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1Law of Renewable Energy WEBINAR SERIES
Transmission for Renewable Energy:Efficient Solutions to Integration Issues
Law of Renewable Energy
WEBINAR SERIES
PRODUCED BY EUCI ● June 23 , 2011
To order any of these books please contact
Angel Giovannone at (503) 294-9422 or [email protected]
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Jason A. Johns
Associate
Portland, OR
(503) 294-9618
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Marcus Wood
Partner
Portland, OR
(503) 294-9434
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Jennifer H. Martin
Partner
Portland, OR
(503) 294-9852
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Timothy L. McMahan
Partner
Portland, OR
(503) 294-9517
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Agenda
• Interconnection
• Reliability
• Transmission Service
• Market Changes
• Permitting
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Interconnection
• Which interconnection procedures apply?– First, you need to determine if your interconnection is subject to
state or federal jurisdiction
– If Federal, the procedures that apply may depend on thefacility’s size
• Small Generator = ≤ 20 MW
• Large Generator = > 20 MW
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Interconnection Services
• What types of interconnection service are available?– Energy Resource service = Allows generator to connect to the
transmission system and be eligible to deliver electric outputusing existing firm or non-firm transmission on an “as available”basis
– Network service = Allows generator to connect to thetransmission system:
• In a manner comparable to that which the TP integrates its owngenerating facilities to serve native load customers; or
• In an RTO or ISO with market-based congestion management, inthe same manner as all other Network Resources
• Which service should I choose?
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Negotiating theInterconnection Agreement
• Under FERC’s LGIA, the terms are standard and changes must beapproved by FERC
• Negotiations focus on:
– Milestones (schedule and payments)
– Cost allocation (contingent facilities)
– Operational Characteristics
• Facilitating use of one interconnection capacity by more than oneproject or owner
– Phasing
– Joint Ownership Agreements
– Partial Termination
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Queue Congestion
• Small financial commitment to enter queue ($10k)
• Three serial studies
– Feasibility Study
– System Impact Study
– Facilities Study
• Little disincentive to withdraw; restudies were common
• So was suspension
• Little tied an interconnection customer to its LGIA,resulting in some walking away
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Interconnection Queue Reform
• December 2007 Technical Conference– Serial study practices being slowed by new entry into queues &
speed at which projects could develop
– Interconnection delays causing trouble in meeting RPS obligations
• March 2008– Order issued as a result of technical conference
– RTOs/ISOs ordered to report status of respective queues
– Identified three needed changes:
• Increased requirements for entering the queue
• Eliminate the Feasibility Study
• First-ready, first-served vs. first-come, first-served
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Queue Backlogs
• California ISO
– 361 pending interconnection requests (105,000 MW)
– 68,000 MW of renewable energy
– CAISO’s historic peak demand: 50,270 MW
• Southwest Power Pool
– 255 pending interconnection requests (57,000 MW)
– 50,000 MW related to wind generation (176/196 requests over twoyears)
• Midwest ISO
– 348 pending interconnection requests (80,000 MW)
– 65,000 MW related to wind generation
– Could not clear queue until 2050
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The Results
• California ISO– Clustering with queue windows (two per year)
– 2 studies (Phase I and Phase II)
– Increased, non-refundable financial requirements
• Southwest Power Pool– 3 queues, your choice (IFS, PISIS, DISIS)
– Suspension only allowed for 18 months after Effective Date
– Shared Network Upgrades will be built upon execution
• Midwest ISO– Milestones provide “first-ready, first-to-proceed”
– No suspension for economic reasons (force majeure only)
– Once a GIA is signed, Network Upgrades will be built
– ABSOLUTELY NO AMENDMENT TO ISD
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Risk Analysis
What are the risks in filing unexecuted?
