NYISO queue update – 48 wind projects

Forty-eight wind projects (including two Long Island Cable projects) are in the NYISO queue to ultimately connect to the state’s electric grid.

These projects represent a total of almost 7GW of summer peak production, and have an average size of 144 MW summer peak production. The numbers are relatively high owing to the scale of the few offshore products in the queue.

Here for a full table of current wind projects in the NYISO queue.

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First Wind files Amendment 5 to SEC Registration Statement

Lots of great information about the process and financing of wind development in New York State and elsewhere contained in Amendment No. 5 to FORM S-1 REGISTRATION STATEMENT of First Wind Holdings, Inc. before the U.S. SECURITIES AND EXCHANGE COMMISSION, filed March 26, 2010. As we know, New York is desirable for wind development because of a rich wind resource, relatively high electricity rates and its progressive renewable energy policies such as the Renewable Portfolio Standard (RPS). Here are some excerpts:

Our Portfolio of Wind Energy Projects
Operating Projects

Cohocton is a 125 MW project in Steuben County, New York. Cohocton commenced commercial operations in January 2009. The project consists of 50 2.5 MW Clipper turbines. Cohocton is the third largest wind project in the state of New York. Similar to Mars Hill (described below), Cohocton qualifies a portion of its energy for New England RECs. The project provides local benefits to the community through property tax revenue and economic development, along with local renewable power sales.

Cohocton wheels approximately 55% of its energy to ISO-NE where its RECs are sold to various counterparties. 40% of Cohocton’s RECs are sold to the New York State Energy Research and Development Authority (NYSERDA) under 10-year, fully financeable contracts. The remaining 5% of Cohocton’s RECs is sold into the voluntary REC market. Cohocton’s power is also sold directly into NYISO Zone C where it receives floating power prices. To stabilize Cohocton’s electricity revenue, we entered into a swap with an affiliate of Credit Suisse for approximately 70% of expected generation through the end of 2014. Cohocton was among the first recipients of an ARRA grant, receiving approximately $76 million in September 2009. The remainder of our construction costs at Cohocton are financed with a combination of senior project debt from HSH Nordbank and Norddeutsche Landesbank Girozentrale and structurally subordinated debt of CSSW, LLC. Our total installed development and construction costs for Cohocton were approximately $270 million, including approximately $10 million of financing-related costs and excluding prepaid turbine maintenance and warranty costs. We estimate Cohocton’s long-term NCF [net capacity factor] will be approximately 25% to 27%, as described further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”…

Steel Winds I

Steel Winds I, which commenced commercial operations in June 2007, is a 20 MW project on the shores of Lake Erie in Lackawanna, New York, just south of Buffalo. The larger site on which the project is located was formerly a steel mill. The project consists of eight 2.5 MW Clipper turbines, the first turbines of this type Clipper produced. We undertook this project primarily as a means of testing and gaining operating experience with the Clipper wind turbines. The project’s relatively small size allowed us to initially finance the project with 100% equity, which provided more flexibility as we worked with Clipper to understand the technology and deal with start-up issues that can be common in new turbine designs. We anticipate expanding Steel Winds in 2010 to bring the total project size to 35 MW, which we believe will introduce benefits of scale.

For power at Steel Winds I we receive floating power prices within New York Independent System Operator (NYISO) Zone A. To stabilize this revenue, we entered into a swap with an affiliate of Morgan Stanley. The volume of this swap is approximately 95% of Steel Winds’ expected output. This hedge expires at the end of 2016. In January 2010, we entered into a five-year PPA with an affiliate of Just Energy Income Fund for all RECs from the project. Steel Winds I qualifies for PTCs and MACRS depreciation and receives cash payments for electricity and RECs. Our total installed development and construction costs for Steel Winds I were approximately $35 million, excluding prepaid turbine maintenance and warranty costs, and are financed by a combination of equity and structurally subordinated debt of CSSW, LLC. We estimate Steel Winds I’s long-term NCF will be approximately 29% to 31%, as described further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”…

2010 Projects

…       Steel Winds II

Steel Winds II is a 15 MW expansion project in Lackawanna, New York. It will consist of six 2.5 MW Clipper turbines and will use our existing infrastructure, including interconnection equipment and site personnel. We are currently in the process of securing the necessary land and other rights to conduct and operate the project. The project’s System Reliability Impact Study and Facilities Study is complete and we are working towards an interconnection agreement with the New York Independent System Operator (NYISO) and National Grid. While we continue to evaluate alternatives, we anticipate selling power from Steel Winds II directly into the market through NYISO Zone A and hedging our revenue with a financial swap. We estimate that our total installed development and construction costs for Steel Winds II will be approximately $40 million, including approximately $5 million of financing-related costs and excluding prepaid turbine maintenance and warranty costs. We estimate that Steel Winds II’s long-term NCF will be approximately 28% to 30%….

