Maritimes Wind Exports to New England


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Review of Opportunities and Barriers to Wind Power Exports from the Maritimes to New England

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Maritimes Wind Exports to New England

  1. 1. CanWEA 2009: Infinite Possibilities Evaluation of Opportunities and Barriers to Wind Power Exports from the Maritime Provinces to the US Northeast September 21, 2009 John Dalton Tel: 978 369-2465
  2. 2. Overview of Presentation  Maritimes wind power potential  New England’s need for renewable energy  Renewable Portfolio Standard demand  Attempting to develop its resource potential  Value of renewable energy in New England  Transmission barriers to exports  Existing infrastructure  Rate pancaking  Addressing transmission barriers  Integrating electricity systems  Eliminating rate pancaking  Building additional transmission 2 Power Advisory LLC 2009 All Rights Reserved
  3. 3. Significant wind power potential in the Maritime Provinces  5,500 to 7,500 MW of wind economic in Maritimes  Greater than load in region for many hours  Indicating a need to export  Current system can integrate about 2,100 MW without major upgrades  Integrating more wind power requires:  Upgrades of transmission within and between provinces  Increased transmission capacity for exports of wind  Better coordination among system operators 3 Power Advisory LLC 2009 All Rights Reserved
  4. 4. New England likely to need additional renewable energy  Lack of fuel diversity and GHG constraints causing region to seek lower cost, non-carbon generation  New England renewable energy demand driven by Renewable Portfolio Standards (RPS)  Regional Greenhouse Gas Initiative  Federal CO2 Cap and Trade increasingly likely  RPS require growing fraction of electricity supplied come from renewable resources  Most RPS programs use Renewable Energy Certificates (REC)  Wind power from Maritimes can participate in RPS if power also delivered Power Advisory LLC 2008 All Rights Reserved 4
  5. 5. New England demand increases given RPS requirements  The RPS requirements are expressed in energy, but converted to a renewable capacity requirement (Blue Line) Demand for Class I Renewable Energy Resources in New England Capacity Requirement assumes that 5 60% of the capacity is provided by resources with a Power Advisory LLC 2009 capacity factor of 34% (e.g., wind) and that 40% is provided by resources with a capacity All Rights Reserved factor of 80%.
  6. 6. New England attempting to develop its resource potential  Constraints on renewable resource availability and siting limiting ability of local renewables to meet RPS  Massachusetts RPS had its first surplus in 2007  States are addressing supply constraints  Massachusetts: One Stop Permitting  Maine: Designating areas for wind project development  New England Governors’ Conference recently released a Renewable Energy Blueprint  More than 10,000 MW of wind potential in region  “Each state seeking aggressive development of potential” Power Advisory LLC 2008 All Rights Reserved 6
  7. 7. Renewable energy values depends on market conditions  Value of wind power in New England from Maritimes = REC value + energy value in market  REC Ceiling value: alternative compliance payment  Electricity supplier penalty if not enough RECs ($61/REC in 2009)  Value of energy in New England depends on natural gas prices  $35/MWh (August 2009)  $78/MWh (August 2008)  Floor value of RECs cost of renewable generation needed to meet RPS  Estimated to be about $98 per MWh in 2010  All US$ 7 Power Advisory LLC 2009 All Rights Reserved
  8. 8. Exports from Maritimes likely to go through New Brunswick Québec P.E.I Peak Load: 37,230 Peak Load: 205 Installed Capacity: 38,236* Installed Capacity: 125 720 MW (NB–>QC) 222 MW (NB–>PEI) 1,000 MW (QC–>NB) 124 MW (PEI–>NB) *Excludes 5,428 MW of Churchill Falls capacity New Brunswick Peak Load: 3,000 Installed Capacity: 4,266 N. Maine Peak Load: 120 Installed Capacity: 130 115 MW (NB–>NME) 105 MW (NME–>NB) Nova Scotia Peak Load: 2,261 Installed Capacity: 2,293 New England 300 MW (NB–>NS) Peak Load: 27,993 350 MW (NS–>NB) Installed Capacity: 34,204 1,000 MW (NB–>NE) 550 MW (NE–>NB) Power Advisory LLC 2009 All Rights Reserved
  9. 9. Transmission key market barrier to additional exports  If not originating in New Brunswick, exports pay two transmission tariffs  One in province of origin and in New Brunswick  This is rate pancaking  Analysis suggests exports economic only if one tariff paid  Transfer capacity from New Brunswick to New England limited and under long-term reservations  Capacity often available on a short-term (daily) basis  Proposed New England transmission projects would increase transfer capacity  Maine Power Reliability Project by 400 MW 9 Power Advisory LLC 2009 All Rights Reserved
  10. 10. Strategies to address transmission barriers  System operators should pursue further opportunities for integration and coordination of systems to allow increased electricity interchanges  Allowing more wind or reducing costs of integrating wind  Need to eliminate rate pancaking by adopting uniform transmission tariff in the Maritimes  Would result in cost shifting  Could be part of broader plan that includes transmission investment Power Advisory LLC 2009 10 All Rights Reserved
  11. 11. Strategies to address transmission barriers (cont’d)  Build additional transmission to enable additional wind generation for export  Analysis suggests that ISO-NE market prices need to increase to support transmission investment  Unless costs of facilities are shared with other customers based on broad societal benefits of wind Power Advisory LLC 2009 11 All Rights Reserved
  12. 12. Thank you for your attention John Dalton Power Advisory LLC (978) 369-2465 Power Advisory LLC 2009 All Rights Reserved 12
  13. 13. Introducing Power Advisory  Power Advisory specializes in electricity market analysis and strategy, power procurement, policy development, regulatory and litigation support, resource planning and project feasibility assessment.  We offer clients insightful analyses based on detailed understanding of market fundamentals and sources of competitive advantage.  We have extensive experience with renewable energy technologies, having assisted Ontario develop its Standard Offer and Feed-in Tariff Programs and advised numerous clients on renewable energy investment opportunities. For additional information regarding our services, please contact: John Dalton 978-369-2465 Power Advisory LLC 2009 All Rights Reserved
  14. 14. Introducing Power Advisory  Clients include:  Algonquin Power  Atlantic Power  Bluewater Power Generation  Bruce Power  Canadian Wind Energy Association  Connecticut Resources Recovery Authority  Great Lakes Power  Manitoba Hydro  National Energy Board  Natural Resources Canada  Northland Power  New Jersey Resources  Ontario Energy Board  Ontario Power Authority  Suncor  TransAlta  TransCanada  Vermont Public Service Board  Wheelabrator Technologies, Inc. Power Advisory LLC 2009 All Rights Reserved