#1NEW HAMPSHIRE OSI OFFICE OF STRATEGIC INITIATIVES New Hampshire Offshore Wind Energy Outlook Matthew Mailloux Energy Advisor, OSI December 12, 2019#22 Topics for Today ● Brief Introduction to the Office of Strategic Initiatives' scope and role • Offshore wind observations o State led offshore wind efforts ● State energy goals NH Office of Strategic Initiatives | 2019#33 About OSI ● OSI provides information, data & guidance to assist decision-makers on issues pertaining to energy use, development, land protection & community planning. We guide the state's future growth through public policy development, education, research, & partnership building. NH Office of Strategic Initiatives | 2019#44 Energy Division The Office of Strategic Initiatives operates several Energy Programs in partnership with both private and public entities to promote a sustainable, environmentally sound and least-cost energy future for New Hampshire. We function as the Governor's Energy Office & we are administratively attached to the Office of the Governor. NH Office of Strategic Initiatives | 2019#5Offshore Wind Observations LO 5 NH Office of Strategic Initiatives | 2019#66 Observed Wind Speeds Offshore Annual Average Wind Speed at 100 m Wind Speed m/s o Gulf of Maine has some of the best wind resources anywhere in the world o Considerably stronger than mid- and southern Atlantic coast states >10.5 10.0 9.5 9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 < 4.0 NH Office of Strategic Initiatives | 2019#77 AINS Federal Waters in Gulf of Maine Mt Washington Concord PSHIRE ua Lowell MOUN ster Boston Portland Augusta Gulf of Maine Bay o Federal Waters are between 3 to 200 miles offshore "Exclusive Economic Zone" (EEZ) established in the 1982 United Nations Convention on the Law of the Sea vidence Plymouth New Bedford Cape Cod Bay Barnstable HODE NH Office of Strategic Initiatives | 2019#88 Gulf of Maine Bathymetry Boston Augusta Cape Cod Bay 292 288 Gulf of Maine ● Gulf of Maine will likely require floating offshore wind turbines, due to water depth >100 meters This technology is not yet at commercial scale, but rapidly nearing. NH Office of Strategic Initiatives | 2019#99 ISO New England Forward Capacity Market (FCM) Zones Rest of Pool Export- Constrained Zones FCA 14 Nested Export- Constrained Import- Constrained o Northern New England is "export constrained" meaning there is insufficient transmission to export power to load centers in southern New England o New transmission investment may be required to site and interconnect OSW NH Office of Strategic Initiatives | 2019#1010 NESCOE Offshore Wind Study Request to ISO-NE In April 2019 the New England States Committee on Electricity (NESCOE) requested that "ISO-NE perform a comprehensive study of the transmission system and wholesale market impacts related to increasing penetration of incremental offshore wind resources." ● The goal of the study request is to examine both potential transmission system issues and wholesale market impacts. NH Office of Strategic Initiatives | 2019#1111 Scenarios To Be Studied ● In the request, NESCOE specified the following: Existing scenarios of 1,000 MW and 2,000 MW by 2030 from the 2015 Economic Study Evaluation of Offshore Wind Deployment A 4,000 MW scenario of offshore wind by 2030 o Additional scenarios for 5,000 to 7,000 MW of offshore wind by 2035. • ISO New England expects to release results in Q2 of 2020 NH Office of Strategic Initiatives | 2019#1212 ISO-NE Wholesale Market is Vulnerable to Winter Price Spikes Natural Gas and Wholesale Electricity Prices Linked Monthly Average Natural Gas and Wholesale Electricity Prices at New England Hub Electric Energy$/MWh $180 Winter 2013/2014 $30 $160 $140 Hurricanes hit the Gulf $120 Before the Recession and Marcellus Shale gas boom Winter 2014/2015 $25 Winter 2012/2013 Winter 2017/2018 $20 $100 $15 $80 $60 $10 $40 $5 $20 So March 2008 1000 Apr Novemb March ch 200 y 2009 Novem 720 Nover November y 200 600 eth 2010 Novem March Tor Ap Novemb rch 2011 Novembe Nove 2014 November 2015 March November March November 29 March Fuel $/MMBtu -Wholesale Electricity at New England Hub (Real-Time LMP) Natural Gas Ice Underlying ratura ge data furnished by NH Office of Strategic Initiatives | 2019#1313 Offshore Wind Efforts NH Office of Strategic Initiatives | 2019#1414 Offshore Wind Background ● Jan 2, 2019: Governor Sununu issued a request to BOEM to initiate the offshore wind regulatory process o April 17, 2019: BOEM returns Acknowledgment Letter, paving the way to begin the Task Force Process ● For better coordination, BOEM opted to make this a regional effort with Maine & Massachusetts December 3, 2019: Governor Sununu issued an offshore wind executive order NH Office of Strategic Initiatives | 2019#1515 Offshore Wind Executive Order o Establishes 4 Advisory boards: o Environmental impacts o Port infrastructure ● Existing offshore industries o Transmission and siting o Requires 2 studies by January 2021: ● Potential reductions in greenhouse gas (GHG) emissions o Opportunities to attract offshore wind supply chain manufacturers NH Office of Strategic Initiatives | 2019#1616 NH Task Force Membership 。 