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Transmission and Wind Integration June 7, 2010 Michael Goggin American Wind Energy Association Outline ● Benefits of Wind Energy ● Transmission Overview ● Wind Integration Overview Currently Installed MW by State Over 500,000 Total Jobs Supported By Wind In DOE report Fact: in 2008, 35,000 new jobs added DOE 20% Report Scenario: 46 States Could Have Major Wind Development by 2030 DOE 20% Report Summary: Costs & Benefits Incremental direct cost to society $43 billion 50 cents/month/ household Reduction in emissions of greenhouse gasses and avoided carbon regulation costs 825 million tons of CO2 $50 to $145 billion Reduction in water consumption 8% through 2030 17% in 2030 Jobs supported and other economic benefits 500,000 total with 150,000 direct jobs $2 billion in local annual revenues Reduction in nationwide natural gas use and savings for all gas consumers 11% $86-214 billion Sources: DOE, 2008 and Hand et al., 2008 Note: All dollar values are in NPV Transmission The Lack of Transmission is a Major Problem ● How a Lack of Transmission Hurts Renewables: • Renewable projects cannot connect to the grid • Project output can be curtailed because of inadequate transmission • Cannot capture benefits of geographically diverse resources ● Transmission Needed Anyway to Reduce Congestion and Improve Reliability • Consumers losing $10s of billions per year due to transmission congestion and inefficiency • Reliability events cost consumers billions per year • Nearly every source of new generation will need new transmission Wind in Interconnection Queues by State Washington 8,702 Oregon 14,336 Montana 5,694 Idaho 730 Wyoming 9,582 Nevada 4,099 North Dakota 12,602 South Dakota 27,806 Nebraska 2,690 Utah 1,349 California 11,575 3,994 Colorado 15,904 New Mexico 18,007 Kansas 9,433 Minnesota 18,203 Wisconsin 628 Iowa 17,639 Maine 1,866 NH 496 Michigan 3,242 New York 6,990 Penn. Indiana 2,935 Ohio 8,225 3,810 Illinois WV 17,086 818 VA 83 Missouri 5,411 Oklahoma 10,187 Arkansas 60 Texas 50,669 VT 236 RI 949 MA 520 NJ 704 DE 450 MD 100 Under 1000 MW 1,000 MW-8,000 MW Over 8,000 MW Total 297,808 MW AWEA calculation as of March 16, 2010 Economies of Scale for High-Capacity Transmission Source: MISO Reduced Land Use 765-kV benefits are substantial over 500-kV and 345-kV. Description 765 500 345 345 Circuits/Tower 1 1 1 2 Conductors/Phase 6 3 2 2 SIL per Line (MW) 2400 910 400 800 Lines Required for 2400 MW Capacity 1 3 6 3 ROW per line (ft) 200 200 150 150 Total ROW (ft) 200 600 900 450 ROW utilization factor 100% 38% 22% 44% Typical Height (ft) 132 124 110 172 *Cost/Mile ($M) for 2400 MW capacity 2.6 6.9 6.6 4.5 Costinin2006 2007$US, $US, based average terrain. •*•* Cost based onon average terrain •** capacity measure, thermal capacity is •** SIL SILisisa arelative relative capacity measure, thermal capacity ~4000 MW for 765 2000 for 500 kVfor 500 kV. is over 4000 MWkV forand 765~kV andMW ~ 2000 MW • Source: AEP • Transmission voltage selection significantly affects performance, cost and the environment. The Market Failures ● Economic benefits of transmission do outweigh costs: • Joint Coordinated System Plan: Would pay for itself in 7 years by reducing power prices • Texas study: Would pay for itself in 3 years • Reliability benefits • Reduction in fuel price volatility impacts • Benefits of connected renewables: environmental, economic development, energy security ● Why don’t we just build the transmission? - Obsolete transmission policies, particularly cost allocation policies - In many regions, current cost allocation policy is analogous to charging the next truck entering a congested highway the full cost of adding a new lane Policy Reform Needed: The Three P’s ● Policy reforms needed to allow new transmission construction to proceed: • Planning (pro-active planning) • Paying (broad regional cost allocation) • Permitting (streamlined siting) ● AWEA-SEIA white paper at http://www.awea.org/GreenPowerSuperhighways. pdf Wind Integration 2009 U.S. Wind Penetration Source: AWEA data, EIA forms 906 and 920, 2008 data European Wind Energy Penetration, 2008 UK 1.82% Austria 3.28% Netherlands 3.40% Greece 3.67% EU-27 3.78% EU-25 3.89% EU-15 4.28% 7.00% Germany 8.42% Ireland Portugal 9.26% 11.76% Spain Denmark 0.00% 21.22% 5.00% Source: EWEA 2007 and Eurelectic 2006 10.00% 15.00% 20.00% 25.00% Power System Operations: Background ● Electricity supply and demand must match at all times ● Grid operators accomplish this by increasing and decreasing the output of flexible generators, like hydroelectric and natural gas power plants ● Electricity demand is highly variable; forecasts are used, but there is still variability and uncertainty ● Electricity supply is also variable and uncertain ● As a result, grid operators hold generation in reserve to accommodate aggregate variability: • Regulation reserves • Load-following