GETTING THE WIND TO MARKET: KEY TO SUCCESS. IDAHO WIND WORKING GROUP Boise, Idaho September 22, 2010

Transcription

1 GETTING THE WIND TO MARKET: KEY TO SUCCESS IDAHO WIND WORKING GROUP Boise, Idaho September 22, 2010

2 Ridgeline started in 2000 Developed 65 MW Wolverine Creek Wind Farm E of Idaho Falls. Power Purchase Agreement with Pacificorp/Rocky Mountain Power Built 125 GNII Summer % joint venture with BP Wind. Power Purchase Agreement with Southern California Edison. Rockland Wind Farm: 80 MW PURPA project south of American Falls. Power Purchase Agreement with Idaho Power presently under consideration at Idaho Public Utilities 200 MW project South of Laramie likely next project to see construction Now Ridgeline is wholly owned by Veolia Environmental Headquartered in Seattle with Offices in Boise, Portland, Idaho Falls, Spokane and Albany, NY. PingreeMiddle School Field trip to Wolverine Creek Wind Farm 2

3 Where is Wind Development Today?

4 20,000 MW is a lot of Energy The Idaho Department of Water Resources (Now OER), along with engineers at the Idaho National Laboratory and the Department of Energy s National Renewable Energy Lab put Idaho s potential at 20,000 MW. 2,000 MW is easily developable low-hanging fruit. 5,000 MW is achievable within 10 years. Ancillary opportunity follows development at that level, just ask the mayor of Sweetwater, Texas.

5 US WIND DEVELOPMENT State Yr End 2002 End 2003 End 2005 End 2006 End 2007 end 2008 end 2009 Rank Wind Rank RPS Total U.S. 3,769 6,325 9,086 11,476 16,812 25,170 34,644 Texas 1,096 1,290 1,992 2,739 4,353 7,113 9,403 (1) 1 2 YES Iowa ,273 2,790 3,604 (2) 2 10 YES California 1,823 2,025 2,149 2,376 2,439 2,537 2,798 (3) 3 17 YES Washington ,163 1,375 1,849 (5) 4 24 YES Minnesota ,300 1,752 1,810 (4) 5 9 YES Oregon ,067 1,758 (7) 6 23 YES Illinois ,547 (9) 7 16 YES New York ,274 (10) 8 15 YES Colorado ,067 1,068 1,244 (6) 9 11 YES North Dakota ,203 (11) 10 1 YES Wyoming ,099 (13) 11 7 Indiana ,036 (23) 12 6 Oklahoma ,031 (12) 13 8 YES Kansas ,021 (8) 14 3 YES Pennsylvania (16) YES New Mexico (14) YES Wisconsin (15) YES Montana (18) 18 5 YES West Virginia (17) YES South Dakota (19) 20 4 YES Missouri (20) YES utah (26) 22 35* YES Maine (25) YES Idaho (22) nebraska (24) 25 6 Michigan (21) YES Source: NREL, Sept 2010

6 WESTERN US WIND DEVELOPMENT State Yr End 2002 End 2003 End 2005 End 2006 End 2007 end 2008 end 2009 Rank Wind Rank RPS California 1,823 2,025 2,149 2,376 2,439 2,537 2,798 (3) 3 17YES Washington ,163 1,375 1,849 (5) 4 24YES Oregon ,067 1,758 (7) 6 23YES Colorado ,067 1,068 1,244 (6) 9 11YES North Dakota ,203 (11) 10 1YES Wyoming ,099 (13) 11 7 New Mexico (14) 16 12YES Montana (18) 18 5YES South Dakota (19) 20 4YES Utah (26) 22 35* YES Idaho (22) Source: NREL, Sept 2010

7 Idaho Wind Energy Growth From 0.3 Megawatts to 544 Megawatts in Five Years (Megawatts) Energy Added Existing Year of First Commercial Operation 7

8 Renewable Energy Capital Investment 180 $1, Investment (in $ Millions) $1, $1, $1, $ $ $ , Added Existing $ $ Dollars. Value: $2.4M/MW

9 What Are Our Energy Needs? How Does Wind Fit Within the System?

10 HISTORICAL PROSPECTIVE 1945 IPCoPeak Load exceeds 100 MW Federal Power Commission okays IPColicense for Brownlee, Oxbow and Hells Canyon power plants IPCoexceeds 1,000 MW Hells Canyon Complex Completed: 1,166.5 Megawatts HYDRO Nameplate MW MW American Falls Bliss..75 Brownlee C.J.Strike Cascade Clear Lake 2.5 Hells Canyon Lower Malad Lower Salmon...60 Milner Oxbow..190 Oxbow..190 Shoshone Falls Swan Falls Thousand Springs 8.8 Twin Falls Upper Malad..8.3 Upper Salmon COAL Boardman North Valmy NATURAL GAS Bennett Mountain DIESEL Salmon 5 Jim Bridger Evander Andrews

11 Idaho Total Electricity Use , ,299 3,133 Rocky Moutain Idaho Power ,018 1,745 Avista ,030 1,763 1, Minimum Average Peak Source: Avista; IPCo; Rocky Mountain #s.

