Wind Development in the Midwest

Transcription

1 Wind Development in the Midwest ELPC Midwest Transmission Strategy Meeting Melissa Seymour Midwest Market Structure Iberdrola Renewables April 20, 2010 Chicago, IL Elk River Wind Power Project, Kansas

2 About Us: Iberdrola Group More than 43,300 MWs of installed capacity 108-year history with roots in hydroelectric Leading wind producer worldwide with 10 GW installed, 58.4 GW pipeline Installed wind represents 1/12 of the world s total capacity 33,000 employees in 40 countries One of the lowest CO2 emissions levels in the electricity sector Strategic focus on US, UK, Latin America and Spain Generation Capacity Traditional Thermal 18% Gas Mexico 12% Gas 19% (52% emissions-free) 52% Hydro 23% Nuclear 8% Renewables 21% that is flexible and economical Updated Feb. 24,

3 Iberdrola Renewables: A Leader in Execution A collection of exceptional assets #2 developer in the U.S. with nearly 3.6 GWs (1,311 MWs of wind started up in 2009) US Renewables U.S. represents 1/3 of earnings 24.5 GWs of wind development pipeline is in the U.S. 826 employees in 28 U.S. states, DC and Canada 621 MW of CCGT & peaking capacity on the strategic CA-OR border 155 BCF of owned & contracted natural gas storage positioned for a volatile future Wind Power Gas 2,876 MW in MW CCGT 100 MW peaking Corporate Support 155 BCF Owned & Contracted with excellent growth prospects Updated Feb. 23,

4 North American Asset Portfolio Wind projects owned or controlled Gas storage owned Thermal generation Biomass cogeneration Updated March

5 Mid-Continent Wind Assets 5

6 The Future For the first time, the U.S. has more wind power than any country in the world. In 2009,9,900 MW of new wind generating capacity was added in the United States, accounting for 39% of all new generation capacity Just two percent of total energy consumed from renewables we have room to grow Wind Capacity (GW) 120 GW in the world US (25 GW) Germany (23 GW) Spain (14 GW) Rest of World 6

7 Renewable Development Challenges The renewable energy industry is facing significant challenges on many fronts, and as renewable technologies mature, these challenges are growing rather than receding. Depressed natural gas prices Governmental budget pressures on renewable energy incentive programs Fragmented and uncertain state renewable energy portfolio requirements Lack of long-term stable Federal Renewable energy incentives Difficult market for power purchase agreements Institutional discrimination by various incumbent utilities and Independent System, Operator ( ISO )/Regional Transmission Operator ( RTO ) structures. Increase in curtailment as new generation connecting to the system competes with existing generation to flow over scarce transmission Transmission infrastructure necessary for unconstrained deliveries has not kept pace with new generator interconnections.

8 Transmission will be the limiting factor. 8

9 The State of Electric Transmission in the U.S. A significant paradox exists in U.S. energy policy that affects development of renewable energy resources and transmission systems: The U.S. has strong domestic renewable energy resources with hopes to develop them for environmental, economic and energy security goals. 28 states plus D.C. have adopted a Renewable Portfolio Standard The Obama Administration supports development of renewables To develop a market for large amounts of renewables, new transmission must be built to link remote areas rich in renewables with distant population centers. Transmission planning, permitting, investment, and cost recovery are so fragmented and complex that achieving these goals will be challenging without a better approach

10 U.S. Markets for Renewable Energy: 28 states with mandatory RPS requirements Those states ~= 50% of US KWh (map shows population density) States with circles: RPS high KWh use high electricity price Source of maps: UCS, US Census

11 Connecting Renewables to Loads The best wind resources in the U.S. are located in areas where the grid is the weakest Source of maps: NREL, Platts

12 Key Issue for Midwest: Transmission Cost Allocation Iberdrola s future Midwest development is dependent on the outcome of the Midwest ISO s Cost Allocation proceeding 90/10 cost allocation mechanism has a deleterious impact on wind development in the Midwest Clarity regarding the rules and policies that will affect renewables projects is essential in order for developers to be able to finance and ultimately construct the projects that will harness the region s renewable energy The cost allocation proposal must resolve the key questions of What Gets Built and Who Pays All parties should pay their fair share of new and upgraded transmission should not fund transmission from interconnection queue. Needs to be assurance that needed transmission additions will actually get built third party transmission providers should have an opportunity to construct new facilities

13 Questions? Big Horn Wind Power Project, Washington