PRELIMINARY IRP RESULTS Presentation to External Stakeholder 1/29/2013 1
Short-term Recommendation Retire 104.5 of capacity between 2015 and 2018 Steam (40) Dec. 31 2015 GT02 (13) Dec. 31 2016 LSDa(51.5) Dec. 31 2018 Specific DSM programs to be identified Install the following generating capacity by 2019: 70 60 1.5 10 Capacity Required () 50 40 30 20 10 0 60 34 25 1.5 2 2016 2017 2018 2019 Biomass Landfill gas-to-energy Wind Reciprocating Engines 2
Conditions The recommendations are contingent on: Acquiring land access for the development of a wind farm and/or successfully negotiating Power Purchase Agreements with IPPs for wind energy Access to a secure supply of biomass and landfill gas at the prices used in the IRP Extension of BL&P s franchise which currently expires in 2028 FTC approval of the IRP Compliance with legislative requirements 3
Utility Scale Solar PV Utility scale solar PV is not selected in the optimum plan at an overnight build cost of $7,000 / KW. Based on current assumptions, utility scale solar is selected in the optimal plan at an overnight build cost below $5,500 /kw. Distributed solar PV is currently being facilitated under BL&P s RE Rider 4
Acronyms CCGT30 30 Liquid-fueled Combined Cycle Gas Turbine GT20 20 Liquid-fueled Gas Turbine LSD17 17 Low Speed Diesel MSD17 17 Medium Speed Diesel NG-LSD17 17 Natural gas dual-fired LSD NG-MSD17 17 Natural gas dual-fired MSD NG-CCGT30 30 Natural gas fired CCGT NG-GT20 20 Natural gas fired GT Land.Gas Landfill gas-to-energy Ana.digest Anaerobic Digester Wind w/storage Wind energy with 10% battery storage LF Liquid Fuels, i.e. heavy fuel oil, diesel & Jet A1 NG Natural Gas RE Renewable Energy 5
Decision Hierarchy Goal Optimum Expansion Plan World Demand Growth 1. High (3.7%); 2. Base (1.3%); 3. Low (-0.4%) Criteria NPV Fuel Diversity Env. Impact Achievability Gas Int. Cost For.Ex. Impact CO2 Water Use Land Use Scenarios/ Alternatives Scenarios 1. LF+RE; 2. LF+RE+NG; 3. LF+RE+NGr; 4. LF+REf+NGr 6
IRP Decision Analysis Overview Define the set of alternatives to be ranked 12 Alternative Least-cost Plans: 3 demand worlds x 4 fuel mix scenarios Define criteriaused to evaluate and rank the alternatives NPV, Fuel Diversity, ForEx, CO2, Water, Land Use, Achievability, Gas Interruption Cost Scoreeach criteria for each alternative Criteria Achievement Table Review criteria weightsand preferences Convert measures to common units ( utility ) Define relative importance of the criteria Rankalternatives and select best option Rank alternatives according to overall score Review effect of uncertainty on ranking results 7
Worlds & Scenarios 3 worlds defined based on electricity demand High Demand (3.7% avg. annual growth) Base Demand (1.3% avg. annual growth) Low Demand (-0.4% avg. annual growth) 4 scenarios evaluated in each world: Scenario 1: LF+RE Scenario 2: LF+RE+NG Scenario 3: LF+RE+NGres. Scenario 4: LF+REfor.+NGres. 1 Liquid Fuel (LF) Natural Gas (NG) x Renewable Energy (RE) Gas Turbines 2 x x Notes 1. In this scenario the model is forced to install 29% RE by 2029 2. NGres. -Gas turbines excluded in scenarios 3 & 4 due to high gas interruption cost 8
