Lessons for the Clean Energy Transition from CAISO’s Root Cause Analysis Report of the Summer 2020 Heat Storm

On August 14 and 15, 2020, California’s Independent System Operator (CAISO) directed utilities to initiate rotating outages (i.e., load-shedding) due to constrained grid conditions, which resulted in hundreds of thousands of Californians experiencing rolling blackouts. Subsequently, CAISO, California Public Utilities Commission (CPUC), and California Energy Commission (CEC) jointly released the Preliminary Root Cause Analysis: Mid-August 2020 Heat Storm on October 6, 2020 at the request of Governor Newsom.

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Merchant Energy Storage Coming of Age in North American Power Markets

Recent announcements in Texas and Alberta are signalling the coming of age of energy storage – particularly battery energy storage systems (BESS) in North American power markets. This is demonstrated by the increasing amount of large, grid-connected BESS being financed and developed on a merchant basis rather than relying on utility off-take agreements.

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EV Charger Industry Sees First Major IPO – ChargePoint

When the electric vehicle charger company ChargePoint went public on September 24, 2020 through a reverse merger, there were a lot of investors celebrating the $2.4 billion valuation (enterprise value) that the company achieved.  The company had backers from the oil & gas, utilities and automotive industries including US firms Chevron and AEP and European firms Daimler, BMW and Siemens.  There was also a wide range of venture capital and private equity investors including GIC and Canada Pension Plan Investment Board.

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 Large Scale Renewables Procurement on New York State’s Path to 70% Renewable Energy by 2030 and 100% Carbon-Free Electricity by 2040

While the announcement of combined solicitations for 4,000 MW of offshore wind (NYSERDA) and land based renewables (NYSERDA & NYPA) on July 21, 2020 was historic, this is the continuation of a ramp up in renewables procurement in New York State and indicative of what is required for the state to meet its goals established in the Climate Leadership and Community Protection Act. In the last three years, 2017-2019, NYSERDA has contracted about 6,000 MW of large scale renewables. The state’s procurement will not stop in 2020. NYS will continue to be an attractive market for clean energy development offering opportunities for long term contracts.

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Recent New York White Paper Proposes Addition of Tier 4 (Renewable Energy Deliveries into New York City) to the Clean Energy Standard

Last month the New York State Energy Research and Development Authority (NYSERDA) and New York Department of Public Service (DPS) published a White Paper on Clean Energy Standard Procurements to Implement New York’s Climate Leadership and Community Protection Act. This White Paper aims to provide a framework to better align the state’s Clean Energy Standard (CES) with its Climate Leadership and Community Protection Act (CLCPA) passed in 2019 while also utilizing the existing CES procurement structure to achieve the state’s target of 70% renewable energy by 2030. In part, within this White Paper NYSERDA and the DPS staff propose the addition of a Tier 4 to the CES in order to promote greater renewable energy delivery into New York City (NYISO Zone J).

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New England Class I REC Market Update

While most Class I REC markets across the country are generally oversupplied, the smaller New England Class I REC market stands apart as recent events have driven prices dramatically higher over the last year. In fact, 2019 vintage Class I RECs have climbed all the way from $7/REC a year ago to about $40/REC today, a stunning 5.7x increase. This suggests a shortage of RECs available in the marketplace to compliance entities who need to meet state Renewable Portfolio/Energy Standards. The main factor influencing the REC market is the anticipated timing of completion of a series of large offshore wind projects.

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Power Advisory LLC Kicks Off Procurement Process for Tidal Energy in Nova Scotia

Toronto, Ontario, November 6, 2019 – Power Advisory LLC (Power Advisory) has initiated the procurement process for an in-stream tidal energy demonstration project in Nova Scotia, which offers one of the largest tidal energy resources in the world.

In October Power Advisory was appointed as the Procurement Administrator for this procurement process by the province of Nova Scotia. As Procurement Administrator, Power Advisory will be responsible for ensuring that the procurement is fair, transparent and competitive. The province will consider projects with nameplate capacity of no more than four megawatts. Projects are to be restricted to Berth D within the Fundy Ocean Research Centre for Energy (FORCE) marine renewable-electricity area. Project selection and subsequent awarding of a Marine Renewable-Electricity Licence and Power Purchase Agreement is conditional upon providing adequate financial security for the retrieval and disposal of the abandoned CSTV turbine at the site. Power Advisory expects to open the Call for Applications process in the near future, concurrently with the request for approval of the Power Purchase Agreement from the Nova Scotia Utility and Review Board.

Interested parties that would like to participate in the procurement process should register at the tidal energy procurement website. https://nstidalrenewables.poweradvisoryllc.com/

Further details regarding the procurement process will be shared with parties that have registered on the website shortly. The procurement objectives are to achieve the best value for Nova Scotia ratepayers and to support the advancement of Nova Scotia’s marine renewable energy sector.

Power Advisory is a leading North American management consulting firm offering extensive knowledge of the Nova Scotia electricity sector and has deep expertise in renewable energy competitive procurements. Power Advisory previously served as the Renewable Electricity Administrator in Nova Scotia, overseeing the 2012 Request for Proposals (RFP) for 300 GWh of renewable energy from Independent Power Producers (IPPs).

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Power Advisory adds Andrew Kinross to its team

September 24, 2019 – Power Advisory LLC, a leading North American management consulting firm that specializes in electricity sector matters and solutions, is pleased to announce the addition of Andrew Kinross as Director based in Boston. Andrew will be augmenting the leadership team at Power Advisory, helping to grow the firm’s business across the US and Canada.