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Interconnection Capacity Rights
Aero Energy, 116 FERC ¶ 61,149
• Developer sought interconnection and transmissionservice on jointly-owned transmission line
• Transmission line joint owners intended to developgeneration that would use respective capacity rights
• Sagebrush claimed all but 3 MW of transmissioncapacity was reserved
• FERC stated Sagebrush partners have capacity rights, if:– Demonstrate pre-existing contractual obligations; or
– Specific expansion plans, including definitive dates, and milestones met
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Milford Wind Corridor
129 FERC ¶ 61,149
• Milford’s Request:– 88-mile, 345 kV interconnection line with 1,000 MW capacity
– Built to serve multi-phase wind development
– Closed financing for entire line; PPA for 200 MW
– Accelerated 100 MW of Phase II
– All phases to be operational by 2015
• FERC approved request based on specific expansionplans, and material progress toward meeting milestones
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Terra-Gen Dixie Valley
132 FERC ¶ 61,215
• Owner of the Dixie Valley Line
• 60 MW existing geothermal facility
• Sought priority rights to 360 MW
• FERC Ruling– Awarded priority to 60 MW capacity
– Remaining 300 MW subject to open access
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Boundary Tested
Puget Sound Energy, 133 FERC ¶ 61,160
• Developing multi-phased 1,250 MW wind project
• 1,250 MW interconnection built with 350 MW Phase I
• Environmental studies; EIS; conditional use permit
• Interconnection agreement signed for 1,250 MW
• Phases IV and V targeted for 2029
• FERC Ruling– Puget may reserve to serve native load
– Line must be placed under OATT
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Reliability Standards
• Are reliability standards mandatory?– YES10
– Generators are obligated to register
• Who is subject to registration?• Single 20 MVA unit
• Multiple units at 75 MVA
• Regardless, are you material to reliability?
• Who oversees compliance? NERC, RROs
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WECC vs. Gen Ties
Cedar Creek Wind
• 76-miles, 230 kV tie
• Ownership change 4 milesfrom POI
• TO operatedrelaying/protection systemsat POI
• 10 x 34.5 kV, 3 x 230 kVbreakers at generator
• Registered as TO/TOP
Milford Wind Corridor
• 88-mile, 345 kV tie
• Full ownership
• Interconnecting at sub with2 GW connected
• 2 x 168 MVA GSUs on siteat generator
• Registered as TO/TOP
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FERC Decision
Cedar Creek Wind
• Material to reliability
• CC owns/controlsequipment on one end ofthe tie line
• Must be coordinated withequipment at remote end
• Fault could lead to loss of600 MW CCGT
Milford Wind Corridor
• Material to reliability
• Owns/operates equipmentat generator
• Must be coordinated withequipment at remote end
• Fault could lead to loss of1800 MW
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Nobody wants responsibility for a blackout
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Transmission Service
• My facility is already interconnected, why do I needtransmission service?
– Interconnection service provides no delivery rights
– Unless your purchaser is taking power at the busbar, you willneed to purchase transmission service
• Where do I reserve and buy transmission service? OASIS
• What types of service are available?
– Point-to-point vs. Network
– Short-term vs. Long-term
– Firm vs. Non-firm
– Conditional firm
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Transmission Service
• Are transmission providers required to treat everyone bythe same rules?– Yes, FERC Order 888 requires that transmission service be
provided on an open, non-discriminatory basis
– Transmission providers particularly may not favor affiliates
• What are the types of transmission providers?– RTOs/ITCs are independent because they do not actually own or
control electric generation resources
– Many transmission owners, however, remain as integratedtransmission and generation utilities
– Some types of transmission providers (e.g., BPA, TVA, WAPA) aresubject to limited FERC authority
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Obtaining Transmission Service
• Are there costs associated with requesting transmission?– If the system does not have available capacity, a developer may
have to pay to upgrade the transmission system toaccommodate the requested service
• How much will transmission cost?– Integrated transmission/generation utilities may charge the
higher of:
• Incremental costs; or
• An embedded cost rate
Associated with the requested transmission service
– RTO transmission service may be priced on a different basis
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Imbalances
• When do imbalances occur?– When the hourly generation as scheduled is different than the
actual hourly generation delivered from a facility
– Someone has to make up the difference
• How are imbalance penalties assessed?– The charges are tiered, i.e., the larger the deviation from your
schedule, the larger the charge
– Variable generators are exempt from the most expensive tier
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Imbalances (cont.)
• How can I avoid imbalances?– Good forecasting
– Shaping & Firming arrangements whereby the supplier will takeor provide energy, as applicable, in hours when the actualgeneration differs from the scheduled amount
– Participating in applicable RTO intermittent generation protocols
– Delivering to the purchasing utility at the generation projectbusbar
– Delivering using network transmission service
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Ancillary Services
• Purpose = products designed to maintain reliability onthe grid
• Types of Ancillary Services
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Intra-Hour Wind Integration
• What is intra-hour wind integration service?– Some transmission providers claim that intra-hour variations in
output of intermittent resources impose added costs on thetransmission system operator
– Integration service follows variable resources with dispatchablefacilities in order to make up moment-to-moment differences ingeneration output within the scheduling hour
• Example: BPA
• Best Approach: pass the costs to your purchaser
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FERC VER NOPR
• Issued November 18, 2010
• Comments were due March 2, 2011
• Issued to address barriers to the integration of variableenergy resources
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FERC VER NOPR (cont.)