Demand Worlds 9
Demand Worlds DSM and Distributed RE evaluation 10
Key Assumptions Economic Assumptions All cost estimates in real 2012 BDS $ Real Discount Rate: 7% Low 6% High 8% Currency and exchange rates: 1 US$ = 2.0 BDS $ 1 GB = 3.5 BDS $ Economic growth rate is projected to average 2.4% over forecast period High Case 3.4% Low Case 1.4% Local tax levies and duties not included System Assumptions Minimum Reserve Margin: 32% 24 hours per year LOLP Minimum Generation Spinning Reserve: 5 Largest generating unit: 20% projected peak demand Maximum Intermittent RE: 10% projected peak demand Fuel Price Base Case Projections for 2016 (WTI crude oil price @BBD$218/bbl) Diesel: $49 per mmbtu HFO: $38 per mmbtu Nat. Gas: $28 per mmbtu ($16 fixed + $12 variable; 22 mmcfd) Biomass: $9 per mmbtu 11
Key Assumptions (cont d) Candidate Plant Liquid Cap. Cost BBD$/kW Fixed O&M BBD$/kW/Year Var O&M BBD$/h LSD17 2,853 115.00 12.00 MSD17 2,344 165.00 18.00 LSD30 2,853 110.00 12.00 GT20 2,261 26.00 80.00 CCGT30 3,698 110.00 10.00 Nat Gas NG-LSD17 3,261 115.00 12.00 NG-MSD17 2,649 165.00 18.00 NG-LSD30 3,261 110.00 11.00 NG-GT20 2,269 11.00 43.00 NG-CCGT30 3,129 110.00 10.00 Renewables Anaerobic Digestion 15,000 900.00 Biomass 8,500 250.00 15.00 Landfill Gas 6,000 800.00 Solar 7,000 65.00 Waste to Energy 21,500 1,050.00 17.50 Wind 6,000 105.00 Wind with Storage 8,452 170.00 12
Year Net Present Value Analysis (sample) Capital Expenditure Bds $'000 Rciprocating Engines Gas Turbines Renewables Total Capex Fuel Operating Cost Bds $ '000 HFO Diesel Jet A1 Biomass Fixed Variable Total Operating Cost Total Cost Bds $'000 2012 - - - - 332,216 26,462 38-358,717 26,128 23,249 408,094 766,811 2013 - - - - 292,329 22,476 - - 314,805 26,057 22,599 363,461 678,267 2014 - - - - 314,734 24,603 - - 339,336 26,057 22,828 388,221 727,557 2015 - - - - 330,850 27,214 - - 358,064 26,057 23,249 407,370 765,434 2016 204,972-77,614 282,586 280,360 3,498 - - 283,858 26,132 14,421 324,411 890,856 2017 - - 23,622 23,622 284,277 3,483 - - 287,760 26,730 14,316 328,806 640,188 2018 - - 240,725 240,725 243,815 10-17,668 261,493 32,980 12,890 307,363 809,582 2019 120,914 - - 120,914 246,708 615-17,842 265,165 28,947 12,011 306,122 692,201 2020 - - - - 252,398 943-18,108 271,449 29,026 12,186 312,661 584,110 2021 - - - - 258,511 1,349-18,237 278,097 28,947 12,400 319,444 597,542 2022 - - - - 267,238 2,147-18,441 287,825 28,412 12,700 328,937 616,763 2023 - - - - 274,897 3,404-18,592 296,893 28,412 13,093 338,398 635,291 2024 - - - - 281,978 5,210-18,802 305,990 28,490 13,605 348,085 654,075 2025 60,457 - - 60,457 293,343 377-18,888 312,608 30,349 13,209 356,166 729,231 2026-62,372-62,372 300,968 828-19,019 320,815 31,155 13,555 365,525 748,712 2027 - - - - 308,090 1,788-19,142 329,020 30,941 13,981 373,942 702,961 2028-62,372-62,372 318,607 3,498-19,351 341,456 31,620 14,527 387,603 791,431 2029 - - - - 327,975 6,143-19,525 