“We’re excited to bring Andrew on board with his extensive experience in renewable energy, particularly in solar and wind, and many other emerging energy technologies such as energy storage, microgrids and EVs” said John Dalton, President of Power Advisory.

Prior to Power Advisory, Andrew spent 15 years in the Energy Practice at Navigant Consulting, where he helped build the renewables and Distributed Energy Resources businesses, which consistently grew throughout his tenure. Andrew worked mostly in North America but his consulting work also took him across Europe, Asia and the Middle East where he worked on several of the firm’s largest international assignments.

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Massachusetts DOER Clean Peak Standard Update

On August 7th and 9th, the Massachusetts Department of Energy Resources (DOER) held informational meetings on the development of the Clean Peak Standard (CPS), which would require retail energy suppliers to procure a portion of their supplies from clean energy resources produced (either through generation or energy storage) during defined peak periods.

During these meetings a summary of the draft regulation was reviewed, which highlighted key features of the program. Further details are covered in our post linked here, and downloadable below.

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US OSW Project Construction Pinch Points

Two weeks ago New York State announced that they were negotiating contracts with two OSW projects totaling 1,696 MW, with 2024 commercial operation dates (COD), a year when additional 1,348 MW is scheduled to enter commercial operation: Ørsted US Offshore Wind’s (Ørsted’s) 1,100 MW Ocean Wind Project and US Wind’s 248 MW Maryland project. With this the US Northeast/Mid-Atlantic has awarded or is anticipated to award this year OSW contracts representing over 6,000 MW. These are shown by their anticipated COD and developer below.

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Recently Enacted Legislation Opens Up New Renewable Generation Development Opportunities in Maine

Since Janet Mills was sworn in as governor in January and the democrats had also secured control of both chambers, the expectation was that 2019 was going to be a big year for climate and clean energy in Maine. This has certainly turned out to be true. As an early action, Governor Mills issued Executive Order 3 FY 19/20 to conclude the Maine Wind Advisory Commission and wind permit moratorium that had been in place since the beginning of 2018. A flurry of legislation was also introduced addressing everything from net metering (re-instituted in March through L.D. 91) to electrification, the renewable portfolio standard, procurement targets and Aqua Ventus floating offshore wind pilot project.

Leading up to the adjournment of the legislative session on June 20th a number of these bills passed and were subsequently signed by the Governor. Most notable to renewable generation development in the state were L.D. 1494 and L.D. 1711, which are reviewed in the note. These offer direct opportunities for long-term contracts for new projects. Respectively, about 400-800 MW of utility scale renewables and 375 MW of distributed solar by 2024.

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Review of New Jersey Ocean Wind Project Pricing

This memo updates our review of the New Jersey Board of Public Utilities (BPU) Offshore Wind Renewable Energy Certificates (OREC) award to Ørsted US Offshore Wind’s 1,100 MW Ocean Wind project. The BPU made available its order and this provided additional details, which required that our earlier memo be updated. In this memo, we focus on the Ocean Wind contract pricing.

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New Jersey Awards its First Offshore Wind Renewable Energy Certificates Solicitation to Ørsted’s 1,100 MW Ocean Wind Project

June 21, 2019  –  Today the New Jersey Board of Public Utilities (BPU) unanimously approved the state’s first Offshore Wind Renewable Energy Certificates (OREC) award towards its 3,500 MW goal to Ørsted US Offshore Wind (Ørsted)’s 1,100 MW Ocean Wind project. Ocean Wind will be located in the federally leased New Jersey Wind Energy Area about 15 miles offshore Atlantic City, NJ. The commercial operation date for Ocean Wind is in 2024.

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Summary and Commentary on the Energy Storage Advisory Group 2019 Work Plan

For parties interested in: Energy Storage and Innovation in Ontario


  • The Independent Electricity System Operator (IESO) released “Removing Obstacles for Storage Sources in Ontario” report on December 19, 2018 based on consultation with its Energy Storage Advisory Group (ESAG).
  • On May 24, 2019, the IESO presented the 2019 work plan to the ESAG for addressing barriers to energy storage resources in the IESO-Administered Market (IAM).
  • The 2019 work plan includes two committed projects and four prospective projects.

See the full post in the button below.

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IESO 2019 Planning Outlook – Resource Adequacy Outlook

Report for clients interested in Ontario electricity system planning. Context:

  • The Independent Electricity System Operator (IESO) has enacted a new annual planning outlook, building on the 2018 Technical Planning Conference (TPC) held in September 2018[1].
  • The IESO hosted a stakeholder engagement on April 12th, 2019, on their resource adequacy outlook and to outline their approach to assessing supply need and available resources.
  • The resource adequacy outlook is a major component of the annual planning outlook the IESO intends to publish in Q3 2019; the annual planning outlook determines supply adequacy needs which will be used to inform Target Capacities for the Transitional Capacity Auctions (TCAs) and Incremental Capacity Auctions (ICAs).

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Tennessee Valley Authority 2019 Renewables RFP

On April 1, 2019 the Tennessee Valley Authority (TVA) issued a Request for Proposals seeking at least 200 MW of renewable energy. The RFP is open to either stand-alone renewable energy resources or renewable energy resources with battery storage. The Commercial Operation Date (COD) deadline is no later than October 31, 2022, and all proposals must be submitted to TVA by May 15, 2019. This announcement comes on the heels of TVA’s draft IRP and previous 2017 Renewable RFP, both of which indicate increased momentum by TVA to increase the amount of renewable energy in their resource mix.