• FERC proposed to revise the current pro forma OATTand LGIA in three ways to address VER integration:– Intra-hour scheduling, at intervals of 15 minutes (TPs can permit
shorter scheduling intervals)
– Power production forecasting
• TP – those TPs who propose volumetric differences in the Schedule10 rate would be required to provide VER power productionforecasting
• ICs – requirement to provide meteorological and operating data tointerconnecting TPs; requirement to report forced outages reducinggenerating capacity by 1 MW or more for 15 minutes or more (SGIAexempted)
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FERC VER NOPR (cont.)
– New Generator Regulation Service, Schedule 10, to give TPs amechanism to recover the costs of capacity used to providedgenerator regulation reserves , both for the transmissioncustomer serving load within the transmission provider’s BAAand for exports
• Applicable to all generators, but a TP may apply to FERC to chargea volumetric difference for VERs if the TP can justify that the VERsimpose a different per unit impact on the system
• BUT, no volumetric difference permitted without intra-hourscheduling and power production forecasting
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• Pre-2009– No separate service or rate
• FY 2009– Within Hour Wind Balancing Service Rate
• $.68/kw.-mo.
• FY 2010-2011– Within-Hour Wind Balancing Service Rate
• $1.29/kw.-mo.
• Initially proposed at $2.72/kw.-mo
The Rapid Revolution of BPA’sWind Balancing Service
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• Three components– Regulation
– Following
– Imbalance
• Based on a pre-established amount of balancingreserves
• DSO 216
• Persistent Deviation Penalty
A Closer Look at BPA’sCurrent Wind Balancing Service
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DSO 216
• How does this fit in?– BPA monitoring inc or dec reserves deployed from the FCRPS
– Requires different responses:
• 85% deployed (warning)
• 90% deployed
– Overgeneration: wind plants must limit wind generation to theirschedule plus proportional allocation of dec reserves
– Undergeneration: wind plant schedules curtailed to actualoutput plus proportional allocation of inc reserves
• 100% deployed
– Overgeneration: wind plants limited to schedule
– Undergeneration: schedules cut to actual output
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Source: www.bpa.gov, as of May 3, 2011
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Source: www.bpa.gov, as of June 20, 2011
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Source: www.bpa.gov, as of June 20, 2011
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Environmental Redispatch
• Background – the “June Event”
• BPA issues proposal to address high water / high windevents; seeks comments
• Final Interim Record of Decision issued May 13, 2011
• Challenge pending at FERC
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CAISO Market Changes
• Renewable Integration Market & Product Review –Phase 1; proposal:– Lower energy bid floor from -$30/MWh to -$300/MWh
– Elimination of PIRP after end of 2014; limited grandfathering
• Renewable Integration Market & Product Review –Phase 2; early stages
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Queue Reform, Rd. 2
• Cal ISO GIP– Clearer financial security posting requirements
– Scalability issues addressed
• Midwest ISO– Tougher to proceed to DPP
– Net Zero Interconnection Service
– Dispatchable Intermittent Resource
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Generation Transmission Linesand Permitting
• What if it’s part of generation facility?
• What if it’s an independent energy facility?
• The “but for” test: “related and supporting” or “stand alone”?
• When does a line upgrade become a new facility? Ramifications?
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Ramifications in Permitting
• Interrelated and interdependent facilities-NEPA and otherunpleasantness
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Locating Transmission Lines
• The pressure to co-locate transmission lines within existing corridors(new lines on existing poles; new poles)
• Logic from the perspective of permitting agencies-land disturbanceand environmental considerations
• Issues of facility control, outages and O& M
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What’s In It for the Land Owner?
Lost opportunities, costs and agricultural impacts
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Partnering with Utilities
• Land control – advantages of partnering with utility
• Off-site substation construction costs, engineering anddesign, and practical capabilities of “going it alone”
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QUESTIONS?
Law of Renewable Energy
WEBINAR SERIES
PRODUCED BY EUCI ● June 23 , 2011
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