EXETER A SSOCIATES, I NC. March 29, 2006February 17, 2008 1 New Transmission Initiatives for Renewable Energy and Some Thoughts on Wind Integration Kevin.

EXETERASSOCIATES, INC.

March 29, 2006February 17, 2008

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New Transmission Initiatives for Renewable Energy and Some Thoughts on Wind

Integration

Kevin Porter

NARUC Winter Meetings Staff Electricity Committee

Washington, D.C.

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Presentation Outline

Transmission Initiatives for Building Transmission in Advance of Generation

Basic thoughts on wind integration Sources of additional information

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Renewable Energy and Transmission

“Chicken and egg” problem can be quite severe with transmission and renewable energy Renewable energy developers do not always have the

financial capability to support large-scale transmission investments

Transmission is not built because it is not evident that renewable energy projects will be developed to use the transmission

Various initiatives underway CA ISO Location Constrained Resource Interconnection Competitive Renewable Energy Zones (Texas, Colorado) Open Season (BPA)

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CA ISO Location Constrained Resource Interconnection

Non-network facilities that would connect at least two eligible and unaffiliated generators in identified energy resource areas

Must go through the CAISO Transmission Planning Process and turned over to the CAISO’s operational control once in operation

Costs are rolled into the CAISO’s transmission access charge until generators come on-line, after which generators pay pro rata share of going forward costs

Demonstrated interest of 60% or more of transmission capacity, of which at least 25% is from interconnection agreements

Limited to 15% of total net high-voltage transmission plant investment of participating transmission owners in CAISO

Approved by FERC in December 2007

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Competitive Renewable Energy Zones

Identifies zones with high clean energy potential and transmission necessary to access it

In Texas and Colorado; description here largely based on Texas

Zones in Texas determined by availability of renewable energy resources, suitability of land and financial commitment of generators to construct renewable capacity. Zones nominated by utilities in Colorado, subject to action by the Colorado PUC.

Recovery of transmission costs Spread across all LSEs in Texas Via rate adjustment clause in Colorado (including planning

and development costs and construction work in progress) In Texas, developers must deposit letter of credit for 10% of

their assigned share of the estimated costs identified in the transmission plan. No such requirement in Colorado

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BPA Open Season

BPA has several proposed projects in interconnection queue BPA has proposed open season to determine zones or clusters

to study for new transmission All requestors of transmission service must participate in open

season or forfeit their position in the BPA interconnection queue

One year’s worth of transmission charges in advance, unless customer pays for transmission upgrade costs in advance

Instead of participant funding, BPA proposes to estimate expected reliability, economic and “future use” benefits of new transmission and recover those in BPA general revenue requirements

Under discussion; may take place later this year

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Basic Issues to Contend With Concerning Wind Grid Integration

Grid operation requires balance between generation and load Wind generation cannot be controlled and scheduled with a high

degree of accuracy Goal is to manage net system variability and net system

uncertainty, not the variability or uncertainty of wind and solar

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Impact of Variable Power Sources

Power system is designed to handle tremendous variability in loads

Wind adds to that variabilitySystem operator must balance

loads=resources and meet reliability standards

It is not necessary or desirable to match wind’s movements on a one-to-one basis

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Wind Myths

For each wind power plant, a conventional generator must be kept standing by in case the wind does not blow

Wind requires storage The wind only generates energy 25-35% of the time (it is really

~80%) These myths have been refuted by

Extensive analysis Operating practice of wind plants around the world

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Factors that Influence Wind Integration

Balancing area size Generation Mix Wind resource geographic diversity Market-based or self-provided ancillary

services Size of interconnected electricity markets

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Lessons Learned So Far The costs for integrating wind is non-zero and increases as the proportion of

wind generation to conventional generating resources or peak load increases. Reserve costs attributed to wind integration are relatively small at wind

penetration levels of less than 20%. These costs generally increase as the level of wind penetration increases.

How the variability and uncertainty of wind generation interacts with variations in load and load forecasting uncertainty has a large impact on the level of wind integration costs.

The level of geographic concentration of wind projects also affects wind integration costs. Greater spatial diversity of wind projects can lessen the fluctuations in wind output and therefore lessen wind integration costs

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Large-Scale Studies in ProcessWestern Wind & Solar Integration Study

30% Wind in footprint, 20% in WECC

Eastern Wind Integration Study

LEGEND

WestConnect LinesCalifornia LinesLADWP LinesDC Lines

Control areas:APSEl PasoNevada PowerPNMSierra PacificSRPTristateTucsonXcelWAPA

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Further Information National Wind Coordinating Collaborative Bi-Monthly

Transmission Update Calls Open to all Next one is March 11th at 1 p.m. Eastern http://www.nationalwind.org/publications/transmission/upd

ates/default.htm

Contact me or Katie Kalinowski at [email protected] Table on RTO market rules and wind power

http://www.uwig.org/windinmarkets.htm Table on New Transmission Proposals

http://www.awea.org/policy/regulatory_policy/transmission_documents/Expansion/Summary_ProactiveTransmissionPolicies_Jan2008.pdf

Wind Integration Studies http://www.uwig.org/opimpactsdocs.html 13

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Further Information (2)

• IEEE Power Engineering Society Magazine, November/December 2005•Updated in 2007• IEEE Wind Power Coordinating Committee Wind Super-Session, Summer 2008• Utility Wind Integration Group (UWIG)

• Spring meetings in Dallas April 16-17

• www.uwig.org

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March 29, 2006

Contact Information

Kevin PorterExeter Associates, Inc.

5565 Sterrett Place Suite 310Columbia, MD 21044

410-992-7500410-992-3445 fax

[email protected]

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Appendix

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Accommodating Higher Levels of Wind and Solar Generation

Flexible, quick response generation with minimum turndown should be emphasized for future resource additions

Note that retirements may accelerate due to variable renewable generation

Market design that encourages and rewards maneuverable generation

Elimination of contractual obligations that thwart maneuverability

Inventory generation capability Consolidate balancing areas, or mimic consolidation

through sharing energy imbalances, area control area, etc.

Price-responsive load and demand response Perhaps plug-in hybrids in the future

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Accommodating Higher Levels of Wind and Solar Generation (2)

New transmission can enhance the grid’s ability to accommodate variable renewable energy generation

Making the most of existing transmission

Explore alternate line/path rating criteria (e.g., wind plants would rarely be at full output simultaneously due to spatial diversity)

Explore new technologies, including:

Real-time line ratings

Controls to manage output from multiple variable renewable resources

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Accommodating Higher Levels of Wind and Solar Generation (3)

Curtailment – reduce or limit output of intermittent generation (wind) during periods of low load and high wind and high hydro

Forecasting – Encourage development and use of improved wind and solar forecasting methods

Day-ahead for unit commitment on grid-wide basis

Hour-ahead for real time operation

Monitoring – Record and archive operational data from existing new intermittent renewable generation (meteorological and MW)

Verify actual operational characteristics versus expectations

Refine operating practices, performance, and flexibility requirements

Data for future studies of grid operation and performance with increased intermittent renewable generation