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IESO Bulk Planning Process Engagement

Report for clients interested in Ontario electricity system planning. Context:

• Independent Electricity System Operator (IESO) is formalizing the integrated bulk system planning process.
• The Ontario system planning process will include an annual Ontario Planning Outlook
(OPO), a 3-year bulk transmission plan, and 5-year regional plans.
• The IESO hosted a stakeholder engagement on February 26th, 2019, to outline the next steps in the establishment of the new bulk planning process.

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Tennessee Valley Authority Draft IRP and Potential for Solar Development

Report for parties interested in solar development in the Tennessee Valley Authority.

Context: On February 15, 2019, the Tennessee Valley Authority (TVA) released their draft 2019 Integrated Resource Plan (IRP), which outlines potential capacity resource mixes over the next 20-years. The plan puts forth resource mix projections based on five different planning strategies and six scenarios for a total of 30 different outcomes. TVA will announce a preferred planning strategy after finalizing the IRP in summer 2019. Nonetheless there are still significant signals on future resource mixes within the draft plan. Notably, in contrast to an absence of any new capacity for coal, hydro, and wind, there is an increase in the share of solar across all projections, with differences between the amounts of utility-scale and distributed solar.

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IESO Energy Storage Advisory Group Recommendation Report Summary and Commentary

Report for parties interested in energy storage and innovation in Ontario. Context:

  • Independent Electricity System Operator (IESO) released “Removing Obstacles for Storage Sources in Ontario” report1 on December 19, 2018 based on consultation with its Energy Storage Advisory Group (ESAG).
  • The report focuses on identified obstacles and mitigating strategies to help ensure fair competition of energy storage resources in the Ontario electricity market.
  • IESO makes a series of recommendations to support the mitigating strategies in the report; recommendations are for the IESO as well as the Ontario Energy Board (OEB) and the Ministry of Energy, Northern Development and Mines (MENDE).

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Power Advisory Offers ISO-NE FCM Expertise

Ready to participate in the ISO-NE Forward Capacity Market? Or, need to understand the FCM as part of your development strategy, solicitation response preparation, or acquisition? Power Advisory can help you navigate the regions’ capacity market. With changes like CASPR and the forward nature of the market now is the time to understand the FCM.

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Three New Wind Energy Leases Offshore Massachusetts: Review of BOEM Auction Results and Competitive Implications

Over the last two days BOEM auctioned three leases offshore Massachusetts to Vineyard Wind, Mayflower Wind, and Equinor Wind. Vineyard Wind is a joint venture of Avangrid Renewables and Copenhagen Infrastructure Partners, with an existing Massachusetts lease and a contract for an 800 MW project with the Massachusetts electric distribution companies (EDCs). Mayflower Wind Energy LLC is an affiliate of Royal Dutch Shell Plc. and EDP Renewables; it is the first position in the US OSW market for both companies.[1] Equinor is a Norwegian energy developer that holds the rights to the only existing BOEM lease offshore New York. This sale attracted historic attention from 19 qualified parties and 11 bidders. At the end of 32 rounds the total acquisition fee was $405.1 million ($135.1 million Vineyard Wind and $135 million for the other two winning parties).

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Review of Atlantic Offshore Wind Procurement Policy and Developments

Over the last year major commitments have been made with respect to the US offshore wind (OSW) market. From only 30 MW operating, approximately 2,000 MW has been contracted and a cumulative +10 GW of installed capacity is now expected by the early 2030s. The growing interest in OSW has been concentrated in the Atlantic, particularly the Northeast which has the strongest state policies for OSW. An indicative schedule of this development by state is presented in the figure below. Power Advisory then provides a high-level review of the procurement processes in New England, New York, and New Jersey as the primary markets, representing about 80% of this total.

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Competitive Implications of Ørsted’s Acquisition of Deepwater Wind

Yesterday, Ørsted A/S (Ørsted) announced that it agreed to acquire Deepwater Wind (Deepwater) from D.E. Shaw & Co. LP for $510 million. With this acquisition Ørsted, who was unsuccessful in the various New England competitive procurement processes, will get access to Deepwater’s 5 PPAs and 810 MW contracted project development portfolio. The transaction is subject to review by US competition authorities, the US Department of Justice (DOJ) and the Federal Trade Commission (FTC). Given the nascent state of the US OSW industry the acquisition of one of the US industry leaders by the world’s largest OSW project developer may raise some competitive concerns, particularly when the lease holdings of the combined company are considered in several relevant geographic markets.

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Review of NYSERDA Request for Proposals for Purchase of Offshore Wind Renewable Energy Certificates

Last week, NYSERDA issued a draft Request for Proposals (RFP) to solicit 200 MW to 800 MW of offshore wind with proposals due in the Winter 2019. The draft RFP is in response to New York State’s Offshore Wind Master Plan that encourages the development of 2,400 MW of offshore wind by 2030.  The offshore wind projects will be procured in two phases to reach the 2,400 MW goal. Phase 1 entails procuring Offshore Wind Renewable Energy Certificates (ORECs) associated with approximately 800 MW of offshore wind. The New York Public Service Commission Offshore Wind Order authorizing NYSERDA to undertake this procurement further permits NYSERDA to award more than 800 MW in this first round of the Phase 1 solicitation if sufficient attractive offers are received.  The Phase 2 procurement will build on Phase 1 framework and seek to procure the remaining offshore wind energy to reach the 2,400 MW goal.

