project 150 evaluation working group

Project 150 Evaluation Working Group

Round 3 Proposal EvaluationSteering Committee Review

September 5, 2008

2

Evaluation Process Evaluation Committee

Steps & Minimum Requirements

Evaluation Metrics Project-based

Sensitivity of Results to Key Variables

Project Evaluation

Results Overview of Recommended Projects

Recommendations

Recommended

On the fence

Not recommended

Internal Working Document – For Discussion Purposes

Presentation Overview

Proposal Summary

Statistics # Projects & MW by Technology

Strength of the field

CCEF Funds Requested

Ratepayer Cost Impacts

SW CT Benefits

Agreement on Proposal Recommendations to CCEF Board

Next Steps & Timing

3

Evaluation Process:Evaluation Committee

Affiliation Core Expertise

Dale Hedman Director Project

Development, CCEF

Project Development

Patrick O'Neill P.E. Project Mgr., CCEF Power Engineering

James Dunn Energy Technology

Consultants

Hydrogen/Fuel Cell

David Nickerson Mystic River Energy

Group LLC

Project Development /

Wholesale Power

Supply


4

Evaluation Process:Key Steps

Review and refine evaluation methods & Scoring Weights

Review proposals for Minimum Bid Eligibility Requirements

Review proposals as submitted

Face-to-face project interviews to clarify proposals & address questions

Written project responses to specific questions

Individual evaluators score each project on non-price evaluation criteria

Consultants calculate net ratepayer impact

Two day evaluator meeting to review net ratepayer impact analysis,

discuss projects, finalize scores, consider key sensitivities, and rank

projects


5

Proposals Not Meeting Minimum Bid Requirements

Versailles Renewable Energy Landfill-methane-by pipeline at CHP plant

Ineligible pricing option (as determined by DPUC), no alternative offered

Elemental Power “Quad” Fuel cell in CHP configuration

Site control not secured


6

Cost to Ratepayers

NPV Ratepayer

Impact (55)

Note: Higher score

means lower

net ratepayer

costs

Ratepayer Benefits

Increased access to RE w/ min. env. Impact (2)

CT econ. dev. Benefits (2)

Output & reliability at system peak (1.5)

Long term price suppression (1)

Innovative use of technology (1)

T&D reliability (1)

Project Diversity: tech., fuel source, location & size (0.5)

Timing (1)

Financial Viability

Sound financial expectations & assumptions (3.75)

Financing experience (2.25)

Financial strength of developer (3)

Realistic financing structure (1.5)

Capital Risk (2.25) Equity

participation (2.25)

Feasibility

Team experience (3) Permitting status (3) Public acceptance (2) Site issues (2) Reasonableness of

schedule (1) Design status (2) Technology risk (2) Interconnection

analysis (2) Quality of operating

plan (1) Quality of resource/

fuel plan (2)

55 10 15 20

Key:

Scoring metric determined by quantitative analysis of proposal

Evaluator subjective metric


Evaluation Metrics

(Points out of 100)

7

Consideration ofPortfolio Characteristics

Limited variety of technologies among proposals meeting minimum threshold review

All natural gas fuel cells manufactured in CT

Why? Biomass potential largely tapped

Limited indigenous wind & hydro resources, none sufficiently advanced for this solicitation

Solar unable to beat the price cap

LFG-by-pipe project selected ineligible price option


8

Proposal Summary Statistics

45.1 MW Total


9

Proposal Summary Statistics:Strength of the Field

Reasonably competitive:

Proposals ~3x target MW before threshold review;

Final evaluation pool ~ 2x target MW

Not a diverse mix

All proposals = same fuel & base technology and manufacturer

Variety of stages of development

Many have strong financial partners and/or proponent equity

3 of final 7 projects requested additional CCEF funding

Scoring tightly clustered all scores between 67.3 – 71.0 of 100


10

Proposal Summary Statistics: CCEF $ Requested

•Binary distribution of funding requests• 4 requested no additional $

• 3 requests between. $1.5 – 3 million

•Total requested (7 proj.) = $7.75 million


11

Proposal Summary Statistics: Ratepayer Cost Impacts

Net NPV cost impact to ratepayers of payments to projects…

Evaluated on a consistent basis…

After taking credit for the market value to ratepayers of expected energy

generated, locational forward capacity and RECs provided… and CCEF $


12

Proposal Summary Statistics: SW CT Benefits


13

Project Evaluation:Overview of Recommended Projects

Number of

Projects

Total MW

Claimed

Capability

Avg. Ratepayer

Impact

(NPV ¢/kwh)

Recommended 4 24.06 2.53 ¢/kwh

On the Fence 1 3.24 2.58 ¢/kwh

Not

Recommended2 17.77 2.95 ¢/kwh


14

Project Evaluation:Summary of Recommended Projects


15

Pricing Options Selected

Option 6 – 50% of Wholesale Market Energy Cost Plus Project Cost of

Natural Gas As The Primary Fuel (Not Subject To Price

Cap).

