Ne w T ra nsmissio n, Ca rb o n, a nd F inding a Pa th F o rwa - PowerPoint PPT Presentation

Ne w T ra nsmissio n, Ca rb o n, a nd F inding a Pa th F o rwa rd E L PC April 2010

Who is Cle a n L ine E ne rg y Pa rtne rs? � Cle a n L ine E ne rg y Pa rtne rs (Cle a n L ine ) is a pro je c t de ve lo pme nt c o mpa ny fo c use d o n d e ve lo ping lo ng ha ul, hig h vo lta g e dire c t c urre nt (HVDC) tra nsmissio n line s a c ro ss the US c o nne c ting the b e st re ne wa b le re so urc e s in the c o untry with lo a d � Cle a n L ine E ne rg y Pa rtne rs ha s fina nc ia l b a c king fro m ZBI Ve nture s (a sub sidia ry o f Ziff Bro the rs I nve stme nts), the Zilkha fa mily, fo und e rs o f Ho rizo n Wind E ne rg y, a nd the Cle a n L ine ma na g e me nt te a m. � Cle a n L ine is 100% inde pe nde nt with no o wne rship tie s to po we r g e ne ra tio n c o mpa nie s o r inc umb e nt utilitie s � Uppe r Midwe st: Curre ntly de ve lo ping 500-600kV DC line fro m So uth Da ko ta / Ne b ra ska to Chic a g o , ~$2 b illio n, 3500 MW o f c a pa c ity utilizing ~4000+ MW o f wind 2

Wha t I s the E nviro nme nta l Go a l? � 80% Re duc tio n in CO2 b y 2050 � Co nsiste nt with the I nte rg o ve rnme nta l Pa ne l o n Clima te Cha ng e � Co nsiste nt with Ste rn Re po rt � Co nsiste nt with UN F ra me wo rk Co nve ntio n o n Clima te Cha ng e 3

Ho w do we g e t the re ? � One E xa mple : I llino is Clima te Cha ng e Ac tio n Pla n � Se e king just to g e t b a c k to 1990 le ve ls b y 2020 re q uire s 16% re duc tio n fro m 2007 le ve ls a nd 26% re duc tio n b y 2020 b a se d o n a b usine ss a s usua l � Sta te pro c e ss to fig ure o ut ho w to g e t the re fo und tha t if yo u thro w in e ve rything fro m 25% b y 2025 RPS to E E PS to no till fa rming to L CF S impro ve d c urb side re c yc ling to the kitc he n sink, yo u still do n’ t g e t the re unle ss yo u a lso a dd Ca p a nd T ra de . So we ’ ve g o t to do it a ll. � T ha t me a ns we a c tua lly ne e d to g e t to 25% re ne wa b le s b y 2025, a nd a lo t mo re a fte r tha t… 4

Do We Ne e d T ra nsmissio n fo r Re ne wa b le s Go a ls? � T wo Appro a c he s 6

E a ste rn I nte rc o nne c t Onsho re Wind Re so urc e F a lls Off Co nside ra b ly Best Worst 7 7

With Se rio us I mplic a tio ns fo r the Co mpe titive ne ss o f Wind Po we r NCF Approx. OH IN IL IA SD/ND/NE Range by State Assumes Onshore $2000/kw installed cost for wind 8 8

Ho w Muc h Re ne wa b le E ne rg y Do We Ne e d? Ho w Muc h Re ne wa b le E ne rg y Do We Ne e d? Ho w Muc h Do We Ha ve ? Ho w Muc h Do We Ha ve ? � U.S. De pt. o f E ne rg y: “20% Wind b y 2030” re po rt � Ne e d 305GW b y 2030 � L BNL : Curre ntly 90% o f Sta te RE S c o mplia nc e is Wind � T ha t is like ly to de c line � AWE A: c urre ntly ~35GW o f wind o pe ra ting in U.S. � Built 10 GW in 2009 � Built 8.3 GW in 2008 9

