Characteristics of Successful Wind Energy Markets A Developer’s by tuj10580

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									Characteristics of Successful Wind Energy Markets:
A Developer’s Perspective on Lessons for New England




                  TJ Deora
                  Restructuring Roundtable
                  Boston, MA
                  12 June 2009
Horizon Wind Energy is…


      A wind energy leader who
       develops, constructs, owns and
       operates wind farms throughout
       North America
      Owned by EDP Renewables, a
       leading global renewable energy
       company listed on the Lisbon
       Euronext exchange
      Headquartered in Houston with
       over 20 offices across the country
      An employer of over 250 people
      A developer of over 2,800 MW of
       wind farms and operator of over
       2,000 MW of installed capacity
      Ranked third in the U.S. in terms of
       installed capacity in 2008



9 February 2011                               2
…established across the major markets nationwide




9 February 2011                                    3
We manage complex uncertainties to develop projects…

        Project              Turbine                          Financing &       Operations &
                                                EPC
      Development            Supply                            Operation        Maintenance




                                 Interconnection & Transmission
                                 Interconnection & Transmission
                                 • Locating AIC and ATC
                                 • Managing the LGIP
                                 • Securing transmission rights



              Land                      Wind                       Market
              • Met agreements          • Desktop                  • Market
              • Development options       evaluations                forecasting
              • Wind easements          • On-site testing          • Biz Dev
              • Transmission            • Layout                   • PPA negotiations
                easements                 development              • REC marketing


                                 Studies and Permits
                                 • Wildlife studies
                                 • Wetlands
                                 • Cultural and viewshed impacts
                                 • State and local permits
5 June 2008
…as the constraints in the supply chain continue to evolve

                                                                                   Load
              Resourcs &            Turbine                       Trans-
                                                  Financing                       Service
               Projects             Supply                        mission
                                                                                 (Market)



Years                  Constraints                      US Annual Installed Wind Power Capacity
                                                        MegaWatts
   Pre-1999                Market


 1999-2007                 Turbine Supply


2000, „02, „04             Finance: PTC expired


      2008                 Finance: PTC market

                           Finance: capital
   2009-‟10
                             availability

                           Injection and
     2011+
                             transmission capacity

                                                                 Source: AWEA / UCS

5 June 2008
States with the most installed wind capacity…




5 June 2008
…share key characteristics

Installed Wind Capacity      Development Characteristics
30 April 2009
                                                           Market
State         Rank   RTO     Land   Wind   Siting   T&I    Electricity RECs

TX              1    ERCOT

IA              2    MISO

CA              3    CAISO

MN              4    MISO

NY              7    NYISO

CO              8    None




                                                             Least attractive
                                                             Most attractive
5 June 2008
…share key characteristics

Installed Wind Capacity                      Development Characteristics
30 April 2009
                                                                           Market
State         Capacity, MW   Rank   RTO      Land   Wind   Siting   T&I    Electricity RECs

TX            8203             1    ERCOT

IA            2862             2    MISO

CA            2668             3    CAISO

MN            1802             4    MISO

NY            1274             7    NYISO

CO            1068             8    None



New     143                         ISO-NE
England


5 June 2008
   Providers’ responses to growing scarcity of AIC/ATC vary

                      Several merchant lines            CAPX 2020 will bring
BPA’s 2008 open       are proposed to deliver          over 8 GW on line from
season obtained       GWs of wind to CA, NV,            2016-25 courtesy of            • Transmission
                              and AZ                         ratepayers                  providers across
 commitment for                                                                          the country are
     2.8 GW of                                                                           proactively
generator funded                                                            ISO-NE
                                                                                         responding to
                                                MISO                NYISO
   transmission                                                                          the constraints
      service                                                                          • New England
                               WECC
                                                                     PJM                 suffers from high
                   CAISO                                                                 energy prices
                                                                                         but has not
  TRTP will unlock 4.5                          SPP                                      attracted much
                                                                                         investment to
 GW of renewables for
                                                                                         date
SCE from 2009-13 with                        ERCOT                                     • The lack of
ratepayer financing and
                                                             EHV Overlay will            investement in
       generator                                                                         transmission for
    reimbursement            Texas ratepayers will          enable over 13 GW
                                                                                         renewables will
                           fund CREZ, facilitating 18        of wind energy to           excerbate this
                            GW of wind generation               come on line             situation
                               starting in 2013               starting in 2013

