Recognizing the Value of Existing Hydropower June 25, 2009

Transcription

1 Recognizing the Value of Existing Hydropower June 25, 2009

2 Table of Contents Brookfield Asset Management Overview Brookfield Renewable Power Overview Hydropower is an Important Contributor to Renewable Energy in NE and NY Why is Hydropower Capacity Declining? Policies Pumped Storage

3 Brookfield Asset Management Overview

4 Brookfield Asset Management A global asset management company Brookfield Asset Management is an asset management company, focused on property, power and infrastructure assets Approximately US$80 billion of assets owned and under management Approximately 10,000 employees in the Americas, Europe and Australia 120 million sq. ft. office and retail space 165 renewable power plants 2.5 million acres of timberlands 11,000 km of transmission lines

5 Brookfield Renewable Power Overview

6 Brookfield Renewable Power Brookfield Renewable Power is a responsible developer, owner and operator of renewable power generation facilities Brookfield Renewable Power has strong corporate values Long-term commitment to communities in which we operate High safety standards Environmentally responsible Brookfield Renewable Power is committed to growth on a value basis

7 Brookfield Renewable Power Unique power operations focused on renewable energy sources Brookfield Renewable Power is a leading producer and developer of renewable energy focused on: hydroelectric wind Over US$12 billion of assets owned and under management Approximately 1,000 employees in North America and Brazil

8 Brookfield Renewable Power Leader in hydroelectric power in North America and Brazil Hydroelectric Portfolio Total Output Capacity Markets Stations MW United States New England New York PJM/MISO Louisiana Canada Quebec Ontario British Columbia Brazil Hydroelectric Wind 5% 5% 90% 164 3,756 Other 95% of our production is sourced from renewable energy Generating assets on 64 river systems Over 100 years of power generating experience

9 Hydroelectric - New England Operating Statistics Installed capacity: 841 MW* Annual generation: 1,828 GWh Storage: 509 GWh Generating stations: 20 Generating units: 68 - Located on five river systems in New Hampshire and Maine. - New England assets are interconnected to the New England Power Pool. * Includes 600 MW Pumped Storage Facility

10 Hydroelectric - New York State Operating Statistics Installed capacity: 705 MW Annual generation: 3,025 GWh Storage: 541 GWh Generating stations: 75 Generating units: Located on 15 river systems in upstate New York. - New York assets are interconnected to five different NYISO market zones. Production Centers Installed Annual Capacity Generation Generating Generating in MW in GWh Units Stations Lake Ontario Operations St. Lawrence Operations 229 1, Hudson River Operations 261 1,

11 Active Participant in New England and New York New York Own over 87% of all non-nypa, non-utility owned/controlled hydropower in the state (13.5% of all hydropower) 12 NY projects participate in NY RPS Main Tier selected via auction Maine Own over 20% of all hydropower in the state Sell REC s into ME RPS New Hampshire Own 5% of all hydropower in the state Rhode Island Participate in RI RPS Massachusetts Bear Swamp Pumped Storage is 8 th largest power plant in state Nationwide: 40% of Brookfield facilities are Low Impact Hydropower Institute (LIHI) certified 71% if our stations are 5 MW or under Participate in mandatory and voluntary attribute markets

12 Hydropower is an Important Contributor to Renewable Energy in NE and NY

13 FERC-Licensed Hydropower in New England 198 Hydropower facilities in operation 3500 MWs installed nameplate capacity 138 facilities are under 5 MW 70% of all stations 5% of all capacity x 5 Source: FERC

14 Hydropower Share of New England Generation Hydropower is important share of overall electricity capacity Hydropower generally makes up large percentage of overall renewable power capacity 27.8% (79%) 17% (49%) Important to maintain if states are going to meet their clean energy goals 1.9% (46%) 11.5% (74%) 1.6% (43%) 11.5% (74%) Source: EIA DOE, 2007 data Hydropower share of total capacity / (percentage of all renewable capacity made up by Hydropower)

15 Hydropower Installed Capacity Declining Installed Hydro Capacity - All New England Installed Hydro MW MW % Decline in Hydropower Capacity from 1997 to 2007 in New England states Year Change in Hydro Capacity by State MW 0 MA ME VT RI CT NH State Only New Hampshire has had increase Source: EIA - DOE

16 Why?

17 Possible Reasons 70% of FERC-licensed hydropower project are under 5 MW Re-licensing costs are the same regardless of size of facility Environmental safeguards have same capital cost regardless of size Size correlates to power revenues Commodity pricing Revenues from other sources (RPS, Voluntary RECs, Capacity) limited Do smaller hydropower projects face greater challenges than large ones? Dam retirements Natural retirements maintenance & replacement ESA Atlantic Salmon, American eels Compliance costs

18 Possible Policy Approaches

19 Policy Approaches Renewable Electricity Standards Have been focused on new growth Baseline set hydropower often is the baseline Little attention to erosion of baseline or replacement costs Some include tier for small hydropower regardless of project age Some have tiers that include small hydropower regardless of project age but usually compliance obligations/demand not robust New York has Maintenance Tier Current national RES bills do not include any pre-1992 hydro Waxman-Markey supports wind, solar, etc. regardless of vintage Inclusion of Low Impact Hydropower Institute certified hydro as opposed to age cut-off would help preserve good, existing hydropower Most advanced environmental safeguards Rewards good behavior Cap and Trade Putting a price on carbon creates demand and pricing incentive for renewables But only if the program accurately prices carbon (doesn t artificially lower it through allocation scheme)

20 Pumped Storage

21 Pumped Storage Two New England states (Massachusetts & Connecticut) and New York have pumped storage Totals 2,969 MW in 2007 (31 MW increase from 1997) Net user of electricity 1.3 MW used : 1 MW generated Important resource as more intermittent renewable resources are added to the grid Quick start Dispatchable Transmission firming Policy approach: Recognize value of pumped storage role in green energy future investment tax credits, etc.

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