affordable renewable wind energy generated in mississippi 17, 2016 · o developed the nation’s...
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AffordableRenewableWindEnergyGeneratedinMississippi
August17,2016
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NationsEnergySolutions
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NationsEnergySolutions• NESisarenewableenergydeveloperfocusedonthesoutheasternUnitedStatessince
2011,withprojectsandassetsin16states.o SeanRoberts,CEO– Constructedover3,700windturbinessince1983o BobBergstrom,President– Developedover2,500MWofwindacrosstheUS.
• NESsecuredawindenergyleasewiththeStateofMississippifortheParchmanStatePenitentiarylandsin2013
• MemberoftheDeltaCouncil• MemberoftheMississippiEnergyInstitute(MEI)
LedbySeanRoberts,CEO&nativeofStarkville,MS:• BornandraisedinStarkville,MS• FatherwasaprofessoratMSU• WifebornandraisedinGreenville• Manyfriendsandfamilyinstate
“IintendtobringwindenergytomyhomestateofMississippi”- S.Roberts
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Terra-Gen&NationsEnergySolutions
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Terra-Genhasexperienceinallfacetsofpowergeneration– development,financing,construction,andoperations
• Terra-GenandNESPrincipalso RandyHoyle,SeniorVP,HeadofWindandSolarDevelopment,Terra-GenPowero SeanRoberts,CEO,NationsEnergySolutions(NES)o BobBergstrom,President,NESo TeamhasdevelopedthefirstwindprojectsinKansas,Oklahoma,NewMexico,
NorthDakota,SouthDakota,PuertoRico,and2nd windprojectinIowa
• Terra-GenisaleadingU.S.-basedpowergenerationanddevelopmentcompanyownedbyEnergyCapitalPartners,aleadingfinancialsponsorwithaproventrackrecordinthepowergenerationmarketo Terra-GenisfocusedontheNorthAmericanmarketandowns1051 MWs(net
equity)ofwind,geothermalandsolargeneratingcapacityinoperationacross25renewablepowerfacilitiesthroughouttheUnitedStates
o Operateandmaintainofover2,000MWofrenewableprojectso Developedthenation’slargestwindenergyproject,theAltaWindEnergyCenter,a
$3billion1,546MWmulti-phasedwindprojectlocatedinCalifornia
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OverviewofIn-StateRenewableProjects
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Renewableprojects(windandsolar)havebeenindevelopmentsince2011• SeveralprojectsunderdevelopmentthroughouttheMississippiDeltasince2011,
chieflytheParchmanWindo ProjectsinSunflower,Tunica,Panola,Coahoma,andWashingtonCounties
FocusonParchman:KeyDates• March2012 – SuccessfullychangedMSlawtoallowmulti-yearleaseonstate
propertyforrenewableenergyprojects• September2013– RFPissuedbytheDepartmentofFinanceandAdministrationfora
ParchmanWindEnergylease• December2013– NESselectedinDFARFP• Spring2014– Finalizedleasewithfinanceabletermsforroughly14,000acres• February2015– ExecutedleasereceivedbyNESandpaymentforyearonereceived
byDFA• April2015– MeteorologicaltowerinstalledatParchman
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PARCHMAN WIND Local Economic Impacts
Based on 150MW of Wind Energy: * Requires NO investment from community. Terra-Gen NES can generate an economic impact model to depict full economic impact into specific communities of Mississippi
Landowner (State of MS) Royalty – 150MW x Landowner royalty payments of roughly $32 million over 25
years x Each turbine (75) takes approximately ¼ – ½ an acre out of
production
Construction – 150MW x Peak workforce of 250-300 people for 8-9 months of construction x Ancillary spend of $2-3 million (hotels, food, etc.) during
construction
Property Tax – 150MW x In-State Wind Energy investment of $300 million into the local
property tax base will yield roughly $30 million in revenue over a 25-year period
Permanent Jobs – 150MW Attracts high performance work force of 12-15 individuals
Tourism & Development x Demand to see projects will draw local residents and schools,
including neighboring states without wind projects x Wind tech training program can be implemented at a local tech
college/school
Good for the Environment, the Economy, and the Energy Consumer x Good for health of the citizens of Mississippi
Utility Benefits
i. Promotes economic development in state – will bring hundreds of millions of dollars of tax base, landowner royalty payments and a high-performance workforce
ii. Fixed-price hedge against future energy and commodity price volatility iii. Diversifies utility’s in-state generation mix by procuring in-state renewables at a low cost
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TheBasicsofWindEnergy
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FourBasicsofWindDevelopment1) Land
o NEShassecured150+MWofwindpotentialattheParchman StatePenitentiarysiteo MultipleothersitesbeingpursuedthroughouttheDeltasince2011
