Western Market Spotlight - Center for Resource...

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Western Market Spotlight R E M 2 0 1 6

Scott Eidson P R E S E N T E D B Y :

October 17, 2016

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3Degrees Inputs & Assumptions

Key Drivers

Market View

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3Degrees

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C L I M A T E

S E R V I C E S

C O N S U L T I N G

We connect people with cleaner energy on a massive scale through:

R E C S A N D

C A R B O N

O F F S E T S

G R E E N P O W E R

& S H A R E D

R E N E W A B L E S

P R O G R A M S

C O M M U N I T Y

S O L A R

R E N E W A B L E

E N E R G Y

T R A N S A C T I O N S

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Solutions tailored to your goals

+ Customized Solutions

+ Flexible products

+ Structured transactions

+ Risk management

+ Advisory services

+ Additionality

+ $/REC = Independent Variable

+ Huntington Wind, Blue Basin Power & more

+ Compliance Markets + WECC, PJM, IL, TX, NC,

NEPOOL

+ Innovative & Impactful Projects

+ Ridgewood Green, Coastal Wind

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Inputs & Assumptions

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REC market fundamentals are universal MODELING

Note: Fungibility diagram, size and overlap are for illustrative purposes only and does not represent actual quantities and proportions of multi-qualified RECs.

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Inputs and assumptions dictate results

MODELING

+ Data: BNEF, EIA, WREGIS, CRS

+ IRPs

+ Supply estimates + actual generation

+ Multi-fuel facilities - % renewable

+ Aggregated prices

+ Market Activity

+ Compliance Reports

Supply

+ Current regulatory structure

+ Regulatory Changes

+ Facility eligibility starts with online date

+ Program Eligibility

+ ITC/PTC

+ Renewable Development Pipeline

Demand

+ Current regulatory structure

+ Regulatory Changes

+ Voluntary Demand

+ Efficient Banking

+ Market prices and ACPs

+ Demand elasticity

Inputs Assumptions

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Key Drivers

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Uncertainty remains the story POTENTIAL IMPACT OF MARKET CHANGES

+ Clean Power Plan

+ CAISO Expansion

+ Liquidity

+ PTC/ITC Extension

+ Flexible Banking

+ Imports

+ Transmission

+ Clean Power Plan

+ CAISO Expansion

+ Liquidity

+ WA Clean Air Rule

+ Green-e Changes

+ OR RPS

+ CA RPS

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The story isn’t all about California anymore

WASHINGTON & OREGON

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W A

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Common to both

+ Robust Voluntary market

+ Overlapping geographic constraints

+ CA RPS demand

+ CAISO expansion

+ Renewable potential

+ RPS Expansion

+ Banking

+ “Bundled” requirements

+ Clean Air Rule

+ Increasing Demand

+ Potential RPS Expansion?

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Market View

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WECC Supply & Demand FUNDAMENTALS

GWh

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Oregon exemplifies this puzzle FUNDAMENTALS

GWh + Banking

+ IOU procurement strategy

+ CAISO Expansion

+ External Influences

Banked Supply

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Geographic fungibility

FUNDAMENTALS

S U P P L Y & D E M A N D

Renewable MWh by State

Compliance Demand by State (MWh)

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FUNDAMENTALS

CALIFORNIA SOURCING

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FUNDAMENTALS

O R/WA SOURCING

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FUNDAMENTALS

MT/NM/CO/NV SOURCING

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FUNDAMENTALS

W E C C S O U R C I N G

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Renewable Supply by State

SOURCING & SUPPLY

WECC Sourcing

FUNDAMENTALS

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FUNDAMENTALS


Current Environment TransWest Express Scenario

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FUNDAMENTALS


Current Environment Expanded Sourcing Scenario

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FUNDAMENTALS


Current Environment CAISO Expansion Scenario #1

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FUNDAMENTALS


Current Environment CAISO Expansion Scenario #2

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FUNDAMENTALS


Current Environment Poor Generation Year Scenario

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Buckle your seatbelts SUMMARY

+ Uncertainty, uncertainty and uncertainty

+ Period of increased volatility

+ Flexible banking provisions smooth short-term imbalances but magnify uncertainty

+ Regulatory change is upon us

27 3degreesinc.com

Scott Eidson

Thank You

Vice President, Environmental Markets

[email protected]

415-674-1685

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