Bla c k & Ve a tc h T ra nsmissio n Ana lysis � Pla nne d lo ng dista nc e line s = 70 GW o f wind b y 2015; � L ike ly c a pa c ity c lo se r to 35 GW � E xisting T ra nsmissio n Ca pa c ity e stima te d 18 GW � “L o c a l” Wind e stima te d a t 3 GW a nnua lly (60 GW b y 2030) � Re q uire s minima l o r no tra nsmissio n upg ra de s � Co a l re tire me nts sho uld fre e up 10 GW o f tra nsmissio n � Ba se d o n c a lc ula ting wind re so urc e within 25 mile s o f re tiring pla nts � Mo st o f this c a pa c ity is in la te r ye a rs (po st 2020) � Ca rb o n ma y a c c e le ra te re tire me nts � Ne t Ga p F o r 20% Go a l ~163 GW

Ca rb o n a nd T ra nsmissio n: E WI T S � NRE L : E a ste rn Wind I nte g ra tio n Study, 2010, inc lude d 5 sc e na rio s fo r mo de ling : � Sc e na rio 1: 20% wind, c a pturing hig h o n-sho re c a pa c ity fa c to rs in the Gre a t Pla ins � Sc e na rio 2: 20% wind, “hyb rid”, so me Gre a t Pla ins, so me o ffsho re � Sc e na rio 3: 20% wind, lo c a l wind a nd a g g re ssive o ffsho re � Sc e na rio 4: 30% wind, a g g re ssive e ve rything , b uild it a ll � Re fe re nc e : e no ug h to me e t sta te RE S g o a ls b a se d o n wha t is c urre ntly in q ue ue s (6% b y 2024). 11

E WI T S: All Sc e na rio s Ne e d Ne w T ra nsmissio n 12

E WI T S: K e y F inding s � Ne w T ra nsmissio n Re q uire d fo r All Sc e na rio s, inc luding the Re fe re nc e � T ra nsmissio n re duc e s the impa c ts o f the va ria b ility o f wind, e ffe c tive ly a dding c a pa c ity va lue , a s wind is b lo wing so me whe re � “Ca rb o n re duc tio ns in the thre e 20% wind sc e na rio s do no t va ry b y muc h, indic a ting tha t wind displa c e s c o a l in a ll sc e na rio s a nd tha t c o a l g e ne ra tio n is no t sig nific a ntly e xpo rte d fro m the Midwe st to the e a ste rn Unite d Sta te s” � “Ca rb o n e missio ns a re re duc e d a t a n inc re a se d ra te in the 30% wind sc e na rio a s mo re g a s g e ne ra tio n is use d to a c c o mmo da te wind va ria b ility.” 13

E WI T S: Ca rb o n E missio ns 14

E WI T S: Ca rb o n E missio ns � Why? � Co a l do e s no t ra mp we ll � I f wind is g e tting PPAs to me e t na tio na l RE S, wind fills up the b a se ma rke ts a nd ne w line s � Only o ppo rtunitie s fo r c o a l a re pe a king ma rke ts (whe n wind do e s no t b lo w), whic h the y a lre a dy ha ve o r the y’ d a lre a dy b e c lo se d 15

Co nc lusio ns � I f ne w tra nsmissio n is a c c o mpa nie d b y ma rke ts fo r wind, ne w tra nsmissio n do e s no t c re a te sig nific a nt ne w o ppo rtunitie s fo r c o a l � F e de ra l le g isla tio n suppo rting tra nsmissio n no t po litic a lly via b le witho ut b ro a de r pa c ka g e suppo rting re ne wa b le s a nywa y � Oppo sing ne w tra nsmissio n will kill wind a nd de ra il pro g re ss o n me e ting c a rb o n g o a ls � Othe r wa ys to re duc e c o a l witho ut c o lla te ra l da ma g e to RE a re a va ila b le � F ind yo ur pa th to mo rro w, b ut first: DO NO HARM 16

Thank You! Hans Detweiler hdetweiler@cleanlineenergy.com www.cleanlineenergy.com 17 17 Privile g e d & Co nfide ntia l

Hig h Wind Pe ne tra tio n Will Mo ve Pric e s o f E ne rg y * 20% Wind Full Constrained Case - Annual Load Weighted LMP - Source: Joint Coordinated System Plan, 2009 � Low LMP’s for wind in rich resource areas is driving down the value of wind already, making the financing of new projects especially challenging � Transmission is required to move energy out of wind saturated markets where renewables will move LMPs 18

Be st Wind Re so urc e s L o c a te d in the We a ke st T ra nsmissio n Syste ms 19