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Potential Asset Sale: Canadian Utilities Limited’s Generation Portfolio

On September 13, Canadian Utilities Limited (CU), a subsidiary of ATCO, announced that it would be exploring strategic alternatives for its Canadian electricity generation business. Canadian Utilities Limited is engaged in electricity (generation, distribution, and transmission), pipelines and liquids (natural gas transmission, distribution and infrastructure development), energy storage and industrial water solutions, and retail energy (electricity and natural gas retail sales). The company has 5,200 employees and assets of $21 billion.

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Review of Massachusetts Compromise Bill ‘An Act to Promote a Clean Energy Future’

On July 30, 2018, the conference committee appointed to reconcile the Senate and House clean energy bills finalized a compromise bill, H.4857. The bill’s contents more closely align with the House of Representatives bills passed last week (H. 4756 and H. 4739) than the omnibus Senate bill (S. 2545) (see Power Advisory’s report on the differences between the initially proposed bills). The House and Senate voted in favor of the bill on July 31, the last day of the legislative session.

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Review of Massachusetts House of Representatives Energy Bills Relative to the Senate’s ‘An Act to Promote a Clean Energy Future’

The Massachusetts House of Representatives passed two major energy bills on July 12, 2018. The bills address a subset of the legislation that was approved by the Massachusetts Senate omnibus clean energy bill (S. 2545) in June. The House bills are now in conference committee with the Senate and are expected to be reconciled ahead of the close of the legislative session on July 31.

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Review of NYSERDA’s 2018 Renewable Energy Standard RFP

On April 25, New York Governor Andrew Cuomo announced the second Request for Proposals (RFP) for large renewable generation projects under the Renewable Energy Standard (RES), a component of the Clean Energy Standard (CES). The solicitation will be conducted by the New York State Energy Research and Development Authority (NYSERDA). The RFP is for approximately 1.5 million MWh of Tier 1 Renewable Energy Certificates (RECs) per year. The CES was adopted in 2016 and calls for 50% of the state’s electricity to be generated by renewable energy resources by 2030 (also known as the “50 by 30” goal).

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BOEM ATLW-4A Proposed Sale Notice Published in the Federal Register

Earlier today, the Bureau of Ocean Energy Management (BOEM) released a Proposed Sale Notice (PSN) for the previously unleased commercial lease areas, OCS-A 0502 and OCS-A 0503, offshore Massachusetts. These lease areas represent the most immediate leasing opportunity for those who are interested in entering the Northeast offshore wind market, where states have already made commitments to procure almost 5,000 MW.

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Review of NYSERDA Renewable Energy Standard RFP 1 Results

On June 2, 2017 the New York State Energy Research and Development Authority (NYSERDA) issued the 2017 Renewable Energy Standard Request for Proposals (RESRFP17-1). The RFP was the first issued under the state’s Clean Energy Standard. The Clean Energy Standard requires that 50% of the state’s electricity come from renewable sources by 2030, representing about a doubling of the state’s renewable energy requirements. The standard puts an obligation on retail electricity suppliers to purchase increasing amounts of renewable energy to supply their customers. To assists these retailers in meeting their obligations, NYSERDA is required to support the development of large-scale renewable projects by issuing periodic requests for proposals (RFPs) to enter into long-term contracts (i.e., up to 20 years) with renewable energy developers. These RFPs provide for the purchase of renewable energy credits (RECs), rather than bundled energy and RECs.

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Exelon’s Proposed Retirement of its Mystic Plant: Ensuring the Attention of ISO-New England

Last Thursday, Exelon Generation (Exelon) announced that it had filed with ISO-New England to retire the Mystic Generating Station’s Units 7, 8, 9, and the Jet unit on June 1, 2022.  Exelon noted “absent any regulatory reforms to properly value reliability and regional fuel security, these units will not participate in the Forward Capacity Auction scheduled for February 2019.”  Mystic offers over 2,000 MW of capacity, making it the largest generating station in Massachusetts and one of the largest in New England.   ISO-New England reported that Exelon submitted delisted bids in the Forward Capacity Auction that was conducted in February.

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Review of Possible Massachusetts Clean Peak Standard

Last week, Massachusetts Governor Baker submitted legislation to the Massachusetts Senate and House, “An Act Promoting Climate Change Adaptation, Environmental and Natural Resource Protection, and Investment in Recreational Assets and Opportunity”, as a key part of the administration’s Climate Change strategy.  The Legislation included $1.4 billion in capital authorizations for climate adaption and resilience.  Of particular relevance to New England’s electricity sector was a Clean Peak Standard that would require the Department of Energy Resources to establish a standard that requires “all retail electricity suppliers to provide a minimum percentage of kilowatt-hour sales to end-use customers in the commonwealth from clean peak energy resources.”

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Funding Opportunity: NRCan Emerging Renewable Power Program

On January 18, Canada’s Minister of Natural Resources, Jim Carr, announced the launch of an expression of interest for the Emerging Renewable Power Program (ERPP). The program was created to expand the portfolio of commercially viable renewable power technologies available in Canada, deploy demonstrated technologies at the utility scale, and achieve further electricity sector greenhouse gas emission reductions.

ERPP’s anticipated C$200 million in funding is part of the investment goal of C$21.9 billion that the federal government plans to roll out over the next 11 years under the Pan-Canadian Framework on Clean Growth and Climate Change. The collaborative plan was officially adopted in December 2016 by all provinces and territories, except for Saskatchewan and Manitoba, and targets a GHG emission level of 523 metric tons by 2030 (a 30% reduction from 2005 levels).