353,643 31,534 15,201 400,378 754,021 2030 60,457 - - 60,457 340,919 762-19,733 361,414 33,684 14,941 410,039 831,910 2031 - - - - 350,559 1,882-19,925 372,366 33,684 15,412 421,462 793,828 2032 - - 19,471 19,471 356,113 3,094-20,175 379,382 34,905 15,803 430,090 828,943 2033 - - 19,471 19,471 357,583 4,630-20,283 382,495 35,934 16,212 434,641 836,607 2034 60,457 - - 60,457 370,417 392-20,488 391,298 38,085 16,046 445,428 897,183 2035 - - - - 380,058 807-20,658 401,523 38,085 16,341 455,949 857,472 2036 162,943-43,869 206,812 391,849 3,765-20,895 416,509 36,711 17,515 470,735 1,094,055 NPV 7% 467,829 3,496,554 103,680 36 130,232 3,730,501 340,344 192,392 4,263,237 4,731,065 Total Fuel O&M 13
NPV Results & Sensitivity Analysis 14
Evaluation Criteria Net Present Value (NPV) Foreign Exchange Impact CO2 produced Water Use Land Use Fuel Diversity Measure of how evenly distributed liquid fuels, natural gas, biomassandresourcesareinenergymix Gas Interruption Cost Fuel cost impact of a one year interruption in natural gas supply Achievability of plan Measure of the ability and capacity to implement plan, e.g. plans that are dependent on large numbers of participants and agreements score lower 15
Criteria Achievement Table Worlds Scenarios NPV ($000) Base High Low Foreign Exchange ($000) Achievability 2017 Gas Interruption Cost ($000) C02 (million Water (million Land Use Fuel MT) Ga) (acres) Diversity LQ + RE 4,718,007 17,874 2,736 552 34.30% 4,192,718 High LQ + RE + NG 4,003,169 13,513 4,475 385 37.28% 3,696,372 Medium 102,410 LQ + RE + NGr 4,242,772 15,019 978 66 59.78% 3,856,238 Medium 59,236 LQ + REf + NGr 4,539,107 12,614 2,948 1,026 71.95% 3,928,066 Low 43,345 LQ + RE 6,533,100 27,677 2,885 583 26.85% 5,906,882 High LQ + RE + NG 5,370,996 13,847 6,471 767 65.90% 4,721,986 Medium LQ + RE + NGr 5,647,944 24,273 1,952 773 67.10% 5,084,604 Medium LQ + REf + NGr 6,009,076 20,751 4,646 1,045 75.58% 4,987,311 Low LQ + RE 3,743,509 12,674 2,633 537 43.16% 3,263,432 High LQ + RE + NG 3,527,547 10,785 3,066 14 43.87% 3,267,055 Medium LQ + RE + NGr 3,691,844 11,428 837 34 48.14% 3,370,626 Medium LQ + REf + NGr 3,890,652 9,506 2,735 196 74.13% 3,372,432 Low 16
Ranking of Scenarios 17
2016 LevelisedGenerator BusbarCosts 18
Recommended Plan Gas is currently unavailable. The timeline for its availability remains uncertain. Short-term expansion based on the second ranked scenario ( Liquid Fuel + Renewable Energy ) is therefore recommended with the following adjustments: Biomass is an attractive opportunity at the prices modeled. However, the organisation of the many stakeholders and project components is likely to take more than 3 years. In addition to the 47 selected in 2016 in the Liquid Fuel + RE plan, an additional 13 of reciprocating capacity is recommended, with biomass plant installation by 2018. The conventional generating units installed in the Liquid Fuel + Renewable Energy scenario will be capable of conversion to gas operation when gas becomes available. NPV of recommended plan: $4.731 Billion 19