Purchase of Prattsburgh Real Property

On February 22, 2008, we entered into a purchase agreement with Windfarm Prattsburgh, LLC, a Delaware limited liability company and our indirect wholly owned subsidiary; UPC Wind Partners II, LLC; and BEC New York Properties, LLC, a Delaware limited liability company that is owned by Brian Caffyn, with respect to a parcel of land situated in the town of Prattsburgh, New York pursuant to which Windfarm Prattsburgh, LLC purchased the parcel of land from BEC New York Properties, LLC. Windfarm Prattsburgh, LLC agreed to purchase the parcel for (i) consideration of 152,527 Series A Units in UPC Wind Partners LLC to be granted to UPC Wind Partners II, LLC as the seller’s designee and (ii) a payment of $23,000 from Windfarm Prattsburgh, LLC to BEC New York Properties, LLC. In connection with that transaction, First Wind Holdings, LLC granted 152,527 Series A Units for non-cash consideration to UPC Wind Partners II, LLC….

Project Development Costs
… Should the Company decide to abandon or discontinue development of a Tier 1 project, previously capitalized costs are charged to expense in the period that such determination is made. At December 31, 2008, the Company determined that it was more likely than not that it would discontinue development of its Prattsburgh I project, which is located in New York. Upon reaching this determination, previously capitalized development costs of $3.5 million were expensed in December 2008 and included in project development expenditures in the statement of operations. In December 2009, the Company discontinued the development of the Prattsburgh I project….

Legal Proceedings

The Company is involved from time to time in litigation and disputes arising in the normal course of business, including proceedings contesting our permits or the operation of our projects. Management does not believe the following proceedings will, if determined adversely, have a material adverse effect on the financial condition, results of operations and liquidity of the Company:

On July 15, 2008, the Company was served with a civil subpoena by the New York State Attorney General relating to an investigation into its activities in the State of New York. In response to the subpoena, First Wind produced documents and information relating principally to the New York State Attorney General’s investigation into: (i) whether the Company improperly sought or obtained land-use agreements with citizens and public officials, (ii) whether improper benefits were given to public officials to influence their actions and (iii) whether the Company and its competitors entered into anti-competitive agreements or practices. The Company cooperated fully with the requests of the New York State Attorney General, with the assistance of outside counsel. Outside counsel also conducted its own internal investigation on behalf of the Company. On October 29, 2008, the Company voluntarily agreed to implement a Code of Conduct, created by the New York State Attorney General to govern the Company’s future conduct in connection with wind energy project development in New York State. The Company entered into a subsequent version of the New York code in October 2009. The Company has been advised by the New York State Attorney General’s office that it is not currently under investigation….

Source: First Wind SEC filing. See also “Wind-Power Developer First Wind To Price IPO In April”  from Dow Jones (3/31)

NYISO white paper on potential benefits of energy storage in NY electricity markets

The New York Independent System Operator (NYISO) has released a 16-page white paper highlighting the possibilities “Energy Storage in the New York Electricity Markets”. The document discusses potential benefits of energy storage, including those relating to intermittent sources of power generation, such as wind:

Wind power, in terms of both capacity and generation, has surged in New York State in recent years. Since the beginning of 2007, more than 1,200 megawatts of wind capacity has been added to the grid. The continued growth of wind as a generation resource is expected for the foreseeable future due to a variety of factors including open access to the grid, price signals provided by NYISO’s wholesale electricity markets, the State’s Renewable Portfolio Standard (RPS), New York’s participation in the Regional Greenhouse Gas Initiative (RGGI), and the potential for Federal programs controlling carbon emissions.

The NYISO Interconnection Queue includes almost 7,000 megawatts of wind power projects, which represent about 40% of the generating capacity in the queue. While there are no guarantees that all of the proposed projects will be built, the significant number of potential projects is an indicator of the positive prospects for further wind development in New York State.

Energy storage resources, combined with the NYISO’s pioneering wind dispatch system, can help New York take full advantage of its wind power resources….

