A primer on wholesale electricity markets - and how they impact forest products industries.

1. Electricity 101
FRA Forest Forum
January 2024
Eric Kingsley
Innovative Natural Resource Solutions LLC
kingsley@inrsllc.com
Phone 207-233-9910
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2. Innovative Natural Resource Solutions LLC
• Founded in 1994
• Offices in New Hampshire and Maine
• Focus at the intersection of forest industry, energy and
economic development
• Services include:
- consulting in renewable energy
- forest industry consulting
- advocacy
- forest certification and sustainability
• Clients from the private, non-profit and government sectors
• Conducted work in all regions of North America
• www.inrsllc.com
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3. Electricity Basics

4. U.S. Electric Grids

6. Cost of Generation by Source
Unsubsidized
Note: National data, Maine / New England may vary
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
Solar PV Onshore
Wind
Natural Gas
CC
Advanced
Nuke*
Coal Biomass Offshore
Wind
Estimated Cost of Generation, $ / MWh
EIA 2020 EIA 2015 INRS

7. Building a Wind Farm
More Expensive in Maine than Iowa

8. Hypothetical Generation Cost Curve

10. Average price: $41.15

16. Renewable Portfolio
Standard

18. Maine Renewable Portfolio Standard
0%
10%
20%
30%
40%
50%
60%
70%
80%
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Class 1 Class 2 T-RECs

19. Renewable
Electricity
(MWh)
“Green” Attributes
(Renewable Energy Certificate)
Electricity (MWh)
(Wholesale)

20. Resources to Comply with Maine RPS, 2021

21. Cost of Compliance with Maine RPS, 2021
$ per Month,
household
Total $
(million)
$ per REC
$ 0.82
$ 18.8
$ 13.52
Class 1
$ 0.68
$ 15.6
$ 3.77
Class 2
$ 0.04
$ 0.9
$ 23.98
Thermal RECs
$ 1.54
$ 35.3
Total

22. Biomass

23. 23
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Jul-24
Sep-24
Nov-24
Jan-25
All Hours Real Time Futures
ISO – New England Wholesale Electricity Prices

24. What does it take to operate stand-alone biomass electric
now through 2024?
$0
$20
$40
$60
$80
$100
$120
Revenue Expenses
Electricty RECs (CT) Fuel O&M
• Assumes:
• Electricity at average price for the next
year ($58.54, recent futures market
through January 2025)
• RECs at recent broker quote ($30)
• Biomass fuel at $40 (made up price), 1.6
green tons per MWh, $64 fuel per MWh
• O&M at $35 per MWh
• With these assumptions, this is a
break-even(ish) business. Focus on
cost control critical to successful
operations
• No new construction
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25. Eric Kingsley
Innovative Natural Resource Solutions LLC
Phone 207-233-9910
Email kingsley@inrsllc.com
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