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Potential Portfolio Sale: Review of NextEra Energy Canadian Assets

On January 26th, NextEra Energy executives announced that the company is considering the sale of its Canadian assets. John Ketchum, Executive Vice President of Finance and Chief Financial Officer for NextEra Energy, stated during an Q4 and full-year 2017 earnings call that the company is exploring the sale of its Canadian portfolio to recycle capital back into its U.S. assets, which are expected to benefit from recent corporate tax reform. NextEra is continuing to evaluate this opportunity and will provide updates regarding this potential sale in the coming months.

Operating in four provinces, NextEra Energy’s Canadian assets include two solar projects (40 MW) and nine wind projects (675 MW). All but one of these projects have long-term contracts with the respective purchasing entities in each province.

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Summary and Commentary on Ontario Energy Board’s Strategic Blueprint: Keeping Pace with an Evolving Energy Sector

On December 18, 2017, the Ontario Energy Board (OEB) released its Strategic Blueprint (“Blueprint”), a guide for the OEB’s work over the next five years. The Blueprint outlines four challenges that the OEB expects to encounter as the electricity sector transforms through 2022 and goals to address those challenges. The challenges presented by the OEB are: transformation & consumer value; innovation & consumer choice; consumer confidence; and regulation “fit for purpose.”

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Federal Lease Opportunity: BOEM Atlantic Wind Lease Sale 4A (ATLW-4A)

A competitive leasing process has been initiated by the Bureau of Ocean Energy Management (BOEM) for the previously unleased Massachusetts commercial lease areas, OCS-A 0502 and OCS-A 0503, in response to two unsolicited lease requests by Statoil Wind US LLC (December 16, 2016) and PNE Wind USA, Inc. (January 4, 2017). This lease sale follows the first offshore wind lease area auction for Massachusetts in 2014/15 (ATLW-4) and will be identified as Atlantic Wind Lease Sale 4A (ATLW-4A) in the Federal Register. The target is to hold the competitive auction near the end of September 2018.

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Review of ISO-NE Operational Fuel Security Analysis

Earlier this month ISO-New England (ISO-NE) released a report (Operational Fuel-Security Analysis) detailing the findings of a fuel-security analysis that was initiated to assess concerns with the region’s increasing reliance on natural gas-fired electricity. This dependence is set to increase with the retirement of oil, coal, and nuclear power plants. Increased reliance on natural gas, with limited incremental development of the region’s natural gas pipeline capacity is projected to increase fuel security risks for New England.

The report identified fuel security, in particular the availability of natural gas during the winter peak periods, as the region’s greatest risk to power system reliability.  The report makes clear that this is a very real risk for New England.  However, we believe that the static nature of assumptions where market responses aren’t fully considered, and the specification and selection of scenarios has caused the study to overstate these risks.  The report indicates one goal is to improve the region’s understanding of these risks and to inform subsequent discussions. This memo seeks to contribute to that discussion.

Fuel security is the ability of power plants to get the fuel they need, when they need it. In recent winters, ISO-NE operators have had to deal with the challenges of fuel security.  The report identified five key fuel variables that will affect the magnitude of these fuel security risks.

These variables are first discussed, then the results of ISO-NE’s analysis, followed by commentary on issues that may cause the analysis to overstate these risks or the likely incidence of the reliability events (e.g., load shedding and other less severe emergency actions such as public requests for energy conservation) identified in the report.

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Review of 83D Selection: Northern Pass Transmission, Hydro

On January 25,2018 the Massachusetts investor-owned electric distribution companies in coordination with the Department of Energy Resources (DOER) announced the completion of the evaluation of responses to the Massachusetts Clean Energy Generation RFP (83D RFP). Northern Pass Transmission, Hydro was selected as the sole winning bid; representing a purchase of 9.45 TWh per year. Eversource Energy and Hydro-Québec Production (HQ) are the proponents of Northern Pass Transmission (NPT), which will deliver 1,090 MW of hydropower to the region.

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Review of New York State Clean Energy Proposals

On January 2, New York Governor Andrew Cuomo unveiled sweeping clean energy proposals touching every aspect of the renewable energy sector. The main purpose of these proposals is to allow the state to fight climate change and protect the environment, while also creating jobs in the renewable energy sector. The set of proposals, titled the 2018 Clean Energy Jobs and Climate Agenda, is in addition to ambitious clean energy goals already mandated in the state, including the mandate to generate 50 percent of the state’s electricity from renewable energy sources by 2030.

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Review of Massachusetts Offshore Wind Energy RFP (83C) Proposals

On December 20, 2017, the Massachusetts investor-owned electric distribution companies (Distribution Companies) in coordination with the Massachusetts Department of Energy Resources (DOER) received three proposals for offshore wind energy generation projects, in response to the RFP they issued for 400 MW (and up to 800 MW) of wind energy under long-term contracts. This procurement is the first in a series of competitive solicitations under the state’s 2016 Act to Promote Energy Diversity mandate for 1,600 MW of offshore wind (OSW) by June 30, 2027. Winners of this first procurement will be announced on April 23, 2018. The bidders who submitted proposals are those that hold existing Bureau of Ocean Energy Management (BOEM) Massachusetts or Massachusetts/Rhode Island offshore leases: Deepwater Wind, Bay State Wind (Ørsted and Eversource Energy), and Vineyard Wind (Avangrid Renewables and Copenhagen Infrastructure Partners).