Source: NYISO, Energy Storage in the NY Electricity Market.  Also, NYISO press release. (3/2010)

Blogger now on National Grid’s smart[er] grid

[Update 9/12/2009] With the help of tenacious Schenectady Daily Gazette reporter Ameerah Cetawayo, this chagrined blogger has learned he’s actually got a not-so-dumb meter at his house, which keeps track of, apparently, only time of use. It’s a step in the right direction, I still think, as it should motivate my household to use electricity during off-peak times. But, no bells and whistles appear to be in store. I won’t be able to watch real time displays of my usage.

August 18

This blogger has been chronicling his attempts to hop aboard the “smart grid” bandwagon. Well it finally happened August 12, after my July 20 inquiry for a status update of my request. On that date, National Grid appears to have installed a new “smart meter” on my house. (I say “appears” only because no one told me it was going to be installed; I found out only because I received a signed agreement from National Grid in the mail and went and checked the meter.)

It took some time to get-r-done, but I do realize that National Grid is attempting to roll out a wider program in the upstate New York area and beyond.

While more updates will follow, I note that as a consumer I do find it frustrating that I am not aware -yet at least- of any way to obtain usage information other than by going outside my house and looking at the meter. This analog solution to a seemingly digital issue seems a bit archaic.

As of March 2009 the SC1C rate program entails the following hours:

RATE PERIODS: Summer (June, July, August) Winter (December, January, February) Off-Season (March, April, May, September, October, November)
On Peak
  • 11:00 a.m. to 5:00 p.m., weekdays
  • 5:00 p.m. to 8:00 p.m., weekdays
  • N/A
Shoulder Peak
  • 8:00 a.m., to 11:00 a.m. and 5:00 p.m., to 8:00 p.m., weekdays
  • 9:00 a.m. to 5:00 p.m., weekdays
  • N/A
Off Peak
  • 8:00 p.m. to 8:00 a.m., weekdays
  • All hours, weekends
  • Independence Day
  • 8:00 p.m. to 9:00 a.m., weekdays
  • All hours, weekends
  • Christmas and New Year’s
  • N/A
Off Season
  • N/A
  • N/A
  • All hours of all days

So it would appear that I (well, my family is engaged in this process as well) have a few days left of experiencing smart grid benefits (or pain) before moving to the off-season.

While I do understand that fall and spring traditionally experience less energy use than summer and winter, why would it not be compelling, if incenting consumer behavior is necessary to help control load requirements, to continue peak, shoulder peak and off-peak hours in these “off” months?

[Updated 8/18:  See related 8/18 Times Union article about public details of National Grid’s smart grid plan: “National Grid told to reveal details : PSC says utility cannot withhold financial info regarding “smart grid” plan”]

Berkeley Lab releases “Wind Technologies Market Report”

New Study Sheds Light on the Growing U.S. Wind Power Market

Berkeley, California – For the fourth consecutive year, the U.S. was home to the fastest-growing wind power market in the world in 2008, according to a report released today by the U.S. Department of Energy and prepared by Lawrence Berkeley National Laboratory. Specifically, U.S. wind power capacity additions increased by 60 percent in 2008, representing a $16 billion investment in new wind projects. “At this pace, wind is on a path to becoming a significant contributor to the U.S. power mix,” notes report author Ryan Wiser, of Berkeley Lab. Wind projects accounted for 42% of all new electric generating capacity added in the U.S. in 2008, and wind now delivers nearly 2% of the nation’s electricity supply.

The 2008 edition of the “Wind Technologies Market Report” provides a comprehensive overview of developments in the rapidly evolving U.S. wind power market. The need for such a report has become apparent in the past few years, as the wind power industry has entered an era of unprecedented growth, both globally and in the United States. At the same time, the last year has been one of upheaval, with the global financial crisis impacting near-term growth prospects for the wind industry, and with federal policy changes enacted to push the industry towards continued aggressive expansion. “With the market evolving at such a rapid pace, keeping up with trends in the marketplace has become increasingly difficult,” notes report co-author Mark Bolinger. “Yet, the need for timely, objective information on the industry and its progress has never been greater…this report seeks to fill this need.”

Drawing from a variety of sources, this report analyzes trends in wind power capacity growth, turbine size, turbine prices, installed project costs, project performance, wind power prices, and how wind prices compare to the price of conventional generation. It also describes developer consolidation trends, current ownership and financing structures, and trends among major wind power purchasers. Finally, the report examines other factors impacting the domestic wind power market, including grid integration, transmission issues, and policy drivers. The report concludes with a preview of possible near- to medium-term market developments….

