Transmission Issues& Renewables

Perspectives of a Wind Developer

Experienced Development Team• TradeWind Energy founded

in 2001 • Based in Lenexa, Kansas• Senior managers have 60+

years Utility and IPP experience

• Over 2,300 MWs of active wind development in central USA

• Owned by local investors and Enel S.p.A.– Enel is a $65 billion market

capitalization– Owns over 19,000 MWs of

renewable energy worldwide

Our Wind Powered, LEED Certified Offices in Lenexa,

KS

The Importance of Transmission• National Perspective

– To meet US renewable energy goals, investment in high voltage transmission “highways” will be necessary to deliver wind energy from the west plains region to the east and west population centers.

• Local Perspective– Kansas wind projects serving

Kansas customers need robust transmission to ensure reliable, low cost delivery of power.

Projected Growth of Wind Power

DOE/AWEA/NREL Wind Vision looks at a 20% National RPS by 2030

Would require 320 GW installed capacity

2007 installed capacity is about 14 GW

National: Wind Needs Transmission

Most of the best wind in the US is not where most electricity is consumed

National RPS goals of even 10% will only be met if this region can export wind power

Transmission “Highway” System

New high voltage transmission lines will be necessary to enable bulk wind power export to population centers, east or west.

In some cases, new conventional power plants can be catalysts to get new lines built and paid for.

Local: KS Needs Transmission

Weak part of the Kansas

transmission system

Most Wind

Most Electricity Demand

Reliability and N-1

N-1 criteria: if any one line goes out, you can still deliver power and the grid remains stable.

Also, robust wholesale power markets require a reliable, robust transmission network.

More transmission will result in a more liquid and efficient power market, and lower power prices

Smoky Hills Wind Project

Challenges for Wind Developers• There are two separate processes to get wind projects up and

running, Interconnection & Transmission, each with risks and uncertainties– Interconnection = Getting Connected to the Grid– Transmission Service = Delivering Power to Customers– Both processes are managed by the Southwest Power Pool (SPP), a

Regional Transmission Organization (manages the grid in KS, OK, and parts of MO, AR, & TX)

• A Black Box for developers– Uncertainty of costs to connect– Uncertainty of costs to deliver power– Uncertainty of available transmission capacity

Getting Connected

• Interconnection– Three studies before you can enter into the interconnection

agreement• Feasibility - $10,000• System Impact - $50,000• Facilities - $100,000• Interconnection Agreement

– Study process can take over two years– Provides only the costs to connect your wind project to the

transmission system– Does not provide any indication of available transmission capacity or

required costs to deliver power to customers

Delivering Power

• Transmission Service– Aggregate study process lumps all qualified applicants into one study

every 4 months.– Answers the question: “What are the upgrades to the grid (& their cost)

necessary to enable the reliable delivery of power from the project to the utility, and how much of that cost is allocated to that project?”

– Requests can only be made by the utility purchasing the power, not the wind developer.

– After initial cost estimates, some applicants drop out, forcing a re-study for the remaining applicants.

– This happens repeatedly until no project drops out, changing the allocated costs for remaining applicants each time.

– It is impossible for wind developers or the utilities buying wind power to have a reliable estimate of the transmission costs at the time they have to sign contracts for the energy.

A Windy Vision for Kansas

• Tens of thousands of MWs will be built in the west plains over the next 20 years

• Investment in new transmission will be the deciding factor whether Kansas plays a small role or a major role in the growth of the US wind industry

• Kansas could become a national hub of wind power, exporting to the east and west population centers, and benefiting significantly from the accompanying economic and employment growth

• It will take leadership from government, industry, and local communities

• Let’s not set our sites too low!