4 Proposals

Option 6a – 50% of Wholesale Market Energy Cost Plus Project Cost of

Natural Gas As The Primary Fuel (Not Subject To Price

Cap), adjusted downward by proposer-defined price

modifier.

3 Proposals This is a new pricing option introduced by CCEF in Round 3

One response had variable downward adjustment tied to market REC prices


16

Discussion of Recommendations


17

Project

No. &

(Score) Developer Location Type

Seasonal

Adjusted

Claimed

Capability

(kW)

NPV

Ratepayer

Impact

(¢/kwh)

Pricing

Option

Selected

Additional

CCEF

Funds >

$50k

($ millions)

008

(71.0)Fuel Cell Energy Bloomfield

Fuel Cell +

ERG3,367 2.36 6 $0

005

(71.0)

Bridgeport Fuel

Cell Park, LLCBridgeport**

Fuel Cell +

ORC14,294 2.84 6a $1.5

009

(70.9)Fuel Cell Energy Trumbull**

Fuel Cell +

ERG3,200 2.47 6 $0

007

(70.2)Fuel Cell Energy Glastonbury

Fuel Cell +

ERG3,200 2.47 6 $0

* Secondary SW CT, ** Primary SW CT


Scoring Summary:Recommended

18

Project

No. &


Seasonal

Adjusted

Claimed

Capability

(kW)

NPV

Ratepayer

Impact

(¢/kwh)

Pricing

Option

Selected

Additional

CCEF

Funds >

$50k ($

millions)

001

(68.3)

EPG Fuel Cell,

LLC (Cube)Danbury*

Fuel Cell +

Brayton

cycle

turbine

3,238 2.58 6a $2.95



Pro = provides technology & developer diversity

Con = request of $3m for a 3MW project

Scoring Summary:On the Fence

19

Project

No. &


Seasonal

Adjusted

Claimed

Capability

(kW)

NPV

Ratepayer

Impact

(¢/kwh)

Pricing

Option

Selected

Additional

CCEF

Funds >

$50k ($

millions)

006

(67.9)TEN Companies Hartford

Fuel Cell +

Heat

Recovery

2,710 2.99 6 $0

002

(67.3)

EPG Fuel Cell,

LLC (Triangle)Danbury*

Fuel Cell +

ORC15,057 2.91 6a $2.95



Scoring Summary:Not Recommended

EWG Rank Project Name (#)

Levelized Contract Price

(¢/kWh)1 Bloomfield (008) 18.792 Bridgeport (005) 17.633 Trumbull (009) 19.654 Glastonbury (007) 18.555 Cube (001) 17.806 Hartford (006) 19.857 Triangle (002) 19.66

Internal Working Document – For Discussion Purposes20

Levelized Contract Prices

Alternative Proposalswithout ITC/PTC extension


Status if no ITC/PTC

extension

# of Proposals # of MW

Withdrawn 4 (#s 001,002,005,006)

35.3(14.294 of recommended)

No change 3(#s 007,008,009)

9.8

22

Evaluated the impact of: Future electricity/natural gas price trajectories

(base, low, high) Future REC price trajectories

(base, low, high)

Some reordering within short list, and not-recommended group, but no shifts

between groups

For perspective, also calculated… Ranking w/o CCEF funding $

‘Cube’ Project would jump from 5th to top-ranked Approximate utility ranking on ratepayer cost only w/o CCEF funding $

‘Cube’ Project would jump from 5th to top-ranked, BFCP straddled the cutoff

Sensitivity of Resultsto Key Variables


The recommended results are resilient!

Base Case Results


Sensitivity Analysis: High Electricity & Natural Gas Prices


Sensitivity Analysis: Low Electricity & Natural Gas Prices



Sensitivity Analysis: High REC Prices

Sensitivity Analysis: Low REC Prices


Sensitivity Analysis: CCEF Funding Not Included


Sensitivity Analysis: Rate Impact Ranking without CCEF $


Approximates Expected Utility Rankings

Project Proposal Summaries


31

Fuel Cell Energy – DFC-ERG Bloomfield Location:

Bloomfield, CT (outside SWCT) At CNG pressure letdown/gate station

Description: Molten Carbonate Fuel Cell with turbo

expander “Energy Recovery Generator”

Turbo expander captures energy lost in a gate station pressure reducing valve

Eliminates need for gas-fired heaters 3.367 MW total (~850 kW from ERG)

Team Experience: Fuel Cell Energy - Manufacturer Enbridge Inc. – A major fuel supplier &

N. America energy player, as developer

Energy East/CNG – Fuel supplier, holds title to the land and access to the pressure let down station

BOC Cryostar, Inc. – world leader in radial inflow turbine technology.