2) Windo Resourceiscomparabletootherstateswithsignificantwinddevelopmento Over5yearsofdataatfivelocationsindicateacommerciallyviablewindresource
3) Transmissiono Criticaltoinitialprojectsiting,multiplesatisfactoryoptionsavailableo Parchman projectinMISOQueue
4) Marketo Emergingmarket
RequiredElementsv Permittingv Financing
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AdvancesinTechnology
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Twosignificantchanges:1. Turbinehubheightswere65meters10yearsago– theycanbe129mtoday
o Substantialincreaseinwindresource-- Speedsincreasesignificantlywithheight2. Turbinesaremuchmoreefficientthan10yearsago
Performanceofawindfarmdependson:• Hubheight:WindspeedintheRotorSweptZone• 8760:Shapeofwindproductionprofile• Turbineselection:Low-gearturbinesforlower
windspeedareas
Blades• Increasedrotordiameter,lighter• Evolutionfrom65mto126m
Gearboxes• Moreefficient,lowermaintenance
InstallationEngineering• Betterengineeringtolowerinstallationandcapitalcosts
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WindinMississippi?
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AcceptedwisdomhasbeenthatwindsarenotsufficientinMississippi…• So,what’schanged?
Technology• Tallertowers&
largerrotors• Turbinesspecifically
designedforlowwindregimes
• Improvedsiting&layoutmodelingsoftware
EconomicsofWind• Priceisafunctionof
capitalcosts,constructioncosts,andcapacityfactor(NCF)
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MississippiWindResourceEvaluation
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Top2Anemometers+Vane
Mid2Anemometers+Vane
Lower2Anemometers
GroundTemperature,Pressure
andLogger
MeteorologicalTower MetTowerSchematic
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WhyRenewables?
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WhyshouldUtilitiesInvestinRenewables?• Fixed-PriceHedgeagainstfutureenergyandcommoditypricevolatility.
• Pricecertaintyfor20-25years.• IncreasedDiversityofutility’sin-stategenerationmixbyprocuringin-state
renewablesatalowcost.• EconomicDevelopment
• Jobs,taxbase,royaltypayments• RegulatoryHedge
• CompliancewiththeCleanPowerPlan,August2015• AddedRateBase– (assumingownership)• DecliningProductionTaxCredit(PTC) – Declinesfrom100%tozeroover5years
WhyshouldCommunitiesInvestinRenewables?• Abundantsupplyoflocallygenerated,affordableelectricenergy• Healthbenefitsofzero-emittingelectricgenerationarequantifiable• Significantinvestmentinruralcommunitiesnopublicfundsfundsrequired• Jobcreationandtrainingforarapidlyexpandingindustry
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PhotographicIntroductiontoWindEnergy
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RoadConstruction
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TrenchingforCollectionSystemFoundation
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TurbineFoundation
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TurbineFoundation
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TurbineFoundation
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TurbineFoundation
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TurbineFoundation
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TurbineFoundation
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TowerSection
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TowerConstruction
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TowerConstruction
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TowerConstruction
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TowerConstruction
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TowerConstruction
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TowerConstruction
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TowerConstruction
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TurbinesBlades
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TurbineBlades
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Blade&RotorAssembly
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FinalAssembly
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TimetoExamineWindGeneratedinMississippi
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NowistheTimetoConsiderWindinMississippi• Absentasafeharbor,100%federalPTCvalueerodes20%(about$8/MWh)in2017
o PTCvaluedrops20%morein2018o SafeHarborfor100%valueisstillpossiblethisyear,howevertimeexpiresvery
soon• Priceofnaturalgasislowandawindisanaturalhedgeagainstfuturegasprice
volatility• Lowcostlocalwindtodayshouldbefavoredovertheuncertaintyandchancefora
marginallycheaperwindproductthatcouldsomedaybeimportedfromanotherstate• Regulatoryuncertaintymeanspricesforbothmajorequipmentsuppliersandlabor
arelow• SignificantsupporttotheDepartmentofCorrectionsBudget(atParchman)with
annualroyaltypaymentsfromturbineproduction