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Karbone • Karbone is an integrated Energy and Environmental Markets firm • Founded in 2008 with offices in New York and London • Karbone provides:
BROKERAGE | CAPITAL ADVISORY | MARKET RESEARCH • Since its founding, the firm has been recognized in mulHple
instances in the Renewable Energy Sector by its clients:
2
Agenda
1. New England Energy Overview
2. Prospects for Renewable Energy
3. REC Market Fundamentals
4. PotenHal Game Changers
3
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New England Energy Overview Figure 1: Evolving Energy Mix
Figure 3: Old Coal & Oil
Figure 2: Infrastructure Constraints
FCA 8: Defic i t i n Power System Resources to M e e t C o n s um e r Demand in 2017-‐2018
Sources: ISO-‐NE, Bentek
Bullish Prospects for Renewable Energy
Support Factors Challenges
Limited AlternaHves SiHng
Revenue Drivers Variability
Tax Credit Regime Regulatory Uncertainty
RGGI
5
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REC Market Fundamentals
$0.00$
$10.00$
$20.00$
$30.00$
$40.00$
$50.00$
$60.00$
$70.00$
January214$ February214$ March214$ April214$ May214$ June214$ July214$ August214$ September214$ October214$ November214$
$$/$REC$$
NEPOOL$2014$Class$I$REC$Prices$
MA$Class$I$REC$2014$ CT$Class$I$REC$2014$ RI$New$REC$2014$ ME$Class$I$REC$2014$ MA,$ME,$RI$ACP$ CT$ACP$
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Bearish Game Changer: Hydro
!"!!!!
!500,000!!
!1,000,000!!
!1,500,000!!
!2,000,000!!
!2,500,000!!
!3,000,000!!
2014! 2015! 2016! 2017! 2018! 2019! 2020!
MW
h
• PotenHal for up to 10% of CT Class I demand to be met by large-‐scale hydro by 2020 • However, concerns regarding transmission viability of wheeling all this power • Also, declining Biomass & LFG REC value / VT SPEED disqualificaHon counter-‐balances new supply
2.8M RECs
!"!!!!
!500,000!!
!1,000,000!!
!1,500,000!!
!2,000,000!!
!2,500,000!!
!3,000,000!!
2015! 2016! 2017! 2018! 2019! 2020! 2021!
MWh!
CT! MA! RI! ME! NH!
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Bearish Game Changer: NY Wind
• Over 1 GW of NY sited wind already qualified in Massachuseds for Class I RECs • Graph displays exisHng New York wind that is rolling off of NYSERDA Main Tier contracts • However, power markeHng & congesHon concerns limit opHonality
2.5M RECs
9
Bearish Game Changer: Offshore Wind
!"!!!!
!200,000!!
!400,000!!
!600,000!!
!800,000!!
!1,000,000!!
!1,200,000!!
!1,400,000!!
!1,600,000!!
!1,800,000!!
2016! 2017! 2018! 2019! 2020!
MWh!
• Projects in advanced stages: Block Island & Cape Wind • NEPOOL cross-‐eligibility • But – project development risks
1.7M RECs
10
Bullish Game Changer: Vermont SPEED
A Different Kind of Change
~1,000,000 RECs
Commercial DisrupHon
An RPS in the Cards?
Canary in the Coal Mine
Spillover Claims SensiHvity
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