2008 Wind Technologies Market Report

PowerPoint presentation summarizing key findings

Department of Energy’s press release

NY PSC announces modified net metering tariffs

From the New York State Public Service Commission

PSC EXPANDS ABILITY TO USE WIND POWER — Non-Residential Customers Now Eligible to Net Meter Wind Generation — Albany, NY—06/18/09—The New York State Public Service Commission today approved tariff filings, with modifications, for implementation of net metering residential, farm service and non-residential wind electric generating systems in the service territories of four investor-owned utilities in New York. Net metering enables customers to sell back power to the utility. The effective date of the modified net metering tariffs is July 1, 2009.

“Net metering encourages the use of small-scale renewable energy systems, which provide long-term benefits to the environment and the economy,” said Commission Chairman Garry Brown. “By using net metering, a home or business owner is able to take excess electricity created by wind energy generation or other qualifying renewable generation and in effect either banks the electricity until it is needed or sells it back to the utility at its retail value, thereby providing a benefit for the customer and the environment.”

The four investor-owned utilities—Niagara Mohawk Power Corporation d/b/a National Grid, New York State Electric & Gas Corporation (NYSEG), Rochester Gas and Electric Corporation (RG&E), and Central Hudson Gas & Electric Corporation (Central Hudson)—made the requisite filings by April 1, 2009, to conform their wind net metering tariffs to the requirements of Section 66-l of the Public Service Law.

Previously, Consolidated Edison Company of New York, Inc. (Con Edison) and Orange and Rockland Utilities, Inc. (O&R) filed wind net metering tariffs which were approved by the Commission in the 2009 Net Metering Order. That Order, however, provided that Con Edison and O&R could be required to revise their wind net metering tariffs when the remaining four investor-owned utilities’ tariffs were considered by the Commission.

Currently, Central Hudson, National Grid, NYSEG and RG&E limit wind net metering to residential installations of 25kW or less and residential farm installations of 125kW or less, subject to a ceiling set at 0.2 percent of each utility’s 2003 peak load.

Today the Commission approved utilities’ wind net metering tariffs to: 1) expand eligibility for wind net metering to include non-residential customers installing wind generation systems sized at no more than the customer’s load, up to a ceiling of 2 megawatts; 2) increase the capacity ceiling for farm wind systems from 125kW to 500kW; and, 3) expand each utility’s wind generation load ceiling to 0.3 percent of the utility’s peak demand for 2005 on a first-come, first-served basis. Residential installations eligible for net metering remain unchanged at a maximum of 25kW.

The Commission’s written Order in Cases 09-E-0284, 09-E-0296, 09-E-0297, 09-E-0298, 08-E-1306 and 08-E-1307, when issued, may be obtained by going to the Commission Documents section of the Commission’s Web site at www.dps.state.ny.us and entering any one of the aforementioned case numbers in the input box labeled “Search for Case/Matter Number.”

The Commission’s 2009 Net Metering Order in Case 08-E-1305 also can be obtained from the Commission’s Web site. Many libraries offer free Internet access. Commission Orders may also be obtained from the Commission’s Files Office, 14th floor, Three Empire State Plaza, NY 12223 (518-474-2500).

NYSPSC press release here

Two thoughts on AWEA Chicago 2009

This blogger attended the American Wind Energy Association (AWEA) annual event in Chicago. Some 20,000 people reportedly attended. Over 1000 exhibitors were pitching a solution for every (and I mean every) element of the wind power equation. Truly an impressive sight.

I am left with two thoughts. First is a concern whether the extraordinary enthusiasm is part of a growing bubble that inevitably will burst or, rather,  illustrative of an authentic and emerging attitudinal shift, the end result of which would make renewables in general and wind in particular part of the mainstream vernacular. As a veteran of two bursting bubbles (telecom and mortgage lending) I feel cautious.

Second is in regard to that potential paradigmatic shift. One panel of leading industry executives (Vic Abate-GE, Ditlev Engel-Vestas, Declan Flanagan- E.On, Michael Polsky-Invenergy LLC and even Gen. (ret.) Wesley Clark-now of Emergya Wind Technologies) stressed that the U.S. needs policy changes to reach goals (e.g., 20 percent wind by 2030) commonly discussed in the industry. That panel was followed by an interview of Boone Pickens.

While Mr. Pickens certainly has his millions of dollars, he nevertheless possesses a down home appeal, which has helped his transformational natural gas/wind energy Pickens Plan to attract millions of adherents. If wind is to become a power generation source adopted by the mainstream, the industry will need more like Mr. Pickens – a non-preacher who can explain its appeal in readily understandable terms.