Melissa SeymourMidwest Market StructureIberdrola Renewables

June 7, 2010Mid-America Regulatory ConferenceKansas City, MO

Integrating Renewables on the Grid:

Meeting the Challenge of the Midwest's Energy Future

Elk River Wind Power Project, Kansas

Iberdrola Renewables:A Leader in Execution

… with excellent growth prospects… with excellent growth prospects

A collection of exceptional assets…A collection of exceptional assets…

#2 developer in the U.S. with nearly 3.6 GWs

(1,311 MWs of wind started up in 2009)

#2 developer in the U.S. with nearly 3.6 GWs

(1,311 MWs of wind started up in 2009)

851 employees in 28 U.S. states,DC, and Canada

851 employees in 28 U.S. states,DC, and Canada

621 MW of CCGT & peaking capacity on the strategic CA-OR border

621 MW of CCGT & peaking capacity on the strategic CA-OR border

155 BCF of owned & contracted natural gas storage positioned for a volatile future

155 BCF of owned & contracted natural gas storage positioned for a volatile future

U.S. represents 1/3 of earningsU.S. represents 1/3 of earnings

24.5 GWs of wind development pipeline is in the U.S.

24.5 GWs of wind development pipeline is in the U.S.

US RenewablesUS Renewables

Corporate SupportCorporate Support

Wind Power Gas 3,600+ MW 521 MW CCGT

100 MW peaking155 BCF Owned

& Contracted

Updated Feb. 23, 2010

Mid-Continent Wind Assets

Updated March 1, 2010

Operating wind projects

MID-CONTINENT REGION

MinnDakota150 MW Owned

Flying Cloud43.5 MW Owned

Elk River150 MW Owned

Moraine 51 MW Owned

Trimont 101 MW Owned

Winnebago20 MW Owned Providence

Heights72 MW Owned

Top of Iowa II80 MW Owned

Moraine II 49.5 MW Owned

Elm Creek99 MW Owned

Buffalo Ridge50.4 MW Owned

Farmers City146 MW Owned

Penascal202 MW Owned

Barton Chapel

120 MW Owned

Barton160 MW Owned

Rugby149.1 MW Owned

Streator Cayuga Ridge300 MW Owned

U.S. Markets for Renewable Energy:

Those states ~= 50% of US KWh (map shows population density)

States with circles:• RPS• high KWh use• high electricity price

28 states with mandatory RPS requirements

Source of maps: UCS, US Census

Connecting Renewables to Loads

• The best wind resources in the U.S. are located in areas where the grid is the weakest

Source of maps: NREL, Platts

Wind Integration Solutions

HighCost

LowCost

Source: UWIG

Low Wind Penetration Level

High Wind Penetration Level

Markets

Additio

nal

Flexible

Generation

Wind

C

urtailment

Storage

Accessing Intra-hour flexibility

Price Responsive Load

Demand Response

Dynamic Scheduling

Simple Cycle GT

Combined Cycle GT

In Range of 1-2%

Pumped Storage

Batteries

Flywheels

SMES

CAES

Capacitors

PHEV

A

ccurate

Forecasting

Real time forecasting

Centralized Forecasting

Integrating wind is a cost issue, not a reliability issue

Mid-Continent Market Attributes for Optimal Wind IntegrationFavorable Areas for Improvement

Large balancing areas Incenting and utilizing accurate wind forecasts

Robust regional interconnections (MISO and SPP)

Construction of transmission infrastructure to link remote resources to loads

Access to intra-hour flexibility Ensuring low-cost integration solutions are implemented

Flexible transmission service

Robust regional transmission planning processes

8

Summary

• The Mid-Continent has many favorable market attributes for cost-effectively integrating renewables

• Successful wind integration in the Mid-Continent will require transmission expansion - transmission costs are a small fraction of the total costs of the power system

• Incenting accurate forecasting and incorporating forecasting in system operations will significantly reduce the uncertainty about future wind output

• Need to continue to develop market rules, processes, incentives, and products that ensure that low-cost wind integration solutions are developed prior to implementing higher costs solutions

Big Horn Wind Power Project, Washington

Questions?

Melissa Seymourmelissa.seymour@iberdrolausa.com503-708-8148