                                                                    Source: EER, HWE

   5 June 2008
  Innovation delivery proposals for ISO-NE abound…

                                                                          ILLUSTRATIVE
          High                                                                        Low
                              Green Line

                              1200 MW

                                           NNEWCL

                                           2000 MW

Complexity                                            Irving                                 Cost
                                                      ? MW
                              MPC                                       JCSP
                                                               NESCOE
                              1200 MW                                   ? MW
                                                               ? MW
                  Gen Leads

                  Small
          Low                                                                         High

                 Low                                                           High

                                                     Scope



  5 June 2008
…to deliver the benefits of wind power to ratepayers

Benefit                Capture Strategy

                       • Invest in transmission to unlock low-cost resources
  Low, stable energy
                       • Facilitate imports
         prices
                       • Support long term PPAs


                       • Proactively invest to relieve congestion
      New capacity
                       • Facilitate new generation additions
        resources
                       • Continue to improve forward capacity markets


                       • Facilitate open and transparent REC markets
      Environmental
                       • Support national renewables and carbon policy
         quality


                       • Focus builing on existing comparative advantage
      Economic
   development and     • Develop wind where it is wanted
    energy security    • Ensure generation added from a diverse portfolio of
                         resources

5 June 2008                                                                    11
We have a wide scope of potential solutions…




                                        Source: McKinsey and Company, 2007

5 June 2008
     …but will need to deploy them all to tackle challenge




Figure 1 Idealized emissions. Shown are three idealized CO2 emission paths (a) each consistent with
total cumulative emissions (b) of 1 trillion tonnes of carbon. Varying the timing of emissions alone has
almost no impact on projected temperatures (c) relative to uncertainty in the climate system’s response
(grey shading and red error bar), provided the cumulative total is unaffected (the two blue shaded
regions in a have the same area, as do the green); but the higher and later emissions peak, the faster
they have to decline to stay within the same cumulative budget. Diamonds in c indicate observed
temperatures relative to 1900 -1920
              http://www.nature.com/climate/2009/0905/pdf/climate.2009.38.pdf
     5 June 2008
Key Take Aways


       1. Wind development thrives when reasonable wind resource has open
          access (RTO with injection capacity) to an attractive market.

       2. Transmission is the emerging constraint across the country, and the
          regions that add transmission capacity will “win” investment in wind
          energy.

       3. Given the magnitude of the benefits and need we are facing and the
          timeline we have to act, facilitating all forms of cost effective carbon
          reduction is immediately critical.

                                    Tanuj “TJ” Deora
                            Project Development Manager
                                 Horizon Wind Energy
                              1526 Blake Street, Suite 200
                               Denver, Colorado 80207
                                      303.568.1700
                                      303.718.7244
                            tanuj.deora@horizonwind.com
5 June 2008
For More Information…

•    WECC:
      1. Wind development thrives when reasonable wind resource has open
      – BPA Open Season: http://www.transmission.bpa.gov/customer_forums/open_season/default.cfm
              access (RTO with injection capacity) to an attractive market.
•    MISO:
      – CapX2020: http://www.capx2020.com/faq.html#1
      2. Transmission is the emerging constraint across the country, and the
•        regions that add transmission capacity will “win” investment in wind
     ERCOT:
      – CREZ:
         energy.
              http://www.puc.state.tx.us/about/commissioners/smitherman/present/pp/Sen_Fraser_CREZ_100308.p
              df
       –
       3.     http://www.ercot.com/news/presentations/2006/ATTCH_A_CREZ_Analysis_Report.pdf
              Given the magnitude of the benefits and need we are facing and the
              timeline we have to act, facilitating all forms of cost effective carbon
•    SPP:
          reduction is immediately critical.
      – EHV: http://www.spp.org/publications/spp_ehv_study_final_report.pdf

•    Regional Plans:
      – JCSP: http://graphics8.nytimes.com/images/blogs/greeninc/jointplan.pdf
      – WGA: http://www.westgov.org/wga/initiatives/wrez/

•    National Perspective:
      – Emerging Energy Research’s Market Brief: “Transmission Initiatives Adapt to US Wind Growth.” 7
          January 2009
      – American Wind Energy Association: www.awea.org
      – US Department of Energy: “20% Wind by 2030.” www.20percentwind.org



5 June 2008

								
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