Invenergy. The Power of Innovation

Transcription

1 The Power of Innovation

2 Discussion Outline Introduction to Wind generation development 101 The impact of HB 1871 The Illinois state RPS

3 Wind Overview Operational Projects Contracted Projects Offices

4 Midwest Portfolio Bishop Hill Locations: IL Size: 400 MW COD: Late 2008 Interconnection: PJM/MISO Grand Ridge Location: IL Size: 350 MW COD: Mid 2008 Interconnection: PJM Forward Location: WI Size: 200 MW COD: 2007 Interconnection: ATC Nelson CC Location: IL Size: 600MW COD: Mid 2009 Interconnection: PJM Wind Project Wind Project Gas-Fired Project Gas-Fired Project Victory Location: IA Size: 99 MW COD: December 2006 Interconnection: MidAm White Oak Location: IL Size: 150 MW COD: Late 2007 Interconnections: MISO

5 Wind Development 101 Wind Wind turbines Land Interconnection agreement A market for the energy A market for the renewable energy credits

6 Wind Intensity in the U.S.

7 Wind Turbines How big are they? Tower - 80 meters (about 25 stories) at the hub Blades 38 meters (about 100 feet) long How are they put together Concrete footing poured Three tower pieces assembled in place Three blades attached to the hub and lifted into place How fast do they turn? 16 RPM (one rotation every four seconds)

8 Land Use Wind farms and agriculture are very compatible Wind farms require from acres per turbine, with a typical wind farm comprising of 100 turbines When completed, each turbine only removes 0.25 acres from production Hosting a wind farm greatly benefits the community Tax base increased by ~ $2.5 MM per turbine Affected landowners receive compensation through easement and waiver agreements

9 Interconnection Agreement The interconnection agreement allows for the generator to interconnect to the electric transmission system This process is one of the most time consuming steps of the development process: Step MISO PJM Feasibility Study 150 days 240 days System Impact Study 148 days 120 days Facility Study 175 days 120 days* Interconnection Agreement 210 days 30 days Commercial Operation 365 days* 365 days* Total Time (days) 1048 days 875 days * Timeline not limited in tariff In recent experience, neither PJM nor MISO has been able to adhere to these timelines

10 Marketing the Energy and RECs How wind energy and RECs are sold varies by market In less actively traded markets, energy and RECs are sold under long term contracts to load serving utilities Contracts typically years long Pricing fixed for the term Common in CO and WI In more actively traded markets, energy and RECs are often sold separately Energy sold into power pool Energy price risk managed through commodity risk managers, typically for 10 years RECs sold to load serving entities Common in TX and PJM

11 Impact of HB 1871 On May 3 rd, the IL House passed a bill providing for a renewable portfolio standard (RPS) for IL Sets a requirement that 25% of IL s energy requirements are met by renewables by 2025, with implementation beginning in 2007 Requires in state generation through 2011 Protects ratepayers through caps on rate impacts Clear ratemaking requirements will be critical to its implementation Provides for 20 year power purchase agreements Provides for the Commission to review and approve solicitation processes

12 U.S. Renewable Portfolio Standards *WA: 15% by 2020 CA: 20% by 2010 NV: 20% by 2015 AZ: 15% by 2025 MT: 15% by 2015 MN: 25% by 2025; (Xcel: 30% by 2020) IA: 105 MW CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis) *NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) WI: requirement varies by utility; 10% by 2015 goal IL: 8% by 2013 VT: RE meets load growth by 2012 ME: 30% by 2000; 10% by 2017 goal - new RE MA: 4% by % annual increase RI: 15% by 2020 CT: 10% by 2010 NY: 24% by 2013 NJ: 22.5% by 2021 PA: 18%¹ by 2020 *MD: 7.5% by 2019 *DE: 10% by 2019 DC: 11% by 2022 HI: 20% by 2020 TX: 5,880 MW by 2015 Minimum solar or customer-sited requirement * Increased credit for solar or customer-sited ¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resource Solar water heating State RPS State Goal

13 Comparison on State RPSs State IL (as proposed) WI NJ TX Size of RPS (%) 08 2% 09 4% 10 5% 11 6% 12 7% % % % % % % % % % % % % % % % Size of RPS (MWh/year) 08 2,960, ,003, ,608, ,253, ,941, ,135, ,212, ,850, ,957, ,063, ,723, ,693, ,620, ,566, ,569, ,079, ,166, ,252, ,338, ,424,000 Qualifying Technologies Solar Water Heat, Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, CHP/Cogeneration, "Other Such Alternative Sources of Environmentally Preferable Energy" Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Tidal Energy, Wave Energy, Fuel Cells using Renewable Fuels Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Resource-Recovery Facilities approved by the DEP, Anaerobic Digestion, Tidal Energy, Wave Energy, Fuel Cells using Renewable Fuels Solar Water Heat, Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Geothermal Heat Pumps, Tidal Energy, Wave Energy, Ocean Thermal Qualifying Locations 08 through 11 IL (subject to economic tests) Physical delivery to the utility (generally WI and IA) Generators that deliver energy into PJM. ERCOT 12 and beyond IL, WI, IA, MO, KY and IN

14 Meeting the IL RPS through Wind 70,000 Annual Generation (GWh/yr) 60,000 50,000 40,000 30,000 20,000 Currently Proposed Wind Capacity (GWh/yr) Wind Capacity Under Construction (GWh/yr) Existing Wind (GWh/yr) REC Requirements to be Met by Wind (GWh/yr) AWEA Estimated IL Wind Energy Potential (GWh/yr) 10,

15 Proposed IL Wind Projects Project Utility/Developer Location Status MW Cap GSG Wind Farm Phase I Babcock & Brown and Lee and LaSalle Counties under construction 80 FPC Services Twin Groves I Horizon Wind Energy McLean County under construction 198 Twin Groves II Horizon Wind Energy McLean County Proposed 198 McLean Wind Energy Center (White Oak) McLean Proposed 150 Bishop Hill Henry County Proposed 350 Grand Ridge LaSalle County Proposed 400 Crescent Ridge II Midwest Wind Energy Bureau County Proposed 74 Big Sky Wind Farm Midwest Wind Energy Lee & Bureau Counties Proposed 200 Rail Splitter Wind Farm Horizon Wind Energy Logan, Tazewell Counties Proposed 100 Blackstone Wind Farm Horizon Wind Energy Livingston County Proposed Baileyville Wind Farm Navitas Energy Ogle County Proposed 80 Benson Wind Farm Navitas Energy Woodford County Proposed 160 Source - AWEA

16 Summary Wind energy can contribute significantly to serving Illinois energy supply needs going forward HR 1871 sets a high, but attainable, goal for renewables in IL, and wind will play a leading role in meeting it In order to meet that goal, developers, ISO s, landowners, utilities, and those that oversee them will have to work together

17 Questions?