NU / NSTAR Proposed HVDC Transmission Line - NPCC 2009 General Meeting Cambridge, MA September 23, 2009
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NU / NSTAR Proposed HVDC
Transmission Line
Allen W. Schindler
NPCC 2009 General Meeting
Cambridge, MA
September 23, 2009
1Topics for Today’s Discussion
• New England environmental requirements
• The need for a portfolio approach
• NU / NSTAR proposed HVDC project with Hydro-Quebec
2New England Regional Environmental Challenges
Renewable Portfolio Standards Needs Regional Greenhouse Gas Initiative
CO2 Emissions
40000
75
35000
70
30000
Millions of Tons
25000 65
GWh
20000 60
15000
55
10000
5000
50
0 45
07
09
11
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15
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19
21
23
25
07
09
11
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15
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RPS Requirements Existing Renewables NE RGGI CO2 Budget Projected NE CO2 Emissions
Compliance gap is 24 million MWh Compliance gap is 21 million tons
by 2025 CO2 by 2025
Equivalent to 3,000 MW biomass (80%), Equivalent to 38 million MWh or 5,400 MW of
7,900 MW wind (30%), or 19,700 MW solar emitting baseload generation
(12%)
New England has 2,800 MW of coal
Opportunities to develop large scale projects 3
in ME (wind) and NH (wind, biomass), but not
sufficient to meet requirements
Note: Based on 2007 analysis.Northern New England & Eastern Canada Will Become
Valuable Sources to Meet New England’s Needs
Eastern Canadian Development
New England’s Most Attractive
Renewable Energy Locations
Newfoundland
H & Labrador
Exploring development
of large Hydro facilities
B H
W Quebec
Hydro Quebec plans
B $20 Billion investment
W in Hydro and H
W B export transmission
W
W
B B Biomass
New Brunswick
H Hydro N Exploring development
of 1 or 2 nuclear units
W N Nuclear
W Wind
General Movement
Of Power
4Impact of Integrated Actions on New England Goals
Proposed Near Term Regional actions
1. Reduce energy consumption 2. Decarbonize fuel supply
Cut load growth by Develop 2,000 – 2500 MW of Develop 1200 MW new
1/3 to 1/2 New England renewables tie-line to Quebec
Renewables Tons CO2
(GWH, 000’s) (Millions)
30 30
25 24 21
25
20 20
(3-5)
15 15
(5-6) (6-9)
10 10
(3-4) 2-8
5 2-9
5
(7-11) (4-6)
0 0
5HVDC Project Overview
HVDC Line
from Hydro
Quebec to NH • HVDC tie line would add 1200
MW of import capability into New
England
• HVDC Transmission costs will be
paid for using a participant pays
model with cost based rates
• Intent is to develop a PPA to flow
the benefits of the project directly
to New England load
• Project brings significant benefits
to New England
– Economic value
– CO2 reductions
– Fuel diversity
6Logic behind NU / NSTAR HVDC Project with Hydro Quebec
• Bonafide supplier with committed low carbon supply
– Project leverages new hydro facilities already under construction in
Quebec
Low Carbon – HQ system power with high reliability
Generation
– Hydropower is dispatchable for planned deliveries to New England
– Winter peak/summer peak compatibility
• Developable path with existing right of way and few technical
challenges
– New Hampshire provides short path from resource to market
– Project will utilize overhead proven HVDC technology
Transmission – Construction synergies with NH Coos County renewables
• Committed load to anchor project
– NU and NSTAR collectively serve half of New England’s electricity load
and all major load centers and can effectively “anchor” the PPA
Load
7Project Overview and Structure
• 1200 MW HVDC line from the Hydro Quebec system to New
Hampshire for delivery of system power, mainly from new hydro
facilities under development
• Quebec segment ownership by HQ-TransEnergie
• US segment ownership jointly between NU and NSTAR
• FERC approved Participant funded approach for cost allocation
– Revenue requirements paid for by Hydro-Quebec US
– Transmission rights assigned to Hydro-Quebec US
– Unused capacity owned by HQ US will be made available to secondary
market
• Operation by ISO-New England
• Target in-service date is 2014
8Overview of Our FERC Approval
• NU/NSTAR request of FERC for a Declaratory Ruling on the
project was approved in May 2009
• Relevant Considerations
– Project is not a merchant project
– Project is participant funded, with cost-based rates
– Transmission Service Agreement to be filed with FERC for approval
– Power Purchase Agreement to be approved by state regulators
– Project to be vetted through ISO-NE planning process
– Project to be turned over to ISO-NE for operation
– Project is subject to state siting requirements
“This project will provide several important benefits to consumers in New
England. For example, this project provides access to clean, low-cost energy
for consumers in a region of the country that has tight constraints on
electricity supplies. In addition the project promotes competition in the region
by facilitating the transmission of Canadian hydro power to markets in the
United States, enhancing the region’s fuel diversity.”
FERC Chairman, Jon Wellinghoff
9Three Core Agreements
1. Joint Development Agreement
– NU and HQ-TransEnergie for the design and construction of the HVDC line
– Des Cantons is the expected northern terminus
– Southern terminus has several viable alternatives identified
2. Transmission Services Agreement
– Firm transmission services for HQ-US under this bilateral agreement
– HQ will pay for the HVDC line – participant funded
– Negotiated, cost based rates with FERC filing for approval
– Not merchant and no market-based pricing
3. Purchase Power Agreement
– Available to NU, NSTAR and other qualified New England buyers
– No less than 20 year term
– All-in priced power (including the costs of the transmission line)
– State regulators will have approval for the power purchase by their respective
utilities
10Project Benefits
• CO2 Emissions: Injecting 1,200 MW of new hydro power would
reduce CO2 emissions by up to 6 million tons representing 30% of the
2025 “gap to target”
• Other environmental benefits: Power will displace marginal fossil
generation and associated environmental impacts – frees up enough
natural gas to heat 1 million homes
• Fuel Diversity: Increase in hydro power to New England significantly
increases the region’s fuel diversity, reducing the dependence on oil
and gas
• Market Power Prices: The scale of the project is expected to lower
market prices for power for all customers
• PPA benefits: A pricing structure that will be competitive with the
market
• Participant Funded: The required investment in HVDC facilities will
be borne by the parties without regional cost allocation
A unique opportunity for both New England and Hydro Quebec –
a classic “win-win”
11Current Project Status
• Negotiation of key agreements is underway and active
– PPA for review by New England state regulators
– TSA for approval by FERC
• Technical studies being finalized
– HVDC design
– Determination of southern HVDC terminal location
• Preliminary project work beginning
– Routing analysis
– Environmental studies
– Early communications and outreach
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