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by Sandy Smith, Utility Wind Integration Group
Industry experts and advocates have projected that wind could
contribute up to 20 percent of U.S. energy supply by the year 2030.
One major obstacle for achieving that goal is the inadequacy of the
transmission system as it currently exists. Put simply: where wind
is, transmission generally isn't.
There are a number of policy initiatives in place or getting
underway to address this limitation. Some are nationwide in scope,
such as the National Interest Electric Transmission Corridors, which
the U.S. Department of Energy is responsible for designating under
the Energy Policy Act of 2005. Others have a more regional focus,
such as the activities of the Wyoming Infrastructure Authority in
identifying, siting, and building transmission to carry energy from
areas where wind (along with fossil fuels) is plentiful to other
parts of the country.
Texas, which
overtook California last year in the American Wind Energy
Association's rankings as the state with the most wind capacity, has
implemented a plan that could help the state hang on to that title
for some time. In 2005, the Texas legislature passed a bill
increasing the state's Renewable Portfolio Standard, or amount of
electricity which utilities must obtain from renewable resources, to
5000 MW by 2015.
Realizing that the key component for meeting this objective
consists of electricity generated in wind-rich West Texas,
necessitating upgrades to the transmission grid, the legislature
called for the designation of Competitive Renewable Energy Zones
(CREZ). The CREZ concept flips the existing transmission planning
process around by planning ahead for transmission in wind-rich areas
so that when new generation is ready to connect to the grid, the
lines are already there.
Texas occupies a unique place in transmission planning circles
because roughly 85 percent of its transmission does not cross state
lines and is therefore not subject to Federal Energy Regulatory
Commission (FERC) regulation. The state's separate grid is
controlled by the Electric Reliability Council of Texas (ERCOT), an
independent system operator that in essence, operates the state's
electricity market. The fact that the state can act on its own on
electricity regulation and transmission has facilitated
out-of-the-box thinking on how to accommodate the growth of
renewable energy.
There is plenty of activity related to wind power project
development underway in Texas, and more is to come. According to
ERCOT there is 2,992 MW of wind generation currently in operation on
their system, with an additional 1,701 MW planned through 2008. This
does not include that part of the grid that is not under ERCOT's
control. ERCOT reports that there is 2,600 MW of publicly-announced
projects in their interconnection queue and almost seven times that
number of MW in the queue that has not yet been publicly announced.
On paper, each CREZ is expected to support roughly 1000 MW of
generation and the costs for transmission would be paid for by
ratepayers. Stakeholders with an interest in how CREZs will be
defined and where they will be located had until February to request
the Public Utility Commission of Texas (PUCT) to consider them as
intervening parties. After considering stakeholder input, the PUCT
will rule on July 5 on an unspecified number of CREZ corridors that
are not necessarily limited to the ERCOT system. The remaining
portion of Texas' transmission is located within the Southwest Power
Pool (SPP). The CREZ enabling legislation covers all transmission in
Texas, but transmission to support CREZ areas in SPP territory would
be subject to SPP tariffs, over which Texas has no jurisdiction. The
enabling legislation does not specify who would pay for new
transmission in SPP, a matter that will need to be considered.
A number of companies and organizations have expressed interest
in the CREZ process, requesting hearings or filing petitions to
nominate CREZs. Wind developers such as Horizon Wind Energy, BP
Energy North America, and Shell Wind Energy are participating in the
process. The wind development community has provided assurances to
the State of Texas that wind projects will be put into operation if
the transmission is built. Texas Governor Rick Perry announced in
October that $10 billion in investment was promised, enough to
finance about 10,000 MW of wind plant development.
In addition, several companies have partnered together to form
ventures to build merchant transmission for the CREZs. Electric
Transmission Texas LLC (ETT), a proposed
joint venture between subsidiaries of American Electric Power
and MidAmerican Energy Holdings Company, filed on February 27 a
transmission proposal with the PUCT for the construction of
approximately 1,000 miles of transmission lines to support CREZ
development. At the same time, ETT proposed for consideration by the
PUCT and ERCOT an additional approximately 900-mile, high-voltage,
high-capacity backbone transmission system.
In response to the legislation, ERCOT initiated a study on
transmission alternatives for CREZs. Completed in December, the
analysis provides an assortment of options based on four geographic
areas: the coast, southwest Texas, central-western Texas and the
Panhandle. Among the report's findings:
* New bulk transmission lines would be required to support
additional wind generation out of the West Texas area.
* The coastal area has a lower capacity factor (a measurement of the
use of the installed wind capacity), but the wind output is more
consistent with ERCOT's load and the transmission cost is the
lowest.
* The Panhandle area has more wind generation resources with high
annual capacity factors, but transmission cost is higher and the
area is within Southwest Power Pool, not ERCOT.
ERCOT is performing an analysis of the impact of significant
additional wind generation on the level of the different ancillary
services that it needs to maintain system reliability. In addition,
ERCOT has indicated that further analysis of several issues will be
needed once a specific set of CREZs is designated by the PUCT and
wind developers have indicated specific locations for projects.
These additional analyses include reactive support needs, dynamic
stability analyses, optimization of the "on-ramps" within the CREZs
and analysis of the specific projects or operational procedures
needed to mitigate curtailments of existing wind generation.
A lot of work is underway in identifying and ironing out the
details, but it is apparent that several certainties are emerging:
transmission construction will begin after the CREZ designation is
completed and the upfront cost will be paid for by ratepayers. Once
the transmission is built, the PUCT is going to watch and see if the
mantra "if you build it, they will come" applies to wind power and
transmission in Texas.
Sandy Smith is communications coordinator for the Utility Wind
Integration Group, an association of utilities and other
stakeholders interested in the responsible integration of wind
generation into utility power systems. He can be reached at
sandy@uwig.org.
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