Project Status: Interconnection – prelim. CL&P discussions Permit applications – pending Site control established – host on the team Design – Conceptual engineering completed

Requested additional CCEF $: 0

Contract Term: 20 years NPV Rate Impact incl. CCEF $:

Total: $12.0 million Per MWh: $23.57

Other: 50% RECs retained

Project 008 Fuel Cell with turbo expander


32

Fuel Cell Energy – DFC-ERG Bloomfield Strengths

Innovative use of technologies

Strong project team

Limited technology risk

Highly efficient use of thermal output

Local support for project

No additional CCEF $ requested

Least expensive fuel cell project

Weaknesses

Limited operating experience with 2.8 MW units

Limited development progress

Fuel Cell with turbo expanderProject 008


-5 5 15 25 35 45 55

Ratepayer Cost

Benefits to CT

Financial Viability

Feasibility

Project 8: DFC ERG - Bloomfield

Final Score

Total Potential

Average Cat. Score

33 Internal Working Document – For Discussion Purposes

Bridgeport Fuel Cell Park Location:

Bridgeport, CT (Primary SWCT)

Description: Molten Carbonate Fuel Cell Organic Rankine bottoming cycle 14.3 MW total (~ 930 kW from ORC)

Team Experience: Fuel Cell Energy – Manufacturer and

co-developer PurePower, LLC – A firm specializing

in developing large scale fuel cell projects in CT

PinPoint Power, LLC – Develops, owns and manages power generating and DSM equipment in the Northeast

Project Status: Interconnection – UI feasibility study

complete; SIS & FS outstanding Permit applications – Approved by Siting

Council. Preliminary permitting review completed, no major issues identified

Site control estab. - Signed lease option Design – Preliminary design completed

Requested additional CCEF $: $1.5M

Contract Term: 15 years

Rate Impact: Total: $49.6 million Per MWh: $28.35

RECs: 100% RECs retained REC value > $10 reduces price

Project 005 Fuel Cell w/ ORC


Bridgeport Fuel Cell ParkStrengths Redevelopment of a brownfield site

Advanced permitting and development status

Strong city support

Strong project team

Improved recovery of waste heat in ORC

Creative price modifier: returns REC value in

excess of $10/MWh to ratepayers

Weaknesses Limited operating experience with 2.8MW units

Of recommended projects, most expensive

ratepayer impact per MWh

Fuel Cell w/ ORCProject 005

-5 5 15 25 35 45 55

Ratepayer Cost

Benefits to CT

Financial Viability

Feasibility

Project 5: Fuel Cell Energy - BFCP

Final Score

Total Potential

Average Cat. Score

35

Fuel Cell Energy – DFC-ERG Trumbull Location:

Trumbull, CT (primary SWCT) At SCG pressure letdown/gate station


expander “Energy Recovery Generator” Turbo expander captures energy lost in a

gate station pressure reducing valve Eliminates need to run gas-fired heaters 3.200 MW total (~600 kW from ERG)

Team Experience: Fuel Cell Energy - Manufacturer Enbridge Inc. – A major fuel supplier and

N. America energy player, as the developer

Energy East/CNG – Fuel supplier, holds title to land &access to pressure let down


Project Status: Interconnection – prelim. UI discussions Permit applications – pending Site control established – host on the team Design – Conceptual engineering

completed







36

Fuel Cell Energy – DFC-ERG Trumbull Strengths


Strong project team





Weaknesses



Fuel Cell with turbo expander

Project 009


-5 5 15 25 35 45 55

Ratepayer Cost

Benefits to CT

Financial Viability

Feasibility

Project 9: DFC ERG - Trumbull

Final Score

Total Potential

Average Cat. Score

37

Fuel Cell Energy – DFC-ERG Glastonbury Location:

Glastonbury, CT (outside SWCT) At CNG pressure letdown/gate station


expander “Energy Recovery Generator” Turbo expander captures energy otherwise

lost in a gate station pressure reducing valve

Eliminates need to run gas-fired heaters 3.200 MW total (~600 kW from ERG)

Team Experience: Fuel Cell Energy - Manufacturer Enbridge Inc. – A major fuel supplier and N.