State agency commissioners from: o Department of Environmental Services o Public Utilities Commission o Department of Business and Economic Affairs o Department of Safety o Department of Natural and Cultural Resources o Office of Strategic Initiatives O NH Fish & Game Elected Officials from Seabrook, Hampton, North Hampton, Rye, New Castle, and Portsmouth o Selectmen, State Reps, State Senators, Mayor, and Executive Councilor State Reps from the House Science Technology and Energy Committee Senators from the Senate Environment and Natural Resource Committee NH Office of Strategic Initiatives | 2019#1717 State Energy Goals NH Office of Strategic Initiatives | 2019#1818 NH State Energy Strategy ● Released in April 2017, select goals include: o Prioritize cost-effective energy policies. o Ensure a secure, reliable, and resilient energy system. o Achieve environmental protection that is cost effective and enables economic growth. o Encourage market-selection of cost-effective energy resources. Generate in-state economic activity without reliance on permanent subsidization of energy. ● Protect against neighboring states' policies that socialize costs. NH Office of Strategic Initiatives | 2019#1919 Emphasis on "All-of-the-Above" ● Fundamental principle that all energy sources should be able to compete on a level playing field in an open energy market. ● Government intervention in energy markets should be limited, justified, and technology- neutral. NH Office of Strategic Initiatives | 2019#2020 20 Renewable Portfolio Standard o Statutory obligation of 25.2 percent of total retail electric sales by 2025 o Obligation is divided among 4 classes: o Class I: New renewables o Class I-thermal carve out o Class II: Solar carve out o Class III: Existing Biomass/methane o Class IV: Existing small hydroelectric NH Office of Strategic Initiatives | 2019#2121 Breaking Down Barriers to Offshore Wind ● By initiating the BOEM process, Wind Energy Areas may be identified in federal waters in the Gulf of Maine o This is a vital step to identify potential opportunities for future offshore wind development o Signals to developers that NH is open for business NH Office of Strategic Initiatives | 2019#2222 22 Let the Offshore Wind Market Continue to Develop ● Prices for offshore wind energy have fallen dramatically in recent years, but are still above the market price. ● NH already pays some of the highest retail electric rates anywhere in the country ● Price is a top concern for ratepayers NH Office of Strategic Initiatives | 2019#2323 Economic Development ● Access lower cost, native electricity generation for NH ratepayers ● Reduction of environmental impact on NH natural resources, a key economic lifestyle and tourism driver Diversified opportunities for new industry jobs Modernization of NH port facilities o Diversification options for growing NH component manufacturing industry in OSW supply chains NH Office of Strategic Initiatives | 2019#2424 Existing Offshore Industries ● While pursuing new offshore energy development, NH is cognizant of vital offshore industries in the Gulf of Maine o An ocean is open doesn't mean it is not busy Northeast Ocean Data Portal will be crucial in incorporating all available data in decision making NH Office of Strategic Initiatives | 2019#2525 25 Stakeholder Engagement ● NH is committed to engaging with stakeholders at every step of the process o Task Force needs to be transparent, engaged, and responsive throughout the entire process • Stakeholders should have opportunities to be heard both at BOEM meetings and state led advisory boards. NH Office of Strategic Initiatives | 2019#2626 Key Takeaways New Hampshire is preparing for the offshore wind process along with BOEM and our neighboring states ● This is a long process of stakeholder engagement, permitting, environmental reviews, and siting of potential future resources ● The region is likely at least 6-10 years away from operational wind farms in the Gulf of Maine NH Office of Strategic Initiatives | 2019#27Questions? Contact: Matthew Mailloux 603-271-8316 [email protected] 27 NEW HAMPSHIRE OSI OFFICE OF STRATEGIC INITIATIVES NH Office of Strategic Initiatives | 2019