1. PJM©2012 Offshore Wind Integration Studies at PJM September 13, 2012 Steven Herling Vice President, Planning PJM Interconnection

2. PJM©2012 2 2010 RTEP - Conceptual Offshore Wind Study www.pjm.com Reliability + Market Efficiency Entirely Offshore Wind Injected at 4 locations –Hudson, Larrabee, Indian River, Fentress 4 Scenarios –No wind –10 GW, 20 GW, 30 GW Conclusion –Market efficiency simulated almost no wind curtailment at 10GW peneteration. –Moderate curtailment at 20GW penetration –Major curtailment at 30GW penetration

3. PJM©2012 3 2011 RTEP RPS Scenario Studies Satisfy RPS needs with PJM resources Multiple sourcing scenarios for ~ 40 GW total of wind –20 GW offshore –4 GW offshore Study identified congestion at the injection points that would require significant transmission investment.

4. PJM©2012 2012 RTEP Analysis

5. PJM©2012 5 2012 RTEP Building off the work done in the 2011 RTEP Evaluating three sourcing scenarios to meet PJM RPS requirements in 2027 –36 GW wind and 3.6 GW solar –Scenario 1 – source all RPS from within PJM with 7 GW offshore wind and 29 GW from land-based wind –Scenario 2 – source all RPS from land-based resources –Scenario 3 – wind sourced 60% internal to PJM and 40% from MISO / SPP

6. PJM©2012 6 2012 RTEP – Preliminary Analysis Purpose –Initial modeling and analyses focused on validating the ability of the production cost simulation tools to model a system similar to the AWC project including offshore wind resources interconnected via HVDC. –Leveraged modeling and analysis done as part of the 2011 RTEP

7. PJM©2012 7 Preliminary set of PROMOD runs using last year’s base case: Study year 2016 PJM Deactivations not modeled 2011 RTEP power flow case (no MAPP, PATH) Gas forecast: Henry Hub ~7 $/MMBtu HVDC Terminals & Wind Injection Points: Hudson1 (PSEG) Cardiff (Atlantic Electric) Indian River (DP&L) Navy (Dominion) Offshore wind profile parameters (NREL data) : CF 47% Annual Total Energy ~16,401 GWh for 4000 MW nameplate HVDC lines modeled with no losses, no operating restrictions. Input Assumptions

8. PJM©2012 8 IdxScenario Description AWC Wind Install Cap (MW) Topology Comments HudsonCardiffIndRivNavy HVDC Offshore Radial Lines AWC00 Base Scenario No HVDC Offshore, No radial lines No Wind No Base Scenario AWC01 Base Scenario with HVDC Offshore No Wind YesNo Shows the impact of HVDC lines even without wind injections. AWC02 Hudson 4000MW Scenario with HVDC Offshore 4000MW Wind @ Hudson 4,000 YesNo 4000MW wind installed at Hudson AWC03 Cardiff 4000MW Scenario with HVDC Offshore 4000MW Wind @ Cardiff 4,000 YesNo 4000MW wind installed at Cardiff AWC04 4 x 1000MW Scenario with HVDC Offshore 4 x 1000MW Wind 1,000 YesNo 1000MW wind each at Hudson, Cardiff, Indian River, and Navy AWC05 Hudson 4000MW Scenario radial line into Hudson 4000MW Wind @ Hudson 4,000 NoYes Same as Scenario AWC02, no HVDC lines AWC06 Cardiff 4000MW Scenario radial line into Cardiff 4000MW Wind @ Cardiff 4,000 NoYes Same as Scenario AWC03, no HVDC lines AWC07 4 x 1000MW Scenario radial lines 4 x 1000MW Wind 1,000 NoYes Same as Scenario AWC04, no HVDC lines 1. The Market Efficiency scenarios for this study were derived from last year's interregional base case. AWC Scenarios Overview

9. PJM©2012 9 Offshore Flows – HVDC Tie Flows

10. PJM©2012 10 Results shows that the flows going onshore, out from the HVDC terminals, are indifferent to the wind injection point - PROMOD yields the optimal onshore injection pattern no matter of the particular position of the wind farm on the HVDC. Indian River appears to be the preferred injection point - may be a factor of the number of flow gates (or lack thereof) modeled for Delmarva peninsula. There is no wind curtailment, the wind profile is used at full capacity. Flows from Navy HVDC terminal always heavy into the HVDC line, going north. The total net flows toward shore, in the base case, is not zero, due to a small amount of bus load at the injection points. Onshore Flows (Net Flow from HVDC terminals)

11. PJM©2012 11 The charts show the incremental LMP impact (On-Peak and Off-Peak) of adding the stand-alone HVDC system to the Base Case, then adding the Offshore Wind to the HVDC System. LMP Impacts

12. PJM©2012 12 LMP Impacts – Radial Injection vs. HVDC

13. PJM©2012 13 LMP Impacts – Radial Injection vs. HVDC

14. PJM©2012 14 Update modeling consistent with 2012 RTEP Assumptions  Footprint includes PJM, MISO  2017 updated power flow topology  Updated Gas forecast: Henry Hub ~4.9 $/MMBtu  PJM Announced Deactivations  Installed Renewable Resources consistent with the RPS requirements of PJM states. Consider the states request requirements:  7000MW Offshore Wind  AWC HVDC System modeled as controllable system to optimize the wind injection.  Study year 2023  Customized outputs reports by state: production cost savings; avoided congestion savings; pollution reduction benefits, etc. Next Steps

15. PJM©2012 15 2012 RTEP – 7GW Radial Injection www.pjm.com

16. PJM©2012 16 2012 RTEP – 7GW Offshore with HVDC Interconnection www.pjm.com

17. PJM©2012 17 Offshore Wind Joint Study – NCTPC PJM is also engaged in a joint study with the North Carolina Transmission Planning Collaborative. Evaluating three scenarios –1000 MW injection at Landstowne, Morehead City and Southport –2000 MW injection at Landstowne and 1500 MW injection at Morehead City and Southport –4500 MW injection at Landstowne and a 3500 MW injection at Morehead City and a 2000 MW injection at Southport Reliability analysis of the three scenarios is in-progress www.pjm.com