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The Supply Side Mark Ohrenschall Con.Web, October 29, 2004

Council Advocates Wind Issues Exploration,
Supply-Side Resource Preparation Activities in Coming Years

The Northwest Power and Conservation Council's draft power plan emphasizes energy-saving actions over the next five years.

Yet the plan also encourages some near-term supply-side resource activities, including an extensive look at issues surrounding a big expansion of Northwest wind energy development. It advocates preparations for building coal-fired power plants as early as 2010, and wind farms slightly later. New natural gas-fired resources play a lesser and later role in the Council's long-range plan, owing to higher and volatile gas prices.

This Council blueprint comes amid a current surplus of regional power resources--estimated at 1,000 average megawatts for 2004--attributed to lower demand and new plants built earlier this decade.

However, the Council's supply-side guide has at least two notable caveats.

For one, individual Northwest utilities may need new power resources for their own circumstances, such as more peaking capacity or reducing market purchases, the Council said. In fact, all six major Northwest investor-owned utilities are actively seeking, or planning to seek, new generating resources before 2010.

In addition, the Council's draft plan said more new regional generation could be required later this decade if power demand surges, existing capacity diminishes and/or conservation efforts falter.

Conversely, the plan noted, "To the extent regional utilities build generating resources in the near term, the regional surplus will be extended and the need for additional generating resources will be deferred."

Supply-Side Action Agenda: Wind, Construction Preparation, Lost Opportunities

The action agenda in the Council's draft plan centers on conservation (see related story), but also covers supply-side work in three broad categories: an examination of large-scale wind development issues, preparation for building new plants after 2009 and pursuit of so-called "lost opportunity" resources, such as combined heat/power and biomass.

Wind power, the draft plan notes, "is expected to play a much-expanded role in the region." This is driven by potential carbon dioxide emission policies, lower costs, technology gains and rising and unstable natural gas prices.

The Northwest already hosts more than 500 megawatts of wind capacity, and several hundred megawatts more are in various development stages. But, according to Council senior resource analyst Jeff King, many questions remain about wind's true regional potential. "What we don't know very well is can it grow to 4[,000] to 5,000 megawatts, at least under the conditions we're assuming in the plan ... There's a lot of uncertainty there. If [wind is] going to be a big player in the long term, now's the time to figure out if it can be a big player."

He listed shaping costs and transmission availability as among specific unresolved issues for big wind.

The Council also wants to explore prospects for wind development in different parts of the Northwest--King mentioned Central Washington, Southern Idaho and Montana--to learn more about the effects of such geographic diversity. Existing Northwest wind farms are gathered along the Oregon-Washington border, east of the Columbia River Gorge.

"What I think we're looking for here are projects that are generally representative of what could be a considerably larger scale of [wind] development," King said.

Some of these questions have already been regionally examined to some extent, he said, such as integration costs.

But more answers are needed. "Over the next few years, the plan calls for gathering more experience and information about wind resources and their performance and cost within the regional power system through limited commercial-scale development," the Council said.

Another main supply-side task is preparation.

"The region should secure sites and permits to be prepared to start construction of new coal generating resources as early as 2010 with additional wind generation shortly thereafter," the draft plan summarized.

Coal's presence as a resource of choice is attributed to three main reasons, according to King: less costly generating technology, stable and potentially lower long-range fuel costs, and higher natural gas prices. Those advantages counter the risk of future carbon dioxide emissions penalties, in the Council's view of the future. The most likely place for new coal-fired plants is Montana, with power delivered westward, King said.

Improved coal-fired generating efficiencies and affordable carbon sequestration methods "would further increase the attractiveness of coal generation," the draft plan said.

As for natural gas, which has been the regional power fuel of choice in recent years, "New gas-fired generation does not figure in this power plan until late in the [20-year] planning period, largely because of higher gas prices and the expectation of greater volatility in gas prices," the plan said. "Nonetheless, it could figure prominently later in the planning period as the more promising wind sites are developed and carbon emissions concerns become more significant."

The Council also encourages actions for transmission: "Needed transmission upgrades should be identified so all these resources can be constructed and brought on line quickly when required. If major transmission upgrades are needed, that work will have to begin before construction of the power plants."

A third supply-side focus in the Council draft plan involves so-called "lost opportunity" resources: " ... efforts to identify and develop cost-effective lost-opportunity generating resources, including combined heat and power (cogeneration) and biomass applications, should be reinforced."

King said such ventures "generally solve more than one problem," such as waste disposal in the case of biomass. Commercial/industrial cogeneration ventures, meanwhile, offer "really attractive" environmental and economic benefits, he said.

Although not yet ready for a leading role, some promising resources warrant a closer look in the coming years at their availability and costs, the Council plan said. It lists oil sands cogeneration, coal gasification, carbon sequestration, energy storage technologies and demonstration of renewable/high efficiency generation.

Geothermal and solar resources don't figure prominently in the Council's draft plan.

King said geothermal potential is "pretty localized" and may amount to a few hundred megawatts in the next 20 years, at reasonable costs. Solar has many viable small-scale applications, King said, but its prospects as a major regional energy resource are limited by high costs.

The Council plan also suggests a "policy framework to ensure the ability to develop needed resources." It advocates voluntary resource adequacy targets for the Northwest and West and continuing regional activities to address transmission issues. Bonneville Power Administration's post-2006 role in power supply also is included in this category.

Finally, the Council wants to monitor developments that could affect the plan, listing load-resource balance, conservation achievements, wind understandings and climate change science and policy.

Related Pages:
Draft Fifth Power Plan (including Action Plan and Conservation Acquisition Strategies)