IRP Plans for Base World Year GWh Retirement Sched. 2012 975 2013 962 2014 966 2015 973 S1, S2 40 RECOMMENDED PLAN Liquid + RE Gas Gas (restricted) High RE 2016 981 GT02 13 LSD30 2 x 30 L/fill Gas 1 x 1.5 Wind 10 x 1 2017 990 L/fill Gas 1 x 1.5 Wind 2 x 1 2018 1,000 D10, D11, D12, Biomass 1 x 25 D13 50 WH01 1.5 LSD30 1 x 30 LSD17 1 x 17 Biomass 1 x 25 L/fill Gas 1 x 1.5 Wind 10 x 1 L/fill Gas 1 x 1.5 Wind 2 x 1 2019 1,010 LSD17 2 x 17 LSD30 1 x 30 NG-CCGT30 3 x 30 NG-GT30 1 x 30 NG-LSD30 2 x 30 NG-MSD17 3 x 17 NG-LSD30 1 x 30 NG-MSD17 3 x 17 NG-LSD17 1 x 17 Biomass 1 x 25 2020 1,021 LSD17 1 x 17 NG-LSD17 1 x 17 2021 1,034 GT03 13 Wind 6 x 1 L/fill Gas Gas 1 x 1.5 2022 1,049 Wind 10 x 1 L/fill Gas Gas 1 x 1.5 2023 1,066 Wind 1 x 1 20
Year GWh Retirement Sched. RECOMMENDED PLAN Liquid + RE Gas Gas (restricted) High RE 2024 1,085 GT04 20 Wind 1 x 1 2025 1,108 GT05 20 LSD17 1 x 17 LSD17 1 x 17 NG-CCGT30 1 x 30 NG-MSD17 1 x 17 L/fill Gas 1 x 1.5 LSD17 1 x 17 Ana. digestion 1 x 1.25 2026 1,134 GT06 20 GT30 1 x 30 GT30 1 x 30 L/fill Gas 1 x 1.5 NG-MSD17 1 x 17 Wind 1 x 1 2027 1,159 GT30 1 x 30 GT30 1 x 30 NG-GT30 1 x 30 LSD30 1 x 30 LSD17 1 x 17 Wind 2 x 1 2028 1,187 GT30 1 x 30 LSD17 1 x 17 LSD17 1 x 17 Solar 3 x 1 Ana. digestion 1 x 1.25 2029 1,216 NG-LSD17 1 x 17 Wind 3 x 1 Solar 10 x 1 Waste to Energy 1 x 13.5 2030 1,245 LSD17 1 x 17 LSD17 1 x 17 Solar 2 x 1 Imp Biomass 1 x 25 2031 1,273 Solar 1 x 1 2032 1,301 Ana. Digestion 1 x Ana. Digestion 1 x NG-CCGT40 1 x 40 NG-MSD17 1 x 17 1.25 1.25 2033 1,327 Ana. Digestion 1 x 1.25 Ana. Digestion 1 x 1.25 L/fill Gas 1 x 1.5 2034 1,350 LSD17 1 x 17 LSD17 1 x 17 L/fill Gas 1 x 1.5 2035 1,370 D14, D15 60 Retire Retire Wind 7 x 1 Ana. digestion 1 x 1.25 Wind 10 x 1 Wind 10 x 1 WH02 2.2 L/fill Gas 1 x 1.5 L/fill Gas 1 x 1.5 Wind w/storage 1 x 1 2036 1,388 LSD30 1 x 30 LSD17 1 x 17 Wind 5 x 1 L/fill Gas 1 x 1.5 LSD30 1 x 30 LSD17 1 x 17 Wind 5 x 1 L/fill Gas 1 x 1.5 NG-CCGT40 1 x 40 Wind 5 x 1 NG-LSD30 2 x 30 Solar 1 x 1 Solar 1 x 1 Solar 1 x 1 NG-LSD30 2 x 30 21
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 1600 1400 1200 1000 800 600 400 200 0 Generation by Energy Source for Recommended Plan Year Anearobic Digestion Landfill Gas Wind Biomass New Gas Turbines New LSD & MSD Gas Turbine Cogen LSD Steam 22 Energy (GWh)
Generation Energy Source by Plan -2036 100 90 80 70 60 50 40 30 20 10 Anearobic Digestion Wind Landfill Gas Solar Waste to Energy Imp Biomass Biomass New GT & CCGT New LSD & MSD - Recommended Liquid + RE Gas Gas (restricted) High RE Liquid + RE Gas Gas (restricted) High RE Liquid + RE Gas Gas (restricted) High RE % of net generation 23 Base High Low
1.4 1.2 System Reliability LOLE (%) LOLE Target Capacity Reserve Margin (%) 70 60 1 50 LOLE (%) 0.8 0.6 0.4 40 30 20 Capacity Reserve Margin (%) 0.2 10 0 0 Year 24
Next Steps Submission of stakeholder comments Feb. 12 th 2013 Complete and submit IRP report to FTC for approval Q1 2013 Issue final IRP report to stakeholders Q1 2013 Complete DSM and Intermittent RE Penetration Studies - Q4 2013 25