Midwestern Governors Conference July 31, 2008 Wind Power ......Plan and File Interconnection Study...
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1 Privileged and Confidential – For Internal Use Only Mackinaw Power, LLC Midwestern Governors Conference July 31, 2008 Wind Power Development 101 Richard F. Vander Veen Mackinaw Power, LLC 414 E. Main Street, Suite B, Lowell, MI 49331 Phone: 616.897.1304 Fax: 616.897.1307 [email protected]
Transcript of Midwestern Governors Conference July 31, 2008 Wind Power ......Plan and File Interconnection Study...
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Mackinaw Power, LLC
Midwestern Governors Conference
July 31, 2008
Wind Power Development 101Richard F. Vander Veen
Mackinaw Power, LLC
414 E. Main Street, Suite B, Lowell, MI 49331
Phone: 616.897.1304 Fax: 616.897.1307 [email protected]
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Mackinaw Power, LLC
Mackinaw Power Overview
To create financial, social, and natural capital as we develop, finance, construct, operate and maintain state-of-the-art
renewable energy facilities in the Great Lakes Basin
To create financial, social, and natural capital as we develop, finance, construct, operate and maintain state-of-the-art
renewable energy facilities in the Great Lakes BasinVisionVision
In 3 to 5 years we will be:• The renewable energy developer-of-choice in the Great Lakes• Recognized as a catalyst for technological breakthrough• A full-service renewable energy firm• An employer-of-choice for talented people in high demand
In 3 to 5 years we will be:• The renewable energy developer-of-choice in the Great Lakes• Recognized as a catalyst for technological breakthrough• A full-service renewable energy firm• An employer-of-choice for talented people in high demand
MissionMission
To be the first mover in developing world class wind power projects on the most promising sites in Michigan by engaging
and empowering all stakeholders in the process, thus becoming the developer-of-choice in the expanding renewable
energy market throughout the Great Lakes.
To be the first mover in developing world class wind power projects on the most promising sites in Michigan by engaging
and empowering all stakeholders in the process, thus becoming the developer-of-choice in the expanding renewable
energy market throughout the Great Lakes.
StrategyStrategy
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Mackinaw City Wind Farm 900 kW NEG Micon Wind Turbine230’ Hub height; 85’ Blades
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First to Market!Mackinaw City Wind Power Project = First Privately-Financed
Wind Power Project in the Great LakesMichigan’s first Wind Turbine Zoning Ordinance: Emmet County
Passed Unanimously, 2001; Jim Tamlyn, Chair, Emmet Co. Comm.
Michigan’s first Private Wind Turbine Leases & Community Benefits
$$$ to Mackinaw City, Emmet County and Mackinaw City
First Michigan Tariff: Consumers Green Power Pilot Program, U-13029
$ Sold Out! December 2001 – December 2005 at a 40% premium or 3.2 cents per kWh; 2006 at a 1.67 cent/kWh premium
First Michigan Power Purchase Agreements
Consumers Energy 35 MW, 17 Years; U-13843
First Michigan Interconnection Agreement
Mackinaw City Wind Project, December, 2001 – 2008
Serving Michigan Customers and Communities for Six+ Years
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Mackinaw City 1.8 MW Project, Generating > 15 million kWh
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Mackinaw Power Goals
1. Educate & Get Involved in WW Groups & AWEA
2. Capitalize & Build Solid Development Team
3. ID Wind Power Project Target Areas
4. Earn Community Trust & Confidence
5. Follow Mackinaw Power 11 Step Roadmap
6. Insist on Quality Work, Technology and Operations
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“Great Lakes, Great Wind” Video by Ben Vander Veenselected for the MDEQ Michigan Environmental Education Curricula
introduced to all Michigan Middle Schools in 2007
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Mackinaw Power Development Goal 1: Educate & Get Involved in Wind Working Groups & AWEA
Education and Commitment
Join Coalitions & Pass Solid Renewable Portfolio Standards
