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Invenergy Invenergy The Power of Innovation Discussion Outline Introduction to Invenergy Wind generation development 101 The impact of HB 1871 – The Illinois state RPS Invenergy Invenergy Wind Overview Operational Projects Contracted Projects Invenergy Offices Invenergy Invenergy Midwest Portfolio Grand Ridge Location: IL Size: 350 MW COD: Mid 2008 Interconnection: PJM Bishop Hill Locations: IL Size: 400 MW COD: Late 2008 Interconnection: PJM/MISO Wind Project Wind Project Victory Location: IA Size: 99 MW COD: December 2006 Interconnection: MidAm Forward Location: WI Size: 200 MW COD: 2007 Interconnection: ATC Nelson CC Location: IL Size: 600MW COD: Mid 2009 Interconnection: PJM White Oak Location: IL Size: 150 MW COD: Late 2007 Interconnections: MISO Gas-Fired Project Gas-Fired Project Invenergy Wind Development 101 Wind Wind turbines Land Interconnection agreement A market for the energy A market for the renewable energy credits Invenergy Wind Intensity in the U.S. Invenergy Wind Turbines How big are they? How are they put together Tower - 80 meters (about 25 stories) at the hub Blades – 38 meters (about 100 feet) long Concrete footing poured Three tower pieces assembled in place Three blades attached to the hub and lifted into place How fast do they turn? 16 RPM (one rotation every four seconds) Invenergy Land Use Wind farms and agriculture are very compatible Wind farms require from 50 – 100 acres per turbine, with a typical wind farm comprising of 100 turbines When completed, each turbine only removes 0.25 acres from production Hosting a wind farm greatly benefits the community Tax base increased by ~ $2.5 MM per turbine Affected landowners receive compensation through easement and waiver agreements Invenergy Interconnection Agreement The interconnection agreement allows for the generator to interconnect to the electric transmission system This process is one of the most time consuming steps of the development process: Step Feasibility Study System Impact Study Facility Study Interconnection Agreement Commercial Operation Total Time (days) MISO 150 days 148 days 175 days 210 days 365 days* 1048 days PJM 240 days 120 days 120 days* 30 days 365 days* 875 days * Timeline not limited in tariff In recent experience, neither PJM nor MISO has been able to adhere to these timelines Invenergy Marketing the Energy and RECs How wind energy and RECs are sold varies by market In less actively traded markets, energy and RECs are sold under long term contracts to load serving utilities Contracts typically 20 – 25 years long Pricing fixed for the term Common in CO and WI In more actively traded markets, energy and RECs are often sold separately Energy sold into power pool Energy price risk managed through commodity risk managers, typically for 10 years RECs sold to load serving entities Common in TX and PJM Invenergy Impact of HB 1871 On May 3rd, the IL House passed a bill providing for a renewable portfolio standard (RPS) for IL Sets a requirement that 25% of IL’s energy requirements are met by renewables by 2025, with implementation beginning in 2007 Requires in state generation through 2011 Protects ratepayers through caps on rate impacts Clear ratemaking requirements will be critical to its implementation Provides for 20 year power purchase agreements Provides for the Commission to review and approve solicitation processes Invenergy U.S. Renewable Portfolio Standards MN: 25% by 2025; *WA: 15% by 2020 (Xcel: 30% by 2020) VT: RE meets load growth by 2012 ME: 30% by 2000; 10% by 2017 goal - new RE WI: requirement varies by utility; 10% by 2015 goal MT: 15% by 2015 MA: 4% by 2009 + 1% annual increase