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Economic and dam related articles

NW Power System can Handle More
Wind Energy, but More Work is Needed

by BPA / NWPCC
ElectricNet, April 11, 2007

Portland, OR -- Wind power projects are being rapidly developed throughout the Northwest, and the region's existing power system can most likely accommodate the 6,000 megawatts of wind energy anticipated by 2024 -- or perhaps much sooner given the current pace of development. However, there will be costs to incorporate these new wind sources as well as a need for additional investments in high-voltage transmission lines, new regulatory and utility cost recovery policies and recognition in the Northwest that wind by itself cannot meet the region's future power needs. These are central conclusions in the Northwest Wind Integration Action Plan that was released recently by a group of Northwest energy industry leaders.

The broad group of energy experts releasing this consensus report -- including leaders of state utility commissions, public and investor-owned utilities, wind power developers, renewable power interests, environmental groups and others -- was convened last summer by the Bonneville Power Administration and Northwest Power and Conservation Council. The group's mission was to study all aspects of how to make wind power fit into the region's existing power system.

"This action plan will help the Northwest take advantage of an abundant source of renewable energy while protecting the reliability of the regional power supply," Council Chair Tom Karier said.

"This regional effort concludes that more wind power projects can be incorporated into the Northwest power system," said Steve Wright, BPA administrator. "To maintain a reliable electricity system, there are costs that need to be addressed, transmission resources that need to be built, and wind resources will need to be supplemented by non-wind generation. These challenges can be solved, but we need to get after them."

Key points of the Northwest Wind Integration Action Plan from the consensus view of the Steering Committee

  1. There are no fundamental technical barriers to operating 6,000 megawatts of wind in the Pacific Northwest. There is a range of estimated costs associated with integrating wind into the Northwest system necessary to assure reliable service. When wind energy is added to a utility system, its natural variability and uncertainty is combined with the natural variability and uncertainty of loads. As a result, there is an increase in the need for flexibility services required to maintain utility system balance and reliability.
  2. Conceptually, the cost of wind integration starts low, particularly when integrating with a hydropower system that has substantial flexibility, and then rises as increasing amounts of wind are added. Costs ultimately plateau at the cost of integrating wind with natural gas power plants.
  3. With increasing amounts of wind, there will likely be times when large, unexpected changes in wind output (so-called "ramping events") coincide with periods of limited hydro flexibility. Initial analyses indicate that these will be low probability events, but if other sources of flexibility are not available at the same time, system operators will need to limit wind output for brief periods in order to maintain reliability. The Federal Energy Regulatory Commission now requires wind plant operators to help protect system reliability. Northwest utilities and wind developers are collaborating to implement the requirement in a mutually satisfactory and cost-effective manner.
  4. Wind energy is providing value to Northwest electricity consumers, but the Northwest will still need other resources to meet peak loads. The fundamental value of wind is its ability to provide energy to displace fossil fuel consumption, limit exposure to uncertain and volatile fuel prices and hedge against possible greenhouse gas control costs. Wind is primarily an energy resource with relatively little contribution to meeting system peak requirements. Wind by itself cannot provide reliable electric service, and the Northwest will need to build other resources to meet growing peak loads.
  5. In the very short term there is available transmission capacity to integrate additional wind resources -- but this is not expected to last for long. New transmission will be needed and can help open up new areas for wind development, helping to diversify wind production. This diversity helps smooth variability and therefore lowers the cost of wind integration. Because wind operates at its nameplate capacity a relatively small fraction of the time, traditional models for transmission development and marketing will need to be altered to achieve greater economic efficiency. A more economical and efficient approach for a resource such as wind is to provide a mix of firm, nonfirm, and conditional firm transmission that achieves a balance between the cost of transmission capacity and the value of delivered wind energy.
  6. The major portion of wind integration costs will be incurred due to additional efforts by system operators to balance loads and resources in real time in order to accommodate wind variability. These entities must have flexible resources available to them to ensure that reliable service will be maintained and that there is an ability to recover the associated costs.
  7. We can increase integration capability and lower integration costs.
The cost of wind integration services can be reduced through generally four types of actions: (1) encourage more cooperation among regional utilities to spread the variability of wind more broadly; (2) develop markets that will reward entities with existing flexibility who choose to market that flexibility; (3) make more low-cost flexibility, such as that provided by hydroelectric resources, available; and (4) create and apply new flexibility technologies. Producing these results will require coordination. Fortunately, the region has a long history of forging cooperative agreements designed to increase the value for all regional consumers that provide a model for what will be needed over the next several years to address wind integration issues. The Northwest Wind Integration Action Plan will serve as a guide for utilities and state regulatory commissions as they plan their resource strategies in the future. To review the action plan, visit the Council's Web site at www.nwcouncil.org/energy/Wind/Default.asp

What Steering Committee members are saying about the Northwest Wind Integration Action Plan Bonneville Environmental Foundation, Portland, Ore.:
"This important work is the necessary, if not sufficient, first step in establishing how wind will become a significant, cost-effective source of zero-carbon electricity for the Pacific Northwest," said Angus Duncan, president of the Bonneville Environmental Foundation. "It demonstrates that the technical requirements for integrating 6,000 megawatts of wind into the system can be met and it points us to the cost solutions. Northwest states that are mandating renewable energy requirements for utilities should be applauding this important work and strongly supporting the next phase of the project."

