NOVEMBER 13, 2015 BOSTON, MA Managing the Rapid Transformation of New England s Energy Resources New England-Canada Business Council Gordon van Welie PRESIDENT AND CEO
New England Has Seen Dramatic Changes in the Energy Mix: From Oil and Coal to Natural Gas Percent of Total Electric Energy Production by Fuel Type (2000 vs. 2014) 2000 2014 44% 31% 34% 22% 18% 15% 13% 15% 1% 5% 1.7% 1% Nuclear Oil Coal Natural Gas Hydro and Other Renewables Pumped Storage Source: ISO New England Net Energy and Peak Load by Source Other renewables include landfill gas, biomass, other biomass gas, wind, solar, municipal solid waste, and miscellaneous fuels 2
Natural Gas and Wholesale Electricity Prices Are Linked Electric Energy $/MWh $180 $160 $140 $120 $100 $80 $60 Monthly Average Natural Gas and Wholesale Electricity Prices in New England Hurricanes hit the Gulf Before the Recession and Marcellus Shale gas boom Record low natural gas and wholesale electricity prices Winter 2013/2014 Winter 2012/2013 $30 $25 Winter 2014/2015 $20 $15 $10 Fuel $/MMBtu $40 $20 $5 $0 $0 Wholesale Electricity at New England Hub (Real-Time LMP) Natural Gas 3
Region Has Not Developed Gas Pipeline Infrastructure to Keep Pace with Growth of Gas-fired Generation 16,000 14,000 12,000 10,000 8,000 6,000 4,000 Cumulative New Generating Capacity in New England (MW) Natural Gas Fuel Cell Hydro Solar Biomass Nuclear Wind Oil 2,000 0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Note: New generating capacity for years 2016 2018 includes resources clearing in recent Forward Capacity Auctions. 4
New England Shifts to Coal and Oil in the Winter 250,000 200,000 Winter 2014 2015 Fossil Fuel Mix Oil Coal Natural Gas / LNG Daily Energy MWh 150,000 100,000 50,000 0 D b 1 2014 J 1 2015 F b 1 2015 5
The Region Has Lost and Is at Risk of Losing Substantial Non-Gas Resources Major Generator Retirements: Salem Harbor Station (749 MW) 4 units (coal & oil) Vermont Yankee Station (604 MW) 1 unit (nuclear) Norwalk Harbor Station (342 MW) 3 units (oil) Brayton Point Station (1,535 MW) 4 units (coal & oil) Mount Tom Station (143 MW) 1 unit (coal) Pilgrim Nuclear Power Station (677 MW) 1 unit (nuclear) Additional retirements are looming 6
State Policy Requirements Are Driving Proposals for Renewable Energy 25% 20% State Renewable Portfolio Standard (RPS)* for Class I or New Renewable Energy by 2020 20% 59%* 15% 10% 10% 11% 12.5% 15% 5% 0% ME NH RI MA CT VT * State Renewable Portfolio Standards (RPS) promote the development of renewable energy resources by requiring electricity providers (electric distribution companies and competitive suppliers) to serve a minimum percentage of their retail load using renewable energy. Vermont s new Renewable Energy Standard has a total renewable energy requirement (reflected above), which recognizes large-scale hydro and all other classes of renewable energy. 7
ISO New England Forecasts Strong Growth in Solar PV Megawatts (MW) 3,000 2,500 2,000 1,500 1,000 500 0 Cumulative Growth in Solar PV through 2024 (MW*) 40 900 2,400 January 2010 Thru 2014 2024 Source: Final PV Forecast (April 2015); Note: MW values are AC nameplate 8
Natural Gas and Transmission Infrastructure Will Be Needed to Deliver Energy from Proposed Resources All Proposed Generation Developers are proposing to build 11,000 MW of generation, including 6,700 MW of gas-fired generation and 4,100 MW of wind Natural gas 61% Wind 37% Wind Proposals VT VT 30 149 MW MW NH 65 91 MW ME ME 3,080 3,379 MW MW MA MA 464 480 MW Other 2% Source: ISO Generator Interconnection Queue (October 2015) FERC Jurisdictional Proposals Only 9
Transmission Developers Are Proposing to Move Renewable Energy to New England Load Centers As of October 1, 2015, seven elective transmission projects had been proposed in the ISO Interconnection Queue, totaling more than 4,000 MW of potential capacity Primarily large-scale hydro resources from eastern Canada and wind resources from northern New England Representative of the types of projects announced for the region in recent years These projects seek to address public policy goals, not reliability needs Source: ISO Interconnection Queue (October 2015) http://www.iso-ne.com/system-planning/transmission-planning/interconnection-request-queue 10