12 The Bonneville Power Administration Transmission System: Operating voltage Circuit miles 1,000 kv kv... 4, kv kv kv... 5, kv kv kv ,557 below 115 kv Total ,238 Miles. All-time 60-min. total peak generation record (June 2002) ,139 MW Federal Hydro Projects By Name, River, State, In-service Date, Nameplate Rating AlbeniFalls, Pend Oreille, ID MW Anderson Ranch, Boise, ID MW Big Cliff, Santiam, OR MW Black Canyon, Payette, ID MW Boise River Diversion, Boise, ID MW Bonneville, Columbia, OR/WA ,077 MW Chandler, Yakima, WA MW Chief Joseph, Columbia, WA ,458 MW Cougar, McKenzie, OR MW Detroit, Santiam, OR MW Dexter, Willamette, OR MW Dworshak, Clearwater, ID MW Foster,Santiam, OR MW Grand Coulee, Columbia, WA ,765MW Green Peter, Santiam, OR MW Green Springs, Emigrant Crk, OR MW Hills Creek Willamette, OR MW Hungry Horse, Flathead, MT MW Ice Harbor Snake, WA MW John Day, Columbia, OR/WA ,160 MW Libby Kootenai, MT MW Little Goose, Snake, WA MW Lookout Point, Willamette, OR MW Lost Creek, Rogue, OR MW Lower Granite, Snake, WA MW Lower Monumental, Snake, WA MW McNary, Columbia, OR/WA MW Minidoka, Snake, ID MW Palisades, Snake, ID MW Roza,Yakima, WA MW The Dalles, Columbia, OR/WA ,808 MW Total (31 dams) 20,430 MW Owned and operated by the U.S. Army Corps of Engineers (21 dams, 12,940 MW) Owned and operated by the Bureau of Reclamation (10 dams, 7,490 MW).

13 BPA: Wind Saturated? What Did the Wind Industry Choose? 2010: 3,000 MW Wind 2013: 6,000 MW Wind Spring Night load: <4,000 MW

14 The Market: California California imports more electricity than any other State. In-State Generation Capacity: 16,861 thousand MW (4.5% of US total Generation) Imports: 7,925 thousand MW (2.2% of US Total Gen.) California Energy Commission (CEC) data for 2008: in-state generation of billion kwh net imports of 98 billion kwh TWhTOTAL, 14.44% of this nuclear, 18.21% coal, 45.74% natural gas, 11.0% large hydro and 10.61% other renewables. apart from some impressive wind farms, hardly any generating capacity had been built in California in the 20 years to 2000 despite almost 2% annual growth in demand. The majority of California's generating plants are older than 35 years (the two largest gas-fired plants were 45 years old),. But what are CA REC policies today? A week from Now? A Year? Bundled? Tradable?

15 THE TRANSMISSION CUNUNDRUM

16 Merchant Transmission: Dead or Alive Frontier CA, NV, UT and WY Governors (dead) TransWest Arizona Public Service (on hold or dead) Northern Lights - Trans-Canada (on hold) SWIP (Southwest Intertie Project) LS Power o Overland Transmission Project Jade Energy (E Wyoming to Midpoint,ID) o Great Basin TxLLC (Midpoint, ID to Las Vegas, NV) o Wyoming Colorado Intertie LS Power (E WY to N CO) SHOW ME THE MONEY!