Bonneville Power Administration, Portland, Ore.:
"Six months ago, this coalition of energy leaders rolled up its sleeves to look for ways to make intermittent power sources such as wind fit with the largely hydro-driven electric power system we have here in the Northwest," said Steve Wright, BPA administrator. "This plan is the result of an incredible investment of collaboration, discussion and analysis by many people. Because everyone focused on really listening to each other, we arrived at outcomes that are meaningful for the region."

Grant County PUD, Ephrata, Wash.:
"I would like to acknowledge the efforts of everyone involved in this process, including Bonneville Power Administration, Northwest Power and Conservation Council, the Wind Integration Action Work Group, and, especially, the technical work group," said Tim Culbertson, general manager of Grant County PUD. "This effort is of significance to the region because there is a false sense of how much an already constrained hydro system is capable of firming as we continue to develop these ‘wind resources.' This is a regional issue that will take joint cooperation to solve."

Northwest Power and Conservation Council, Portland, Ore.:
"Wind power is a major resource to meet future demand for electricity, along with energy conservation. The Northwest Power and Conservation Council's Northwest Power Plan calls for developing 6,000 megawatts of cost-effective wind power in the region by 2024," said Tom Karier, chair of the Council. "The Wind Integration Action Plan complements the Council's power plan by highlighting the importance of wind in the regional power supply and identifying the technical and policy issues that need to be addressed in order to fully integrate this abundant renewable resource with other sources of electricity."

Oregon Public Utility Commission, Salem, Ore.:
"The report shows the region is well-positioned to accommodate 6,000 megawatts of new wind energy. That is exciting," said John Savage, OPUC commissioner. "However, to achieve wind's full potential, there are issues that must be resolved. It will require a coordinated effort to ensure that consumers in Oregon and the Northwest benefit from clean, renewable energy in the future."

Pacific Power, Portland, Ore.:
"With the Northwest Wind Integration Plan, the region's utilities are taking initial steps to ensure we have the necessary backup resources for when the wind isn't blowing, and new transmission lines to bring the variable wind resource to customers," said Pat Reiten, president of Pacific Power. "That is very important to our company, as the leading utility renewable energy developer in the region. Pacific Power has recently added nearly 350 megawatts of new renewable resources, most of it wind, and expects to add another 1,000 megawatts by 2015. Pacific Power customers have generously supported our voluntary Blue Sky program to add even more renewables to our regional mix. The integration plan recognizes both challenges and opportunities in making wind power a steady and dependable resource for the region."

PNGC Power, Portland, Ore.:
"This action plan represents a remarkable collection of the industry's best and brightest minds focused on developing a strategy to deal with the pending large amount of wind energy forecasted to be installed in the Northwest. The plan explores the issues with integrating an intermittent resource into an electrical system that requires that generation production must exactly match the changing demand for electricity every second of every day," said John Prescott, president and CEO of PNGC Power. "The plan points out the technical issues and costs associated with solving these issues. The most important action mentioned in the plan is the need for the region to work collaboratively to solve these identified problems. It also clearly identifies the need for new transmission."

PPM Energy, Portland, Ore.:
"PPM Energy is pleased to see so many important energy participants looking at new wind resources as a growing part of the region's energy supply," said Terry Hudgens, CEO of PPM Energy. "This study shows that it's entirely feasible to add a significant amount of wind generation to the regional energy mix."

Puget Sound Energy, Bellevue, Wash.:
"We expect wind power to play an increasingly significant role for us in coming years," said Eric Markell, senior vice president of Energy Resources for Puget Sound Energy, already the Pacific Northwest's largest producer of renewable energy with the utility's two wind farms -- Hopkins Ridge in Columbia County and Wild Horse in Kittitas County. "There are challenges, yes, for widespread regional development of new wind resources, primarily in siting new wind farms and moving their power output to where it's needed. But the people in our region, I believe, support wind power and want to see it become an integral part of our energy future."

Renewable Northwest Project, Portland, Ore.:
"It's great to see the region engaged in finding solutions to incorporate more clean energy into our region's electricity supply mix," said Rachel Shimshak, director or the Renewable Northwest Project. "Continued cooperation will be needed to identify ways to reduce costs even further and to keep the momentum going. It's an especially important topic in this increasingly carbon-constrained world."

Seattle City Light, Seattle, Wash.:
"Seattle City Light is committed to the success of the Wind Integration Action Plan. New renewable energy sources are an important element of our Integrated Resource Plan and wind is one component for us in meeting load growth in the next twenty years," said Jorge Carrasco, superintendent of Seattle City Light. "BPA's wind integration study looks comprehensively at how we get to an electricity grid that can more easily welcome this new source of low carbon, clean energy."

Western Montana Electric Generating and Transmission Cooperative, Missoula, Mont.:
"The report demonstrates that the operational and transmission hurdles presented by wind generation are not insurmountable, but wind presents some unique challenges that need to be addressed," said Bill Drummond, manager of Western Montana Generating and Transmission Cooperative. "Much work on these issues remains to be completed."


BPA / NWPCC
Northwest Power System Can Handle More Wind Energy, But More Work Is Needed
ElectricNet, April 11, 2007

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