Wind power throws a curve at the BPA
Jul 22 - McClatchy-Tribune Regional News - Ted Sickinger The Oregonian,
Portland, Ore.
Utility wonks have been quipping for years that the future of energy in the
Northwest is windy and gassy.
When it comes to wind power, the future has already arrived, a reality that
has come rushing home in the past two years and created major friction among
the Bonneville Power Administration, wind power producers and the agency's
utility customers.
The BPA, which markets the energy produced at 31 hydroelectric dams and a
nuclear plant in the Columbia River Basin, has seen the amount of wind power
flowing onto its grid nearly double in each of the past four years.
That surge not only taxes the existing transmission system, most of which is
operated by the BPA, but relying on such an intermittent resource has also
posed reliability issues for the hydro system.
Incorporating wind power also raises regional equity and environmental
issues as the agency tries to balance mandates from states for more
renewable energy against its obligations to its utility customers and a
responsibility to protect migrating salmon.
The BPA's release Tuesday of a 541-page order for setting future rates to
public and private utilities brought new attention to the challenge it faces
in absorbing an explosion of new wind power. Front and center in that order
was a controversial decision dealing with how much it will charge wind
producers to absorb and smooth out the intermittent stream of power they
send onto the grid.
"Wind was the hardest issue in this rate case because it was completely
new," said Steve Wright, the BPA's chief executive. "There was more thought
on that issue than anything else."
The rate increase imposed on wind producers came in at about 90 percent. And
while that sounds large, it is a fraction of the 300 percent increase that
the agency announced earlier this year -- a figure that created a firestorm
of criticism.
"This is a cool breeze on what could have been a very hot day," said Rachel
Shimshak, director of the Renewable Northwest Project.
The BPA says the lower rate increase resulted from efforts by the wind power
industry to improve its forecasting and operational practices, allowing the
federal hydro system to operate with lower emergency reserves.
But the agency's tack also reflects the change in political winds that blew
in with the Obama administration. The administration, through the Department
of Energy, is making renewables a centerpiece of its energy and climate
change policies. A minor issue five years ago, integrating more wind power
is now the Gordian knot that the BPA has been tasked with unraveling.
"This is the biggest issue for BPA with the Obama administration," said Bob
Jenks, executive director of the Citizens' Utility Board. And for BPA chief
executive Wright, he said, the rate case focus on wind "is the signal to his
bosses in Washington that he gets it."
Renewables advocates and members of Oregon's congressional delegation hope
that the rate decision and an accompanying wind integration plan reflects a
wholesale change in the way the BPA approaches the industry. They concede
that wind poses major challenges. But they insist that few of the problems
are new, and say the BPA has been dragging its feet and blaming the wind
producers while focusing on providing the lowest possible power prices to
publicly owned utilities, its traditional constituents.
Oregon Sen. Ron Wyden said late last week that no matter where the rate
increase came in, he was dissatisfied with the agency's approach and looking
for change.
"At a time when everyone from the president of the U.S. to the folks in the
tiniest timber dependent communities are looking at promoting green energy,
our region cannot tolerate having the lead player adopting policies that are
decidedly unfriendly," said Wyden, a Democrat.
Power surge
The BPA is the 800-pound gorilla of the Northwest's electricity world. The
hydropower it sells makes up 40 percent of the energy consumed in the
Northwest, and it owns three quarters of the transmission wires that send
electricity pulsing between power plants and customers as far away as
California.
When it comes to wind, the BPA has a more central role. The region's wind
turbine farms are geographically concentrated at the east end of the
Columbia River Gorge, right in the heart of the BPA's control area.
While the BPA has a concentration of transmission lines in that corridor to
serve dams, the lines are already overtaxed. And when the wind blows, all of
the wind farms start sending power to the grid at the same time.
The federal hydro system is a great tool to integrate with wind because
reservoirs are the only large-scale way to store energy and can quickly ramp
up and down to balance intermittent supply and demand.
Yet the system has its limits, and when wind speeds jump or fall well beyond
the levels forecast by wind farm operators, it can require the agency to
operate with inadequate reserves or spill water in a way that is harmful to
fish.
Elliott Mainzer, the BPA's head of strategic planning, says the agency has
been working on the issue for years. Two years ago, working with wind
producers and utilities, it came up with a 16-point plan to integrate 6,000
megawatts of wind generation by 2020. By next year, the region will be
halfway to that total already.
The BPA initially focused on its transmission system and is moving forward
on four priority projects, in some measure to accommodate wind.
In October 2008, it put its first wind integration rate in place, charging
wind producers for the cost of absorbing and backing up their output. More
recently, it proposed quadrupling that cost, before dropping down to the 90
percent increase in Tuesday's rate order.
While the BPA has taken flak for focusing on increasing rates rather than
improved operations, it has more recently shifted its focus, putting a
definite timetable on a series of initiatives that could fundamentally
change the way it operates the grid.
By October, the agency intends to establish a system to knock wind farms off
its transmission grid when they are operating so far outside their scheduled
output that it threatens to exhaust the agency's hydro reserves.
It intends to install 16 stations to measure wind speed and direction around
the region to provide data to wind operators at five-minute intervals. And
by mid-2010, it will establish an in-house forecasting desk alongside its
existing hydro forecasting desk.
By Dec. 1, the BPA will begin offering a pilot program to allow customers to
change their power transmission schedules and sell power resulting from
quick changes in wind output.
The agency also proposes to allow wind producers to purchase reserves from
suppliers other than the BPA and will eventually seek to transfer some of
its wind integration responsibilities to other utilities.
"It's a significant rate increase," said Don Furman, a senior vice-president
at Iberdrola Renewables, which owns nearly 40 percent of the wind generation
in Oregon and Washington. "On the other hand we feel good about this because
BPA is really engaged in the implementation plan."
Ted Sickinger; tedsickinger@news.oregonian.com
For more updates and previous stories about wind power, visit oregonlive.com/business
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