RI: 15% by 2020 CT: 10% by 2010 IA: 105 MW CA: 20% by 2010 ☼ NV: 20% by 2015 ☼ CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis) ☼ NY: 24% by 2013 IL: 8% by 2013 ☼ NJ: 22.5% by 2021 ☼ PA: 18%¹ by 2020 *MD: 7.5% by 2019 ☼ AZ: 15% by 2025 *NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) *DE: 10% by 2019 ☼ DC: 11% by 2022 TX: 5,880 MW by 2015 Solar water heating State RPS HI: 20% by 2020 State Goal ☼ Minimum solar or customer-sited requirement * Increased credit for solar or customer-sited ¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resource Invenergy Comparison on State RPSs State Size of RPS (%) IL (as proposed) 08 – 2% 09 – 4% 10 – 5% 11 – 6% 12 – 7% WI 08 – 5.5% 09 – 5.5% 10 – 7.5% 11 – 7.5% 12 – 7.5% NJ 08 – 5.5% 09 – 6.5% 10 – 7.4% 11 – 8.3% 12 – 9.2% TX 07 – 1.4% 09 – 1.9% 11 – 2.4% 13 – 2.9% 15 – 3.1% Size of RPS (MWh/year) 08 – 2,960,000 09 – 6,003,000 10 – 7,608,000 11 – 9,253,000 12 – 10,941,000 08 – 4,135,000 09 – 4,212,000 10 – 5,850,000 11 – 5,957,000 12 – 6,063,000 08 – 4,723,000 09 – 5,693,000 10 – 6,620,000 11 – 7,566,000 12 – 8,569,000 08 – 6,079,000 09 – 7,166,000 10 – 8,252,000 11 – 9,338,000 12 – 10,424,000 Qualifying Technologies Solar Water Heat, Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, CHP/Cogeneration, "Other Such Alternative Sources of Environmentally Preferable Energy" Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Tidal Energy, Wave Energy, Fuel Cells using Renewable Fuels Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Resource-Recovery Facilities approved by the DEP, Anaerobic Digestion, Tidal Energy, Wave Energy, Fuel Cells using Renewable Fuels Solar Water Heat, Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Geothermal Heat Pumps, Tidal Energy, Wave Energy, Ocean Thermal Qualifying Locations 08 through 11 – IL (subject to economic tests) Physical delivery to the utility (generally WI and IA) Generators that deliver energy into PJM. ERCOT 12 and beyond – IL, WI, IA, MO, KY and IN Invenergy Meeting the IL RPS through Wind 70,000 60,000 Annual Generation (GWh/yr) Currently Proposed Wind Capacity (GWh/yr) Wind Capacity Under Construction (GWh/yr) 50,000 Existing Wind (GWh/yr) REC Requirements to be Met by Wind (GWh/yr) 40,000 AWEA Estimated IL Wind Energy Potential (GWh/yr) 30,000 20,000 10,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Invenergy Proposed IL Wind Projects Project Utility/Developer Location Status MW Cap GSG Wind Farm Phase I Babcock & Brown and FPC Services Lee and LaSalle Counties under construction 80 Twin Groves I Horizon Wind Energy McLean County under construction 198 Twin Groves II Horizon Wind Energy McLean County Proposed 198 McLean Wind Energy Center (White Oak) Invenergy McLean Proposed 150 Bishop Hill Invenergy Henry County Proposed 350 Grand Ridge Invenergy LaSalle County Proposed 400 Crescent Ridge II Midwest Wind Energy Bureau County Proposed 74 Big Sky Wind Farm Midwest Wind Energy Lee & Bureau Counties Proposed 200 Rail Splitter Wind Farm Horizon Wind Energy Logan, Tazewell Counties Proposed 100 Blackstone Wind Farm Horizon Wind Energy Livingston County Proposed 300-600 Baileyville Wind Farm Navitas Energy Ogle County Proposed 80 Benson Wind Farm Navitas Energy Woodford County Proposed 160 Source - AWEA Invenergy Summary Wind energy can contribute significantly to serving Illinois’ energy supply needs going forward HR 1871 sets a high, but attainable, goal for renewables in IL, and wind will play a leading role in meeting it In order to meet that goal, developers, ISO’s, landowners, utilities, and those that oversee them will have to work together Invenergy Questions? 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