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Alberta REP 1 Results – Summary and Commentary

Yesterday, the Alberta Electricity System Operator (AESO) announced the results and contract awards from their first Request for Proposals (RFP) under their new Renewable Electricity Program (REP), known as REP 1.  The results and contract awards are available on the AESO’s website: https://www.aeso.ca/market/renewable-electricity-program/rep-round-1-results/.

This announcement is a culmination of efforts that began in 2015 following the release of the Government of Alberta’s (GOA’s) Climate Leadership Plan (CLP), which called for the addition of 5,000 MW of new renewable generation capacity by 2030 as part of a plan to supply 30% of Alberta’s electricity needs from renewable energy.

By all accounts, REP 1 was expected to be a highly competitive procurement – and the results of yesterday’s announcement has delivered on that expectation.  Exceeding the REP 1 procurement target by nearly 200 MW, a total of just under 600 MW of wind generation was procured, with a weighted average contract price of just over $37/MWh:

  • Capital Power’s 202 MW Whitla;
  • EDP Renewable’s 248 MW Sharp Hills;
  • Enel Green Power’s 115 MW Riverview; and
  • Enel Green Power’s 31 MW Phase 2 of Castle Rock Ridge.

With contract prices ranging between $30.90/MWh to $43.30/MWh, the energy industry in Alberta, and across Canada, will take note and time to reflect on what these results mean going forward.  These prices are record setting for Canadian wind generation projects.

The following summary and commentary reflects on the outcomes of yesterday’s announcement by providing background on the competition and reflects on the next steps the AESO may consider for future rounds of the REP.

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Integration of Variable Output Renewable
Energy Sources – The Importance of Essential
Reliability Services

Power Advisory prepared a report on the importance of Essential Reliability Services (ERS) in the integration of variable output renewable energy resources for Natural Resources Canada with direction and input from Canada’s Federal Provincial Territorial Electricity Working Group. The paper was presented by NRCan in August 2017 at the Energy and Mines Minister’s Conference in New Brunswick.

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BOEM Massachusetts Offshore Wind Lease Opportunity Review

The Bureau of Ocean Energy Management (BOEM) has indicated that it will be conducting auctions for two additional lease areas for the Massachusetts Wind Energy Area (WEA) in 2018.  The auction of the two lease areas, an aggregate of 388,569 acres (248,015 and 140,554 acres, respectively) with a maximum development potential of 4,717 MW, is in response to unsolicited lease applications from Statoil Wind US LLC and PNE Wind USA Inc. from December 2016. These Norwegian and German affiliated developers have announced plans for multiple +400MW projects, but since both expressed interest in the same lease area BOEM must hold a lease auction in which all qualified parties may participate.   Lease Areas OCS-A 0502 and 0503 make up the remaining Massachusetts WEA.

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U.S. Offshore Wind Current Progress and Cost Drivers

Though the offshore wind (OSW) industry in the United States has lagged behind Europe, given the   commitment by policymakers to support the development of the industry and allow the realization of economies achieved in Europe, future prospects for the industry appear bright. The purpose of this report is to summarize the short history of offshore wind in the United States, outline the current state of the industry, and then consider the cost drivers that will shape the industry in the future.

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European Offshore Wind Cost Reductions & Implications For North America

The cumulative capacity of global offshore wind (OSW) has grown at a dramatic rate in recent years, increasing by 25-40% annually since 2011. Due to increasing industry maturity and the development of a specialized supply chain to support the industry, realization of economies of scale, and other factors, the levelized cost of energy from OSW has decreased significantly, which is an encouraging sign for development of this industry in North America.

This report illustrates how European OSW projects have realized dramatic cost reductions, and how the emerging US OSW industry can benefit from this experience. The European OSW industry started over twenty years ago, and currently has over 12,000 MW in commercial operation, while the US only installed its first 30 MW project late last year. With an installed fleet of 3,589 OSW turbines and larger turbines being offered by OSW turbine manufacturers, European projects are offering prices, before consideration of transmission costs, that are competitive with forecast wholesale market prices, promising a market that is sustainable and not dependent on government policy support.

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Massachusetts 83C RFP For Long-Term Offshore Wind Energy Contracts Issued

With approval from the Department of Public Utilities earlier in the week through D.P.U Order 17-103 , the Massachusetts electric distribution companies issued a Request for Proposals for Long-Term Contracts for Offshore Wind Energy Projects on June 29, 2017. This kicks off the first in a series of competitive solicitations under Section 83C of Chapter 169 of the Acts of 2008 for 1.6 GW of offshore wind (OSW) capacity by June 2027.

Power Advisory’s commentary on the final RFP is available below.

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Alberta Government Announces Significant Developments in the Power Sector

On November 23, the Government of Alberta announced its intention to create a capacity market within Alberta’s wholesale electricity market, and released a detailed Alberta Electricity System Operator recommendation paper titled Alberta’s Wholesale Electricity Market Transition Recommendation that provides background and support for the changes being made.
The Electricity Market Transition Report can be found here.

Power Advisory’s summary and commentary on the Government of Alberta announcements is available below.

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The following day, the Government announced it had concluded agreements with the coal-fired generation facility owners to cease operation by 2030. These developments are part of fundamentally defining a different path going forward for Alberta’s electricity sector than the one it has been following for almost the past 20 years.
The Coal-Fired Generation Agreement Announcement can be found here.

Power Advisory’s summary and commentary on the Capacity Market Recommendation report is available below.

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AESO Releases Draft RESA for Comment

Yesterday, the AESO posted the attached draft Renewable Electricity Support Agreement (RESA) term sheet for stakeholder comment.

AESO has invited stakeholder feedback regarding the key provisions of the RESA as indicated in the attached draft term sheet.

