InvenergyInvenergyThe Power of Innovation

Invenergy

Discussion OutlineIntroduction to Invenergy

Wind generation development 101

The impact of HB 1871 – The Illinois state RPS

Invenergy

Invenergy Wind Overview

OperationalProjects

Contracted Projects

Invenergy Offices

Invenergy

Invenergy Midwest Portfolio

Nelson CCLocation: IL Size: 600MWCOD: Mid 2009Interconnection: PJM

Grand RidgeLocation: ILSize: 350 MWCOD: Mid 2008Interconnection: PJM

Bishop HillLocations: ILSize: 400 MWCOD: Late 2008Interconnection: PJM/MISO

ForwardLocation: WISize: 200 MWCOD: 2007Interconnection: ATC

VictoryLocation: IASize: 99 MWCOD: December 2006Interconnection: MidAmWind Project

Gas-Fired Project

Wind Project

Gas-Fired Project

White OakLocation: IL Size: 150 MWCOD: Late 2007Interconnections: MISO

Invenergy

Wind Development 101Wind

Wind turbines

Land

Interconnection agreement

A market for the energy

A market for the renewable energy credits

Invenergy

Wind Intensity in the U.S.

Invenergy

Wind TurbinesHow big are they?

Tower - 80 meters (about 25 stories) at the hubBlades – 38 meters (about 100 feet) long

How are they put togetherConcrete footing pouredThree tower pieces assembled in placeThree blades attached to the hub and lifted into place

How fast do they turn?16 RPM (one rotation every four seconds)

Invenergy

Land UseWind farms and agriculture are very compatible

Wind farms require from 50 – 100 acres per turbine, with a typical wind farm comprising of 100 turbinesWhen completed, each turbine only removes 0.25 acres from production

Hosting a wind farm greatly benefits the communityTax base increased by ~ $2.5 MM per turbineAffected landowners receive compensation through easement and waiver agreements

Invenergy

Interconnection AgreementThe interconnection agreement allows for the generator to interconnect to the electric transmission systemThis process is one of the most time consuming steps of the development process:

In recent experience, neither PJM nor MISO has been able to adhere to these timelines

Step MISO PJM Feasibility Study 150 days 240 days System Impact Study 148 days 120 days Facility Study 175 days 120 days* Interconnection Agreement 210 days 30 days Commercial Operation 365 days* 365 days* Total Time (days) 1048 days 875 days * Timeline not limited in tariff

Invenergy

Marketing the Energy and RECsHow wind energy and RECs are sold varies by marketIn less actively traded markets, energy and RECs are sold under long term contracts to load serving utilities

Contracts typically 20 – 25 years longPricing fixed for the termCommon in CO and WI

In more actively traded markets, energy and RECs are often sold separately

Energy sold into power poolEnergy price risk managed through commodity risk managers, typically for 10 yearsRECs sold to load serving entitiesCommon in TX and PJM

Invenergy

Impact of HB 1871On May 3rd, the IL House passed a bill providing for a renewable portfolio standard (RPS) for IL

Sets a requirement that 25% of IL’s energy requirements are met by renewables by 2025, with implementation beginning in 2007Requires in state generation through 2011Protects ratepayers through caps on rate impacts

Clear ratemaking requirements will be critical to its implementation

Provides for 20 year power purchase agreementsProvides for the Commission to review and approve solicitation processes

Invenergy

U.S. Renewable Portfolio Standards

State Goal

☼ PA: 18%¹ by 2020☼ NJ: 22.5% by 2021

CT: 10% by 2010

MA: 4% by 2009 + 1% annual increase

WI: requirement varies by utility; 10% by 2015 goal

IA: 105 MW

MN: 25% by 2025;(Xcel: 30% by 2020)

TX: 5,880 MW by 2015

*NM: 20% by 2020 (IOUs)10% by 2020 (co-ops)

☼ AZ: 15% by 2025

CA: 20% by 2010

☼ NV: 20% by 2015

ME: 30% by 2000;10% by 2017 goal - new RE

State RPS

*MD: 7.5% by 2019

☼ Minimum solar or customer-sited requirement* Increased credit for solar or customer-sited

¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resource

HI: 20% by 2020

RI: 15% by 2020

☼ CO: 20% by 2020 (IOUs)*10% by 2020 (co-ops & large munis)

☼ DC: 11% by 2022

☼ NY: 24% by 2013

MT: 15% by 2015

*DE: 10% by 2019

IL: 8% by 2013

VT: RE meets load growth by 2012*WA: 15% by 2020

Solar water heating

Invenergy

Comparison on State RPSsState IL (as proposed) WI NJ TXSize of RPS (%)

08 – 2% 09 – 4% 10 – 5% 11 – 6% 12 – 7%

08 – 5.5% 09 – 5.5% 10 – 7.5% 11 – 7.5% 12 – 7.5%

08 – 5.5% 09 – 6.5% 10 – 7.4% 11 – 8.3% 12 – 9.2%

07 – 1.4% 09 – 1.9% 11 – 2.4% 13 – 2.9% 15 – 3.1%

Size of RPS (MWh/year)

08 – 2,960,000 09 – 6,003,000 10 – 7,608,000 11 – 9,253,000 12 – 10,941,000

08 – 4,135,000 09 – 4,212,000 10 – 5,850,000 11 – 5,957,000 12 – 6,063,000

08 – 4,723,000 09 – 5,693,000 10 – 6,620,000 11 – 7,566,000 12 – 8,569,000

08 – 6,079,000 09 – 7,166,000 10 – 8,252,000 11 – 9,338,000 12 – 10,424,000

Qualifying Technologies

Solar Water Heat, Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, CHP/Cogeneration, "Other Such Alternative Sources of Environmentally Preferable Energy"

Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Tidal Energy, Wave Energy, Fuel Cells using Renewable Fuels

Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Resource-Recovery Facilities approved by the DEP, Anaerobic Digestion, Tidal Energy, Wave Energy, Fuel Cells using Renewable Fuels

Solar Water Heat, Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Geothermal Heat Pumps, Tidal Energy, Wave Energy, Ocean Thermal

Qualifying Locations

08 through 11 – IL (subject to economic tests) 12 and beyond – IL, WI, IA, MO, KY and IN

Physical delivery to the utility (generally WI and IA)

Generators that deliver energy into PJM.

ERCOT

Invenergy

Meeting the IL RPS through Wind

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Annu

al G

ener

atio

n (G

Wh/

yr)

Currently Proposed Wind Capacity (GWh/yr)Wind Capacity Under Construction (GWh/yr)Existing Wind (GWh/yr)

REC Requirements to be Met by Wind (GWh/yr)AWEA Estimated IL Wind Energy Potential (GWh/yr)

Invenergy

Proposed IL Wind Projects

Source - AWEA

Project Utility/Developer Location Status MW CapGSG Wind Farm Phase I Babcock & Brown and

FPC ServicesLee and LaSalle Counties under construction 80

Twin Groves I Horizon Wind Energy McLean County under construction 198

Twin Groves II Horizon Wind Energy McLean County Proposed 198

McLean Wind Energy Center (White Oak)

Invenergy McLean Proposed 150

Bishop Hill Invenergy Henry County Proposed 350

Grand Ridge Invenergy LaSalle County Proposed 400

Crescent Ridge II Midwest Wind Energy Bureau County Proposed 74

Big Sky Wind Farm Midwest Wind Energy Lee & Bureau Counties Proposed 200

Rail Splitter Wind Farm Horizon Wind Energy Logan, Tazewell Counties Proposed 100

Blackstone Wind Farm Horizon Wind Energy Livingston County Proposed 300-600

Baileyville Wind Farm Navitas Energy Ogle County Proposed 80

Benson Wind Farm Navitas Energy Woodford County Proposed 160

Invenergy

SummaryWind energy can contribute significantly to serving Illinois’ energy supply needs going forward

HR 1871 sets a high, but attainable, goal for renewables in IL, and wind will play a leading role in meeting it

In order to meet that goal, developers, ISO’s, landowners, utilities, and those that oversee them will have to work together

Invenergy

Questions?