Adopt Clear Energy Efficiency Standards & Incentives
Earn Community Trust & Confidence
Develop Balanced Zoning Ordinances
Extend the federal Production Tax Credit (PTC) 2009 - 2014
Great Lakes States: Generation Portfolios
Great Lakes 260,000+ MW Generation Portfolio
Great Lakes Capacity Growing 2% Demand Annually = 5,200 MW/year
2008-2028 = +104,000 MW
NY41,572
WI15,524
PA 50,972
OH37,611
MI33,554
Renewables 10%
IN29,959
Great Lakes States Goal: Diversify States Generation Portfolios
Great Lakes 260,000+ MW Generation Portfolio
Great Lakes Capacity Needs Forum cites 2% Demand Annually = 5200 MW/year = 52,000 MW by 2018 100,000 MW 2028
#1: + 10% Energy Efficiency
#2 + 10 % New Renewable Energy To Stabilize and Reduce Energy Costs, 2008-2028
Like a Treasury Bill Boosts Financial Portfolio Performance, 10,000 MW New Wind Power Boosts the Great Lakes’Generation Portfolio Performance
Coal 54%
Nuclear 20%
Gas 4%
Efficiency & Renewables
20%
Ren
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Mackinaw Power Goal 2:Build and Capitalize Solid Team
Assure sufficient financial and human resources to achieve proactive, Best Practices Project Development
Educate, manage, challenge and build the Team, “incentivizing” each member
Clearly define Roles and Scopes of Work
Recruit the “A” Team and Earn Strategic Alliances
Consider Internship Opportunities with Colleges & Universities
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Mackinaw Power Development Goals & Value ChainProject Phases
Operate Operate and and
MaintainMaintainBuildBuildFinanceFinanceDevelopDevelop
Primary Activities
• Site Facility• Study Wind• Sign PPA• File Interconnect
• Raise Equity Financing• Raise Debt Financing• Launch Project, LLC
• Plan Construction• Prepare Site• Build Foundation• Assemble Turbine
• Operate facility to ensure optimal output
• Maintain facility to ensure optimal efficiency
• Mackinaw Power• Landowners• Local government/
community leaders• State Regulators• Power Purchasers• Meteorologists• Consultants
• Mackinaw Power• Project Finance
Company• Investment Bank• Equity Investors• Debt Houses
• Mackinaw Power• Turbine Manufacturer• O&M Service Provider
• Mackinaw Power• Construction
Companies• Turbine Manufacturer• Local government
officials• Utility Personnel• ISO Personnel
Primary Players
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Mackinaw Power’s 11 Step Development Plan
Mackinaw PowerMackinaw Power’’s Roadmaps Roadmap
1. Select Site and Complete Leases2. Complete Independent Wind Studies3. Conduct Environmental Review4. Model Project Economics5. File Interconnection Study & Secure Agreement6. Build Community Support & Secure Permits7. Secure Power Purchase Agreements (PPAs)8. Initiate Project Financing9. Procure Turbines from Manufacturer10. Contract for Construction11. Plan for Ongoing Operations & Maintenance
Develop Develop & &
Finance Finance the the
ProjectProject
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Critical Success Factors to Secure Project Financing
Power Purchase AgreementsPower Purchase AgreementsExclusive Rights to High WindsExclusive Rights to High Winds
• Secure high potential wind sites• 18-24 months of wind data from
multiple locations• Meteorological expertise (on-staff or
under contract)
• 20-year Financiable PPA with a credit-worthy purchaser
• Approvals from the Public Service Commissions and PUCs
• Explore MISO & PJM Market Sales
Regulatory ApprovalsRegulatory Approvals
• Site zoning & permitting completed• Local township/county support• Regional planning support Earned• State-wide PSC/PUC and DEQ
support• Federal PTC Extension, 1/1/08 >
Connections to the GridConnections to the Grid
• Midwest Independent System Operator Interconnection Studies
• LGIA Negotiated & Executed• Facilities Agreements with MISO
and Local Utilities
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ID Wind Power Project Target Areas
See NREL and AWS True Wind Maps
Conduct Initial “Fatal Flaw” Study on Each Site
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Wind Potential (8-12% Losses)30-36% Capacity Factor: 100 – 42 GW
36-41% Capacity Factor: 2 – 0 GWTotal: 102 – 42 GW
