Emerging Trends In North American Energy: Focusing On New England s Electricity Market June 7, 2017 www.poweradvisoryllc.com Prepared for East Coast Energy Connection
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 East Coast Energy Connection June 7, 2017 John Dalton 978-369-2465 jdalton@poweradvisoryllc.com 212 Thoreau Street Concord, MA 01742 www.poweradvisoryllc.com 2
What s driving change? Major disruption occurring in electricity sector Decentralization Digitization Decarbonization Distributed generation (Rooftop solar) Energy storage Microgrids Smart Meters & Appliances Retail rate alternatives Increased renewables Carbon taxes Electric vehicles Air source heat pumps Exiting merchant market Wholesale/Retail Integration Generator retirements New electricity products Disruption Wholesale market impacts Business model changes 3 3
What s driving change? Three Ds and New England s Electricity Market Decarbonization RGGI IMAPP Air Source Heat Pumps Electric Vehicles Rooftop Solar DER Net Metering Energy Efficiency Grid Mod Micro Grids Energy Storage Demand Response Digitalization Font size indicates importance Bold indicates growing importance Decentralization 4 4
Impact on Electricity Demand Net electricity demand is declining New England states are leaders in DSM Rooftop PV growth reducing net demand EVs & Heat pumps offset? Summer Peak Demand With and Without EE and PV Savings Source: Power Advisory, ISO-NE CELT 2017 BTM PV = Behind the Meter PV; EE = Energy Efficiency 5 - BTM PV - BTM PV & EE MW Savings
Regional Resource Mix Significant non-gas generation resources retiring or at risk 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 Generation at risk Closed or retiring *Bridgeport Unit 2 closed, Unit 3 at risk 6 Source: Power Advisory, ISO-NE 2017 6
New England Clean Energy Requirements New England states have aggressive GHG emission reduction targets New England states agreed to cut CO 2 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 Source: ISO-NE
New England Clean Energy Requirements Regional emission reductions rely heavily on electricity sector Total Greenhouse Gas Emissions by Sector 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 Source: EPA 2014 8
New England Clean Energy Requirements New England has relied on RPS as the primary tool to promote renewables development State Wind Solar Fuel Cells Geothermal Landfill Gas Anaerobic Digestion Marine Hydro Biomass 2015-2025 Incremental Class I Demand (TWh) Connecticut Certain run-ofthe-river Low emission 1.8 Maine.2 Massachusetts (Built after 12/31/97) Using renewables New, <30 MW, meet environmental regulations Low emission 4.2 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 New England states need additional 8 TWh per year by 2025 to meet current statutory Renewable Portfolio Standards (RPS) 9
New England Clean Energy Requirements Transmission queue indicative of development On-shore wind in Maine accounts for 56% of the renewables in ISO- NE Interconnection Queue Second largest source is Mass offshore wind generation 8,457 MW of Solar & Wind in ISO-NE Queue Source: Power Advisory, ISO- NE Data March 2017 10
New England Clean Energy Requirements Wind exports from Maine must cross three transmission interfaces 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? Major Generation Station Transmission Interface Transmission Line Brookfield Hydro (Northeast) Yarmouth Steam Westbrook CCGT Maine Independence CCGT Surowiec South (1,500 MW) Maine-New Hampshire (1,900 MW) Bucksport CCGT Orrington South (1,325 MW) 11 Source: Power Advisory 11
Tri-State Clean Energy RFP Tri-State RFP Contact Awards Contracted Proposed Projects: Solar 300 MW Transmission 0 MW Wind 155 MW Antrim Wind 28.8 MW Eolian RE LLC / Walden Green Energy LLC Antrim, NH Farmington Solar* 50 MW Farmington, ME Cassadaga Wind Farm 126 MW EverPower Wind Holdings, Inc. Chautaugua County, NY Chinook Solar* 50 MW Fitzwilliam, NH Enfield Solar* 20 MW Enfield / Somers, CT Sanford Airport Solar* 50 MW Sanford, ME Simsbury Solar Farm 26.4 MW Deepwater Wind, LLC Simsbury, CT Woods Hill Solar** 20 MW Pomfret, CT Note: *Ranger Solar LLC / MAP Royalty, Inc. **RES Americas Development Inc. Candlewood Solar 20 MW Ameresco, Inc. New Milford, CT 12 Quinebaug Solar* 50 MW Brooklyn / Canterbury, CT Cranston Solar** 20 MW Cranston, RI
Thank you & Questions? John Dalton 212 Thoreau Street Concord, Massachusetts 01742 (978) 369-2465 (office) jdalton@poweradvisoryllc.com (978) 831-3368 (mobile) www.poweradvisoryllc.com 13
About Power Advisory LLC 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/ 14
Power Advisory LLC Services 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 15
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 16
Power Advisory LLC Services 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 17