New York’s
Energy Challenges 2010
Gordon Boyd, EnergyNext, Inc.
For
Municipal Electric and Gas AllianceSM
www.megaenergy.org
April 16, 2010
Good News and Bad News
1.
2.
3.
4.
5.
6.
Historic low energy prices…today.
Regional differentials penalize consumers
Cap and Trade: upside for NY.
Energy infrastructure agenda.
Energy market trends.
Consumers have the responsibility to
choose.
Energy Priorities 2010
Why are prices low?
 Demand destruction: The Great
Recession (Bad news)
 Speculators out of market (Good
news)
 Natural gas supplies are up.
Unconventional, shale gas. (Good
news)
Energy Priorities 2010
Wholesale Power Prices at Historic
Low in 2009 (NYISO)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Load
GWh
428
430
435
433
438
458
444
458
452
435
Av.Electric
$/MWh
$58.26
$51.22
$49.90
$62.58
$62.80
$93.83
$76.45
$80.29
$95.31
$48.63
Energy Priorities 2010
Av.NatGas
$/MMBtu
$5.52
$4.54
$3.85
$6.48
$6.80
$10.01
$7.36
$8.50
$10.13
$4.87
Wholesale Electricity Price Trend
2000-2009 (Average, NYS)
Average Wholesale Electric prices $/MWh (NYISO 2010)
$120.00
$100.00
$80.00
$60.00
Price $/MWh
$40.00
$20.00
$2000
2001
2002
2003
2004
2005
2006
Energy Priorities 2010
2007
2008
2009
Wholesale Natural Gas Price Trends
2000-2009 (Average, NYS)
Average NatGas Prices $/MMBtu
$12.00
$10.00
$8.00
$6.00
NatGas$/MMBtu
$4.00
$2.00
$2000
2001
2002
2003
2004
2005
2006
Energy Priorities 2010
2007
2008
2009
Total Electric Demand
NYS 2000-2009
Load GWh (NYISO 2010)
465
460
455
450
445
440
Load GWh
435
430
425
420
415
410
2000
2001
2002
2003
2004
2005
2006
Energy Priorities 2010
2007
2008
2009
NYMEX Natural Gas Prices
Natural gas storage trend, last
24 months (USEIA) ((CAUSE))
Energy Priorities 2010
Another form of NGas storage
((Cause))
Energy Priorities 2010
Growth of Unconventional NGas
((Cause))
Energy Priorities 2010
US shale activity picks up
(www.rigzone.com) Index to 100 Jan08
Energy Priorities 2010
Electric fixed price trend
4/15/2010 ((Effect))
Energy Priorities 2010
January 3, 2010, 1 p.m.
Energy Priorities 2010
January 6, 2010, 9 a.m.
Energy Priorities 2010
Upstate NY Pricing Factors
 Transmission congestion, East-West
 Supply: Adequacy of nearby
generation
 Demand: Stability, growth or decline
Energy Priorities 2010
3 Congestion Points
Projected cost: 2009 - 2018
 Leeds-Pleasant Valley Zones F-G:
 $1,307,000,000
 Mohawk Valley Zones E-F
 $567,000,000
 West-Central Zones B-C
 $230,000,000
Energy Priorities 2010
Historic Cost of Congestion
(NYISO)
 2004: $833,000,000
 2008: $2,613,000,000
 2009 (1Q): $233,000,000
Energy Priorities 2010
Recent projects November 2009
 Linden transmission, GE developer,
300 MW between PJM and NYISO
 Dover, 1,000 MW nat gas. Advance
Power AG
 345KV underwater connection
Bayonne, NJ to Gowanus-Brooklyn
 Stephentown 20MW flywheel, Beacon
Power. “Smart Grid Tech.”
Energy Priorities 2010
Champlain-Hudson
Power Express
 2,000 Megawatts
 Under water,
underground
 355 miles to
NYC/NE
 Hydropower and
wind sources
 Outside existing
energy routes
Energy Priorities 2010
Cap and Trade:
Impact on New York ratepayers
 Carbon tax will raise price of coalfired generation.
 Other states are more dependent on
coal than New York.
 Electric prices will normalize.
Energy Priorities 2010
New York vs U.S.
 New York State 15.27 cents/kwh
 U.S. average
8.90 cents/kwh
Energy Priorities 2010
Pennsylvania Electric
generation fuel mix, Nov. 2009
Coal
Petroleum
Natural Gas
Nuclear
Renewables
Energy Priorities 2010
Ohio Electric generation fuel
mix Nov. 2009
Coal
Petroleum
Natural Gas
Nuclear
Renewables
Energy Priorities 2010
NY State Electric generation by
fuel source Nov. 2009
Coal
Petroleum
Natural Gas
Nuclear
Renewables
Energy Priorities 2010
New York wind resources
Energy Priorities 2010
Renewables by 2015
(NYS Energy Plan)
Wind (1,280MW as of 2009):
 On shore 7,993 MW
 Off shore 534 MW
Solar PV: 100 MW (14.6MW as of 2006)
Total NYS peak electric demand 2008:
+/- 38,720 MW (USEIA)
Energy Priorities 2010
Wind Power Challenges
 Balancing, storage and ramping
 Need for energy storage technologies
 Coordination among regional grid
operators to manage variable flow
Energy Priorities 2010
Private Investment in
renewables
Energy price hedge
 On-site, behind the meter, PPAs
 Bi-lateral deals between consumers
and developers
Green marketing
 Renewable Energy Credits (RECs)
Energy Priorities 2010
…What’s next?
NYS Energy Plan encourages
1. New capacity, both Generation and
Transmission.
2. Fuel diversity, especially renewables.
3. Clear signals to consumers from
energy markets to induce efficiency.
Energy Priorities 2010
Other policy initiatives
under way
 Smart metering – Installations began 2008.
 Net metering – Customer sited generation
banking.
 Article 10 - One-stop permitting expired
2002. Is renewed effort in store?
 Federal ARRA funding, block grants
Energy Priorities 2010
Consumer Choices
and Responsibilities
 Shop for energy supplies, price, rate,
tax savings. Pay less.
 Energy efficiency, SCR, NYSERDA
programs. Use less.
 Federal incentives, tax credits for
efficiency and renewables
Energy Priorities 2010
QUESTIONS?
www.megaenergy.org
Energy Priorities 2010