Wind Potential (8-12% Losses)30-36% Capacity Factor: 123 – 161 GW36-41% Capacity Factor: 99 – 37 GW
42-46% Capacity Factor: 1 – 0 GWTotal: 223 – 198 GW
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Conduct Financiable, Independent Wind Studies
Utilize Meteorological expertise (on-staff or under contract) Secure High Potential Wind Sites
Secure 18-24 months of wind data from multiple locations
Test Tower Permits, Acquisition, Erection Per Protocols
Monitor and Analyze10 Second Data, 2008-2010 >
Determine the Net Wind Capacity Factor
Consider Micrositing: Liar, Sodar…
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Interconnection and Deliverability Through MISO, PJM…
Mackinaw City: 2001 Interconnection Study > Interconnection Agreement
Financed Interconnection Study
Determined Facilities & Upgrades Required for Safe Interconnection
Built Collection/Distribution System to Meter
Financed Dedicated Circuit to Mackinaw City Substation
Three Phase, 14.4/24.9 kV Interconnection $250,000
VARS Charges offset Gross Income
Positron Required; Harmonics Analyses; Monitored with SCADA by Vestas & Operator/Owner with Scheduled, Proactive, Preventative Maintenance
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Mackinaw City Metering
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Mackinaw City Substation
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Mackinaw City Substation 14.4/24.9 kV
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Strategy to Interconnect to MISO and Sell Power Into MISO
Plan and File Interconnection Study Request
Work with Independent Engineering Firm and Staff to Secure MISO Feasibility, Stability/Short Circuit, System Impact and Facility Studies
Negotiate and Execute Large Generator Interconnection Agreement (LGIA)
Negotiate and Execute Facility Agreement(s)
Study and Plan to Sell Power Into MISO
MISO Interconnection QueueMISO Interconnection Queue
MISO Market
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Strategy to Secure Firm-Priced PPAs with Creditworthy Off takers
Pass MI RPS
Explore Alternatives
Negotiate Firm-Priced PPAs with Creditworthy Off takers
Explore MISO/PJM Sales
MISO Constraints Impact on PriceProvides Potential Markets
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Wind Power Business Case
Long-Term, Competitive Price Stability, 2008-2028 >
Diversifies Generation Portfolio, Simple Interconnection Adds Power Quality, Voltage Support and VARS to the Grid
Conserves and cuts price of Natural Gas
Technological Advances: Creating 21st Century Manufacturing Jobs and New Industry…”Bridge Technology” to the Hydrogen Economy
Community Empowerment: Lease Payments Protect Family Farms
Clean, Zero-Emissions; No Air, Water or Waste Pollution
Tourism: Mackinaw City = Michigan’s No. 1 Tourist Destination
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Wind Power Stimulates 21st Century Technologies &
Michigan’s Manufacturing Capacity
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Wind Power Projects Will Spur Michigan Manufacturing
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Wind Power Projects Economic Impact8,500 Jobs for Michigan
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Protecting Prime Farmland for Future Generations
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Why We Are Creating Wind Power
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Wind Power Web Resources
Michigan Sustainable Energy Coalition www.michigancleanenergy.com
AWEA Web site: http://www.awea.org
Wind Energy Works! www.windenergyworks.org
NWTC Web site: http://www.nrel.gov/wind
Mackinaw Power: www.mackinawpower.com
National Wind Coordinating Committee: http://www.nationalwind.org
Utility Wind Interest Group site: http://www.uwig.org
WPA Web site: www.Windpoweringamerica.gov
Consumers Energy www.consumersenergy.com
Windustry Project: http://www.windustry.com
MPSC: www.michigan.gov/MPSC
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Introducing Jennifer
Auto Industry Losses
Al Gore’s 100% Plan in 10 Years! By 2018
Rust Belt Cities can be the Phoenix to rise from the Ashes
Are we a Turtle on Its Back? Mackinaw = Algonquin for Turtle
Sailing a Better Course…
Quote Yogi Berea “The Future Ain’t What It used To Be!”