17 Pending Proposed Transmission New Construction/Upgrades 1. Boardman-Hemingway 500 kv (B2H) 2. Canada Northern California Transmission Project AvistaCorporation 500/230 kv AC 3. Canada/Pacific Northwest-Northern California 4. Central California Clean Energy Transmission Project (C3ETP) 5. Devers-Palo Verde No kv Transmission Line Project 6. Ely Energy Center Project (Robinson Summit to Harry Allen 500 kv line) 7. Gateway Central Project Mona -Oquirrh 500 kv transmission line 8. Gateway Central Project Populus-Terminal 345 kv double circuit transmission line 9. Gateway Central Project, Sigurd- Red Butte - Crystal 345 kv Line 10. Gateway South Project Segment #1 (Mona-Crystal 500 kv) 11. Gateway South Project Segment #2 (Aeolus-Mona kv) 12. Gateway West Transmission Project Segment 1A Windstar to Jim Bridger 500 kv 13. Gateway West Segment 1B Jim Bridger to SE Idaho (Bridger-Populus double circuit 500 kv) 14. Gateway West Segment 1C Southeast Idaho South Central Idaho (Populus Midpoint 500 kv) 15. Gateway West Segment E South to Southwest Idaho (Midpoint Hemingway 500 kv) 16. Green Path North Project (also known as Indian Hills Upland Project) 17. Harcuvar Transmission Project 18. Hemingway-Captain Jack 500 kv Transmission Line 19. High Plains Express Transmission Project 20. Hughes Transmission Project:(a) Juan de Fuca HVDC Sea Cable; (b) Juan de Fuca II HVDC Cable 21. Lake Elsinore Advanced Pumped Storage (Talega-Escondido / Valley-Serrano 500 kv line) 22. Montana Alberta Tie Project 23. Mountain States Transmission Intertie (MISTI) (Townsend-Midpoint 500 kv) 24. Navajo Transmission Project Segment #1(Four Corners - Marketplace 500 kv

18 Pending Proposed Transmission New Construction/Upgrades 25. Northern Lights Celilo HVDC Project 26. Northern Lights Zephyr (WY-NV) HVDC Project 27. Palo Verde Hub-North Gila 500kV #2 line 28. Path 27 Upgrade ( Intermountain DC Line) 29. Path 3 Northwest to British Columbia South to North Rating Increase 30. Path 54 Upgrades 31. Path 55 Brownlee East Increase to 1915 MW 32. San Francisco Bay Area Bulk Transmission Reinforcement 33. Southern Crossing 34. Southern Navajo (Path 51) Upgrade Project 35. Southwest Washington / Northwest Oregon 500 kv Reinforcement 36. Sunrise Power Link 37. SunZiaSouthwest Transmission Project 38. SWIP North Transmission Project (Midpoint Thirtymile 500 kv Line 39. SWIP South Transmission Project (Robinson Summit Las Vegas area 500 kv) 40. TOT3 300 MW Upgrade Project 41. TOT3 Upgrade Project Miracle Mile Ault Upgrade 42. TransWest Express Project 43. Triton HVDC Sea Cable Project 44. Walla Walla to McNary 230 kv 45. West Coast Cable Project 46. West of McNary Generation Integration Project (WOMGIP) 47. Wyodak South 230 kv line 48. Wyoming-Colorado Intertie Project

19 Present Transmission Picture Orange: >500 kv DC Red: 500kV Green: kv Blue: kv: What s the problem: lines are all over the place.

20 Path Constraints

21 IS THERE A SAFE PATH FORWARD?

22 Solutions Is this actually a presidential election map?

23 IF IT WORKS THERE, WHY NOT HERE? RTOs (Regional Transmission Organizations) ISOs (Independent System Operators) Cal ISO is a 501(c)(3) ERCOT moves wind to market at negative pricing Even New York has a transmission ISO They work all around the country, can they work here? Grid West, RTO West 8 years of effort but couldn t reach consensus on governance & structure

24 IS THERE A WAY FORWARD? Merchant TX is risky: high cost of capital; no PUC ability to rate base Regional efforts remain too complex Small fixes: IPCo/PAC; IPCo/Sierra- Nevada; IPCoor PAC/Northwestern Energy (Montana) Bridge Gaps

25 HOW SHOULD WE FINANCE IT? In 1955, 10 years after it broke 100 MW of load for the first time, IPCo began the process of building nearly 1,200 MW. A gamble at the time proved a brilliant move. We still benefit today Apply this to transmission. Grab the low hanging fruit: bridge constraints, build interties Partner with neighboring IOUs Share the cost Build what s needed Build an additional 50% (or 20 years) on top as merchant-light Sell excess capacity to wind developers until the IOU needs it to meet its own load When ratepayers need it, it will already be there Ratebase the whole thing, but share profits from overbuild

26 Alleviate wind saturation Develop export market access Sustained rural economic development Offset coal generation De Facto balancing area increase system stability De Facto RTO/ISO Watch the money roll in What are the Goals?

27 Rich Rayhill, Vice President Ridgeline Energy, LLC 720 W Idaho #39 Boise, ID (208) rrayhill@rl-en.com