All stakeholder comments regarding the key provisions of the RESA contained within the draft term sheet must be submitted with the following form template.

The AESO plans to post all received submissions/comments but will not disclose the identity of the author.  The AESO may choose to follow up with stakeholders, should clarification on any part of their submission be required.  The AESO also intends to post questions and corresponding responses to inquiries related to the key provisions of the RESA as contained within the draft term sheet and the identity of the author posing the question will not be disclosed.

Stakeholders will have approximately four weeks to review the key provisions of the RESA as contained within the draft term sheet and prepare their submissions.  All stakeholder feedback must be delivered to the AESO at rep@aeso.ca no later than 5:00 pm MST on December 9, 2016.

Power Advisory has reviewed the draft term sheet and will reach out to clients and colleagues within the coming days.

IESO releases the Ontario Planning Outlook

On September 1, 2016, the Independent Electricity System Operator (IESO) released the Ontario Planning outlook (OPO) serving as the IESO’s technical report on the Ontario power system. The OPO represents the IESO’s planning outlook for the 2016 through 2035 period.

The OPO was developed in response to the June 10, 2016 request from the Ontario Minister of Energy for a technical report from the IESO pursuant to Section 25.29 (3) of the Electricity Act, 1998 on the adequacy and reliability of Ontario’s electricity resources in support of the Ontario Government’s development of the Long-Term Energy Plan (LTEP). Plans for the Ontario Government to engage stakeholders on development of the LTEP are expected to be announced in the coming weeks, with the new LTEP (LTEP 2017) likely finalized during the first half of 2017.

IESO’s OPO 2016 can be found here.

Power Advisory’s summary and commentary is available below.

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Massachusetts – Bills H.2881 and H.4336: An Act to Promote Energy Diversity

Power Advisory has reviewed and provided commentary regarding draft legislation in Massachusetts supporting long-term contracts for clean energy resources including Canadian hydroelectric generation. As discussed in the note, we believe that recent developments in the region are providing a favorable environment for the enactment of such legislation.

Bill H.2881 can be found here.

Bill H.4336 can be found here.

Power Advisory’s client note is available below.

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IESO Updates the Stakeholder Advisory Committee on stakeholder feedback on the Ontario Planning Outlook 2016

On May 11, 2016, the IESO Stakeholder Advisory Committee (SAC) met (see SAC agenda here) and a summary of the stakeholder feedback along with an update from on the Ontario Planning Outlook 2016 (OPO 2016) was presented by the Power System Planning group (see OPO 2016 update here).

Power Advisory is pleased that the IESO has recognized the risks and uncertainty facing the Ontario electricity sector over the planning horizon that we had previously identified. Below is a brief client note summarizing the OPO 2016 update along with Power Advisory’s commentary.

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IESO Market Renewal Stakeholder Engagement

On March 23, 2016, the IESO released preliminary details on a forthcoming stakeholder
engagement entitled the Market Renewal Initiative (see here). The purpose of this consultation will be to gather feedback regarding the development of a workplan for renewing Ontario’s wholesale energy market design. The workplan is intended to set out specific market design changes to be
implemented over the coming years and will define target timelines for completing the work. In preparation for the Market Renewal stakeholder engagement, the IESO has published a draft
Market Renewal Stakeholder Engagement Plan (see here).

The note below is Power Advisory’s summary of the IESO’s Market Renewal consultation and draft Stakeholder Engagement Plan.

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Update on Cap-and-Trade system design and Climate Change Strategy in Ontario

On February 24 2016, Ontario’s Minister of Environment and Climate Change Glen Murray introduced Bill 172: Climate Change Mitigation and Low Carbon Economy Act, 2016. (see here). The following day, the Ontario Government published a consultation draft of the Ontario Cap-and-Trade regulation (see here).

The report below is Power Advisory’s summary of the updated Ontario cap-and-trade system design and Climate Change Strategy along with associated timelines with emphasis on potential implication’s for Ontario’s electricity sector.

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Power Advisory Summary and Preliminary Commentary on Alberta’s Climate Leadership Plan

The Alberta Government has declared policy direction to: 1) establish a price on carbon; 2) phase out coal-fired generation by 2030; and 3) accelerate renewable generation developments. These are the key policies that will impact Alberta’s wholesale energy market within the Alberta Government’s broader Climate Leadership Plan.

This direction will create opportunities and pose challenges for Alberta’s wholesale energy market and the development of renewable generation, as summarized by the high-level points below.

  • The to be designed clean power call (i.e., Request for Proposals) must be carefully designed to ensure development of renewable generation in order to meet policy objectives along with successful integration of renewable generation into Alberta’s wholesale energy market.
  • New renewable generation will require revenue adequacy from Alberta’s wholesale energy market in addition to contract revenues. Therefore, forward energy prices and their projected energy market revenues will be essential factors in the development of renewable generation.
  • There will be complicated and dynamic interdependencies regarding Alberta’s energy supply in the wake of retiring coal-fired generation while renewable generation is being developed. These interdependencies will also impact revenue adequacy from Alberta’s wholesale energy market and contract revenues.
  • Overall, existing Alberta wholesale market participants and renewable energy developers looking to participate in the forthcoming clean power call should be very diligent regarding the design of the forthcoming clean power call and contract, future wholesale energy prices and market revenues, and potential need to evolve Alberta’s wholesale market design and market rules regarding the integration of more renewable generation.

