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

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
poweradvisoryllc.com
Tel: 978 369-2465

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
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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
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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
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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
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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”
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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
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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)
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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
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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
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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
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12. Thank you for your attention
John Dalton
Power Advisory LLC
jdalton@poweradvisoryllc.com
(978) 369-2465
www.poweradvisoryllc.com
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13. Introducing Power Advisory
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procurement, policy development, regulatory and litigation support, resource
planning and project feasibility assessment.
 We offer clients insightful analyses based on detailed understanding of
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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
jdalton@poweradvisoryllc.com
978-369-2465
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14. Introducing Power Advisory
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