GenerationHub Webcast Q1 2015
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Transcript of GenerationHub Webcast Q1 2015
![Page 1: GenerationHub Webcast Q1 2015](https://reader034.fdocuments.in/reader034/viewer/2022042702/55d274b9bb61eba4208b457c/html5/thumbnails/1.jpg)
GenerationHub Quarterly Market Update February 19, 2015 Wayne Barber, Chief Analyst, GenerationHub Barry Cassell, Chief Analyst, GenerationHub Kent Knutson, Director Hub Services, PennWell Corporation
Sponsored by
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Power Generation Drivers and Uncertainties
• EEI estimates record capital expenditure spend in 2014 at $103.3bn – 58% on non-T&D projects
• MATS compliance is in full swing – extensions, retirements and emission control projects in the news
• What changes are in store for EPA CPP emission standards now that the comment periods are over?
• Tax incentives for renewable energy are still up in the air • Eye on natural gas – little under construction so far
despite big build-out planned; are the economics there? • What do rock-bottom crude oil and natural gas prices
mean for power generation in terms of infrastructure development?
• How will distributed generation influence development?
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• GenerationHub is tracking $128bn (127 GW) in planned and under-construction natural gas projects and growing . . .
• Utility scale solar and wind continue to expand
• Solar 16.0 GW in development next three years • Wind 28.9 GW from 2015 to 2018 alone, with
about 16.9 GW in 2015 alone – though some will likely be completed in 2016 and beyond
• Nuclear 14.8 GW planned between now and 2024 • RPS update . . .4 states set to comply in 2015 and
some repealing or delaying including OH and WV
Gas, Solar and Wind Dominate the Future
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US Current Electric Capacity First Year Online by Fuel Type (MW)
• Gas, Wind and Solar Continue to Dominate the New Generation Landscape
Investment 2015-17 • Gas: 85.7 GW (63%) • Wind: 26.9 GW (20%) • Solar: 16.1 GW (12%) • GWS: 128.7 GW (95%) • All: 135.3 GW
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Planned Generation by Fuel (MWs)
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Planned Gas Power by NERC Region – MW
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Nuclear in the News
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Nuclear in the News
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EPA’s Clean Power Plan
• More than 2 million comments on new power plant
rules (111b) and 3.5 million comments on existing power plant rules (111d) – with all this input what changes will the EPA suggest?
• January 7, 2015 the EPA announced a delay in rolling out the final rules covering new power plants
• Numerous states, companies and industry groups claim the interim goals (2020) are unobtainable citing double digit increases in electric rates
• Summer 2015 will reveal all . . .
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Clean Power Plan in the News
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Clean Power Plan in the News
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MATS Compliance in the News
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MATS Compliance in the News
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Gas Repower/Refuel Projects in the News
• GenerationHub tracking
28 plants (53 units) accounting for 15.2 GW
• 14 Units expected online in 2015
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Planned Gas Pipelines in the News
• GenerationHub tracking
42 pipeline projects – 32 last webcast
• Estimated investment of $21.6bn
• The majority planned to come online between 2016-18
• Virginia Southside, Florida Southeast Connection and Citrus County Line
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Coal Plant Retirements by ISO/RTO 2010 to 2020 – MW
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Near-Term Impact of Coal Plant Retirements on Energy Supply Curves (PJM, 2015)
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US Wind Power Capacity – Annual and Cumulative (MW)
• Renewed 10 times since 1992 – 2.3 cents/kWh
• HR 5771 extends PTC another year
• January vote to extend 5 years voted down 47-51
• Requires construction start by end of 2014
• ITC set to expire in 2016 – could affect solar development
RPS (Renewable Portfolio Standards) and the PTC (Production Tax Credit)
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2016 Budget Request
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President’s 2016 Budget
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Growth in Solar PV Power (MW) – 2008 to 2013
• WoodMac – “Solar could be the next shale”
• 2014 estimated at 2.5 X 2012 – 89% PV
• Costs continue to fall -- since 2010, module cost down from 40% to 20% of installation price
• CA, AZ, NC and NV leading the charge
• Nearly 17 GW Operating – 31 GW under construction or in development
• NC has 3.2 GW under development
• Apple – $860 in solar, Google – $1.5bn solar and wind
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• Crude Oil Futures for March delivery around $50/barrel • Doesn’t reach $60 until February 2016 • Only gets to $71 for December 2023 deliveries
• HH Natural Gas spot prices $2.69/mmBtu – not above $4.00 until January 2020
• Iron Ore 62% Fe CFR China • November/2014: 84.0 • February/ 2015: 58.38
• Lower commodity prices will lower the cost of infrastructure construction
• The “Tale of Two Regions”: on February 10, 2015 • Northeast (gas $8.50 and power $83.70) • Northwest (gas $2.06 and power $13.50)
Low Sustained Fuel Prices . . .
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RECENT TRENDS US Electric Utility Fuel Mix – Electric Generation
Most Recent 12 Months – Ending November 2014
Change Change Last 12 months Nov 13’to14’ Gas 1.0% 0.6% Coal 1.8% -1.6% Oil 42.9% 1.7% Nuclear 1.1% 0.3% Hydro -4.9% 5.2% Renew 9.6% 17.3%
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Trends in Average Delivered Price of Coal and Natural Gas to US Electric Power Plants
Most Recent 12 months ending November, 2014 compared with same period in prior year: Electric Utilities • Coal flat at $2.38/mmBtu • Gas up 16.4% to $5.19 Independent Power Producers • Coal up 1.4% - $2.24/mmBtu • Gas up 18.9% to $4.96 Electric Rates • Residential up 2.9% to 12.5 c/kWh • All Customers up 3.6% to 10.4
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Electricity and Gas Price Disconnect
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What can we expect going forward?
• The EPA Clean Power Plan will change based on comment period feedback – 2020 goals will likely decline
• PTC/ITC extension will be extended but with phase out period over 5 years
• Growth in distributed generation will continue to grow • Gas power will be front and center stage over the near term • Lower oil and gas prices will result in infrastructure
construction benefits – lower commodity prices and lower electric fuel prices – but electric rates overall will continue to increase
• 2015 will be a year to remember . . . .
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Questions and Answers
At this point we would like to field questions . . . .
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Thank You for Attending . . . .
To find out more about GenerationHub and to schedule a demonstration of our online intelligence service call or email . . . Laura Kresse (918) 831-9731 [email protected] And don’t forget GenForum at POWER-GEN Natural Gas . . .