Power Advisory has been actively consulting for generators and Government in Alberta for the last several years, in addition to other North American jurisdictions. We combine our knowledge of Alberta’s energy market with our capabilities regarding price forecasting and market analysis, generation procurement processes, generation development, and wholesale market operations.

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Power Advisory Commentary of the Proposed Cap-and-Trade system design and Climate Change Strategy

In mid-November 2015, the Ontario Ministry of Environment and Climate Change (MOECC) hosted a series of stakeholder sessions to present an update on the progress of the province’s forthcoming cap-and-trade program design (see here). Following the sessions, the MOECC posted details of the proposal to the Environmental Registry for public comment.

On November 24, 2015, the provincial government announced Ontario’s Climate Change Strategy which provides further support for the development of a cap-and-trade system in Ontario (see here).

The report below is Power Advisory’s summary of the proposed Ontario cap-and-trade system design and Climate Change Strategy along with associated timelines with emphasis on potential implication’s for Ontario’s electricity sector.

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Power Advisory Commentary on IESO Planning Update

Power Advisory has amended our Ontario Generation Outlook Report based on a recently released IESO’s planning update. The report below is Power Advisory’s high-level commentary on the IESO’s planning update.

Overall, Power Advisory agrees that post 2020/21 Ontario will require at least between 2,000 to 3,000 MW of capacity supply but see risks and changing policies/markets that could change and increase the capacity supply need.

We are also working on a high-level commentary of the IESO’s NUG Framework Assessment.

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Power Advisory Commentary on Carbon Regulation in New England

On July 23rd Michael Ernst spoke at the New England Energy and Commerce Association’s Annual Environmental Conference on the impact of Carbon Regulation on New England electricity generators.

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Power Advisory Commentary on the Announced Cap-and-Trade System in Ontario

On April 13, 2015, Ontario Premier Kathleen Wynne announced that a cap-and-trade system will be
implemented in the province to limit greenhouse gas pollution and to fight climate change. Power Advisory LLC has completed a high-level commentary on the proposed cap-and-trade system in Ontario with potential implications for renewable energy generation.

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ISO-New England Forward Capacity Auction #9 Price Forecast

Power Advisory has just finalized our forecast of prices in ISO-NE’s forthcoming Forward Capacity Auction (FCA) #9. Reflecting tightening conditions in the ISO-NE forward capacity market, the implementation of a sloped demand curve, and ISO-NE’s Pay for Performance program, Power Advisory is projecting FCA #9 to clear at the highest prices achieved to date. Adding to the strength shown in FCA #8, a sloped demand curve contributes greater stability to the market. In a market which is relatively tight, this limits the range of plausible prices at which the market will clear.

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Planning vs Partiality: A Case Study from PJM on competitive procurement of regional transmission under FERC Order 1000

John Dalton, President of Power Advisory LLC, recently published an article in Public Utilities Fortnightly on competitive procurement for transmission facilities, focusing in particular on PJM’s experience with the competitive procurement process for the Artificial Island Area in New Jersey.

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Young Professionals in Energy: Jason Chee-Aloy presents the possibility of a Capacity Market in Ontario

On October 22, Power Advisory’s Managing Director Jason Chee-Aloy provided a presentation on the possibility of a Capacity Market in Ontario. The IESO has initiated a stakeholder engagement regarding potential development and implementation of an IESO-Administered Capacity Market (i.e., Capacity Auction).

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CanWEA 2014 Conference: Evidence Regarding Future Declines in the Cost of Wind

On October 28, Power Advisory’s President John Dalton presented evidence of future declines in wind energy costs.  The presentation provided recent experiences with cost of wind energy and future cost reductions.

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Examining the Future Structure of Ontario’s Electricity Market: Should Ontario Incorporate a Capacity Market or Alternative Structure Framework?

On April 15, Power Advisory’s Managing Director Jason Chee-Aloy presented his expert opinion on the possibility of a future capacity market in Ontario.  The presentation reviewed what a capacity market is; the current arrangement to ensure capacity in Ontario; and key aspects that stakeholder consultation should consider.

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Assessment of Opportunities Offered by the IESO Energy Storage Request For Proposal

The Independent Electricity System Operator (IESO) has issued a Request For Proposal (RFP) for 35 MW of Energy Storage projects providing regulation, reactive support and voltage control services.  Power Advisory has summarized the key components of the RFP and provided an assessment of opportunities offered by the RFP.

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Summary and Commentary of Ontario’s Large Renewable Procurement (LRP)

On December 17, 2013, the Ontario Power Authority (OPA) hosted a webinar to discuss the development of the Large Renewable Procurement (LRP) and next steps. This note provides Power Advisory LLC’s high-level summary of the LRP webinar and commentary on key elements of the LRP as discussed by the OPA.

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Review of Ontario’s Long-Term Energy Plan 2013

Power Advisory’s expert team has completed a high-level review and commentary on the updated Long-Term Energy Plan (LTEP) that was released by the Minister of Energy on December 2nd. This review identifies the key elements of the updated LTEP, provides Power Advisory’s expert commentary and draws conclusions on the impact of the LTEP on the future for the Ontario energy sector.

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Ontario Electricity Market Quarterly Assessment Report

This report provides Power Advisory’s perspective on major developments in Ontario’s wholesale and retail power markets, offering valuable insights on opportunities and
risks posed.

IESO engagement activities, government policy developments, OEB regulations and federal initiatives are reviewed as well as neighboring jurisdictions . With this focus, the report is targeted toward parties that are considering or have made long-term investments in the market. As such, the report is likely to be of interest to generators, project developers, policy-makers and large industrial consumers.

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