternative?


Wind exports from Maine must cross three transmission interfaces

Orrington South (1,325 MW)

Surowiec South (1,500 MW)

Maine-New Hampshire (1,900 MW)

Westbrook CCGT

Bucksport CCGT

Brookfield Hydro (Northeast)

Maine Independence CCGT

Major Generation Station

Transmission Interface

Transmission Line

Yarmouth Steam

Source: Power Advisory 11


Tri-State Clean Energy RFP

Tri-State RFP Contact Awards

Cassadaga Wind Farm 126 MW

EverPower Wind Holdings, Inc.

Chautaugua County, NY

Candlewood Solar 20 MW

Ameresco, Inc.

New Milford, CT

Antrim Wind 28.8 MW

Eolian RE LLC / Walden Green Energy LLC

Antrim, NH

Simsbury Solar Farm 26.4 MW

Deepwater Wind, LLC

Simsbury, CT

Farmington Solar* 50 MW

Farmington, ME

Sanford Airport Solar* 50 MW

Sanford, ME

Woods Hill Solar** 20 MW

Pomfret, CT

Cranston Solar** 20 MW

Cranston, RI

Quinebaug Solar* 50 MW

Brooklyn / Canterbury, CT

Chinook Solar* 50 MW

Fitzwilliam, NH

Enfield Solar* 20 MW

Enfield / Somers, CT

Note:

*Ranger Solar LLC / MAP Royalty, Inc.

**RES Americas Development Inc.

Solar ≈ 300 MW Wind ≈ 155 MW

Contracted Proposed Projects:

Transmission ≈ 0 MW

12


John Dalton

212 Thoreau Street

Concord, Massachusetts 01742

(978) 369-2465 (office) [email protected]

(978) 831-3368 (mobile) www.poweradvisoryllc.com

13

Thank you & Questions?


• Leading North American management consulting firm specializing in electricity sector matters and solutions

• Advising generators, investors, financiers, marketers and traders, transmitters, distributors, regulators, and Governments on a wide range of North American electricity sector matters

• Particular emphasis on Northeast U.S. Ontario, Alberta, and Maritimes

• Specializing in electricity market analysis, demand and supply forecasts, price and costs to customer forecasts, business strategy, market design, rate design, investment strategies, project acquisition, project development, project feasibility assessment, project due diligence, power procurement, contract design and management, and policy development

• Power Advisory LLC has offices in Boston, Toronto and Calgary and advises clients across North America

• To learn more about Power Advisory LLC, including consultant bios, please go to http://www.poweradvisoryllc.com/

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About Power Advisory LLC

http://www.poweradvisoryllc.com/


• Market Analysis and Forecasting

• Evaluated and analyzed virtually all competitive wholesale power markets across North America and have a detailed understanding of pivotal issues and solutions across North America

• Electricity price and costs to customer forecasts (including Global Adjustment in Ontario), supply and demand forecasting, natural gas price forecasting, wholesale market analysis, power contracting, rate design, and regulatory strategy

• Market Design and Policy Development

• Wholesale electricity market design, market structure assessment and design, regulatory frameworks and regulated markets, and contract markets

• Advised and acted for Governments, Government agencies, regulators, RTOs/ISOs on wholesale electricity market design, retail market design, and rate design in Ontario, Alberta, Northeast U.S., New Brunswick, Nova Scotia, and Western Australia

• Provided detailed policy advice to Governments, Government agencies, regulators, RTOs/ISOs, and other stakeholders across North America

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Power Advisory LLC Services


• Business Strategy and Project Development

• Advised on opportunities for generation, transmission, energy storage and smart grid related project development and investment, market entry strategy, project feasibility assessments, regulatory considerations, financial assessments, contract negotiations and contract management

• Power Procurement Design and Participation

• Designed RFPs, Feed-In Tariff and Standard Offer programs, and procurement contracts, including administering procurement processes, evaluating proposals and executing procurement contracts

• Advised clients on their bids/proposals to power supply procurement processes

• Regulatory and Litigation Support

• Testified on need for generation, costs and performance of different generation technologies, forecasts of wholesale electricity prices, procurement programs, competitive implications of electric utility mergers, transmission pricing, and need for transmission

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• Electricity Price and Costs to Customer Forecasting, and Demand and Supply Forecasting

• Wholesale spot price forecasts, including negative prices conveying potential for curtailment of energy production

• Demand and supply forecasts, including Surplus Baseload Generation

• Costs to customer forecasts, including Global Adjustment forecasts for Ontario, and default supply price arrangements (e.g., Regulated Price Plan in Ontario)

• Forecasts and projections of all components of costs to customers, including generation by fuel type, transmission and distribution, regulatory charges, and debt retirement charges for Ontario

• Power System Planning, including Assessment and Identification of Resource Needs

• Evaluation of power system needs, including timing of these needs, and recommended solutions to meet these needs (i.e., imports, generation, transmission, conservation and demand management including demand-response, etc.), including strategies to deliver solutions

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