America energy player serv. as developer Energy East/CNG – Fuel supplier, holds

title to land &access to pressure let down station


Project Status: Interconnection – prelim. CL&P discussions Permit applications – pending Site control established – host on the team Design – Conceptual engineering completed



NPV Rate Impact incl. CCEF $: Total: $12.1 million Per MWh: $24.73




38

Fuel Cell Energy – DFC-ERG Glastonbury Strengths


Strong project team





Weaknesses



Fuel Cell with turbo expanderProject 007


-5 5 15 25 35 45 55

Ratepayer Cost

Benefits to CT

Financial Viability

Feasibility

Project 7: DFC ERG - Glastonbury

Final Score

Total Potential

Average Cat. Score


Elemental Power – ‘Cube’ Project Location:

Danbury, CT (Secondary SWCT)

Description: Molten Carbonate Fuel Cell Waste heat drives an un-fired

combustion turbine – generator in a Brayton cycle

3.2 MW total (~ 500 kW from turbine)

Team Experience: EPG Fuel Cell – Subsidiary of

Elemental Power Group, a company formed to develop own and operate clean renewable energy projects

Catamount Energy - financier Fuel Cell Energy – Manufacturer

Project Status: Interconnection – Application submitted to

CL&P Permit applications – prepared for filing Site control established – affiliate has lease Design – conceptual design complete

Requested additional CCEF $: $3 M


Rate Impact: Total: $13.5 million Per MWh: $25.78


Project 001 Fuel Cell with Unfired Combustion Turbine


Elemental Power – ‘Cube’ ProjectStrengths Efficient configuration: low heat rate

Local zoning changes already made to

accommodate projects – i.e. strong

town support

Strong development team

Innovative combination of existing

technologies

‘Load reducer’ treatment gives more

immediate FCM value

Weaknesses

Limited operating experience with 2.8MW units Technology is scale-up of a pilot

Highest $ request from CCEF, by far

Fuel Cell with Unfired Combustion Turbine

Project 001

-5 5 15 25 35 45 55

Ratepayer Cost

Benefits to CT

Financial Viability

Feasibility

Project 1: EPG Fuell Cell - Cube

Final Score

Total Potential

Average Cat. Score

41

Ten Companies Inc. – Hartford Fuel Cell Location:

Hartford, CT (outside SWCT)

Description: Molten Carbonate Fuel Cell CHP with heat recovery for district steam 2.700 MW total

Team Experience: Energy East (utility owner of both gas

supplier and steam company)

Project Status: Interconnection – prelim. CL&P discussion Permit applications – scoped Site control established – own site Design – Conceptual engineering completed





Project 006 Fuel Cell CHP


42

Ten Companies Inc. – Hartford Fuel Cell Strengths Self-financing

Ease of integration with site uses (other generation, steam plants)


CHP = Efficient use of thermal output


Weaknesses Limited operating experience with

2.8MW units


Highest ratepayer impact metric

Fuel Cell CHPProject 006


-5 5 15 25 35 45 55

Ratepayer Cost

Benefits to CT

Financial Viability

Feasibility

Project 6: TEN Companies Inc. - Hartford FC

Final Score

Total Potential

Average Cat. Score


Elemental Power – Triangle Project Location:

Danbury, CT (Secondary SWCT)

Description: Molten Carbonate Fuel Cell Organic Rankine bottoming cycle 15.1 total MW (~ 950 kWh from ORC)

Team Experience: EPG Fuel Cell – Subsidiary of Elemental

Power Group, a company formed to develop own and operate clean renewable energy projects

Catamount Energy - financier Fuel Cell Energy – Manufacturer

Project Status: Interconnection – Application submitted to

ISO-NE, directed to submit a distn . level interconnect, CL&P feasibility study in process

Permit applications – Near completed Site control established – under lease Design – conceptual design complete

Requested additional CCEF $: 3M Contract Term: 15 years Rate Impact:



Project 002 Fuel Cell with ORC


Elemental Power – Triangle ProjectStrengths Straightforward interconnection

Local zoning changes already made to

accommodate projects – i.e. strong

town support

Strong development team

Using Organic Rankine Cycle to

maximize efficiency (replicable

technology improvement)

Weaknesses Limited operating experience with 2.8

MW units Large CCEF $ request

High ratepayer impact metric

Fuel Cell with ORCProject 002

-5 5 15 25 35 45 55

Ratepayer Cost

Benefits to CT

Financial Viability

Feasibility

Project 2: EPG Fuel Cell - Triangle

Final Score

Total Potential

Average Cat. Score

Process & Timing

Next Steps Select proposals to recommend to the CCEF Board

CCEF Board Meeting Monday, Sept. 15, 2008

Recommendations submitted to DPUC and Utilities Tuesday, Sept. 16, 2008

Written testimony in support of CCEF recommendations Scheduled October 6, 2008

Hearings scheduled Oct. 22-24, 2008

Draft decision scheduled Dec. 16, 2008

Final decision scheduled Jan. 7, 2009


project 150 evaluation working group

Documents

evaluation methods

evaluation committeeinternal

weightsreview proposals

project diversity

pipe project

net ratepayer impact

ratepayersnpv ratepayer

face project interviews