reserves • Contingency reserves ● Reserves can be spinning or non-spinning The Flexibility Supply Curve Source: NREL The Distance Element of Wind’s Variability Correlation in plant output as a function of time and distance Source: NREL The Time Element of Wind’s Variability Wind Penetration 1 minute 5 minute 1 hour Study Texas 2008[1] 15,000 MW 6.5 MW 30 MW 328 MW California Energy Commission 2007[2] 2,100 MW, +330MW solar 0.1 MW 0.3 MW 15 MW 7,500 MW, +1,900 MW solar 1.6 MW 7 MW 48 MW 12,500 MW, +2,600 MW solar 3.3 MW 14.2 MW 129 MW -- 1.8 MW 52 MW New York 2005[3] 3,300 MW [1] http://www.uwig.org/Wind_Generation_Impact_on_Ancillary_Services_-_GE_Study.zip http://www.uwig.org/CEC-500-2007-081-APB.pdf [3] http://www.uwig.org/nyserdaphase2appendices.pdf [2] Wind Integration Costs Date Study Wind Capacity Penetratio n (%) Regulation Cost ($/MWh) Load Following Cost ($/MWh) Unit Commitmen t Cost ($/MWh) Gas Supply Cost ($/MWh) Total Operating Cost Impact ($/MWh) May ‘03 Xcel-UWIG 3.5 0 0.41 1.44 na 1.85 Sep ‘04 Xcel-MNDOC 15 0.23 na 4.37 na 4.60 June ‘06 CA RPS 4 0.45* trace na na 0.45 Feb ‘07 GE/Pier/CAIAP 20 0-0.69 trace na*** na 0-0.69*** June ‘03 We Energies 4 1.12 0.09 0.69 na 1.90 June ‘03 We Energies 29 1.02 0.15 1.75 na 2.92 2005 PacifiCorp 20 0 1.6 3.0 na 4.60 April ‘06 Xcel-PSCo 10 0.20 na 2.26 1.26 3.72 April ‘06 Xcel-PSCo 15 0.20 na 3.32 1.45 4.97 Dec ’08 Xcel-PSCo 20 3.95 1.18 5.136.30**** Dec ‘06 MN 20% 31** Jul ‘07 APS 14.8 4.41** 0.37 2.65 1.06 Source: NREL na 4.08 Lessons Learned from Wind Integration Studies ● Wind forecasting can significantly reduce integration costs by reducing uncertainty ● Geographically diverse wind resources tend to be less variable ● Wind resources spread over larger areas are less variable – one of the reasons why transmission is important ● Diverse wind has very little variability on the minute-to-minute time scale ● Wind is easier to integrate on more flexible power systems ● Market/system operation reforms can significantly reduce wind integration costs ● A robust transmission grid can significantly reduce integration costs ● Integrating wind is a cost issue, not a reliability issue (thinking about “limits” or renewable thresholds is inaccurate) ● Storage is not needed, but can help Solutions: Transmission is Critical ● NERC IVGTF: “Transmission expansion, including greater connectivity between balancing areas, and coordination on a broader regional basis, is a tool which can aggregate variable generators leading to the reduction of overall variability. Sufficient transmission capacity serves to blend and smooth the output of individual variable and conventional generation plants across a broader geographical region. Large balancing areas or participation in wider-area balancing management may be needed to enable high levels of variable resources.” (p. 43) Shorten Power Plant Dispatch Intervals • NERC: “More frequent and shorter scheduling intervals for energy transactions may assist in the large-scale integration of variable generation.” (p. 61) • In much of the U.S., power plants are scheduled to operate for hourly intervals, and expensive reserves are used to accommodate intra-hour variability • Using 5- or 10-minute scheduling intervals accommodates intra-hour variability without reserves • Studies show significant savings from moving to 5- or 10minute intervals instead of hourly: • Bonneville Power: 80% reduction in wind integration costs • Avista: 40-60% reduction in wind integration costs Flexibility through markets ● NERC: “Additional sources of system flexibility include the operation of structured markets, shorter scheduling intervals, demand-side management, reservoir hydro systems, gas storage and energy storage.” (p. 48) ● Ancillary services markets provide incentives for generators, demand response, and other flexible resources to offer their services to the grid ● Markets ensure that lowest-cost resources provide needed flexibility services Larger Balancing Areas • Allow excess power in one region to be shared with neighboring regions • Enable diverse wind resources spread over a larger area to be connected to the same grid, canceling out their variability • Create cost savings • Midwest ISO estimates savings from consolidating its 26 balancing areas into one are 3.7 to 6.7 times greater than the costs • Savings are large even on power systems without wind energy • Consolidation can be done physically or virtually Grid Balkanization Impairs Wind Integration Improve Use of Wind Forecasting • NERC: “Forecasting is one of the key tools needed to increase the operator’s awareness of wind plant output uncertainty and assist the operator in managing this uncertainty.” (p. 55) • Largest opportunities for improvement: • Better integrating forecasts into power system operations • Faster updating short-term models, more data Questions? Michael Goggin [email protected] 202-383-2531