Western Wind Transmission

Ronald L. Lehr

AWEA Western Representative

4950 Sanford Circle West

Englewood, CO 80110

303 504 0940

Wind Situation

• New generation 90% + natural gas

• Gas prices high, volatile

• Coal environmental risks, timing

• Public, policy support for wind

• Wind costs continue to decline

• Wind PPAs offer firm prices

$0.00

$0.10

$0.20

$0.30

$0.40

1980 1984 1988 1991 1995 2000 2005

38 cents/kWh

Reduced Cost Driving Wind’s Success

2.5-3.5 cents/kWh

Levelized cost at excellent wind sites in nominal dollars, not including tax credit

Transmission for Wind

• Build case for needed transmission investments• Transmission Planning: study and report• Consider all transmission alternatives• 1. Use existing transmission

• SSG-WI constraint data shows physical capacity available

• 2. Upgrade existing transmission routes• 3. Plan new transmission routes

Wind Development Issues: Grid Operating Rules

What wind wants: appropriate access to grid operationsLiquid, transparent spot imbalance settlement markets Near real time, flexible scheduling protocols.Robust secondary markets in transmission rights (“flexible firm”).Postage stamp pricing paid by load (or volume pricing).Statistical determination of load shape conformance

What wind gets: rules deny merchant wind access to interstate commerceSystem designed exclusively for firm, fixed blocks and

commodity strips.Rigid scheduling protocols, onerous imbalance charges.License plate pricing paid by new generation.Grid balkanization and rate pancaking.

Mature path to market is a long way away. Some policy acceleration will be required.

Wind Development Issues: Transmission Expansion

What wind wants: transmission that includes windPro-active regional planning with political buy-in.Programmatic expansion focused on shared goals.Public infrastructure financing repaid through user fees.

What wind gets: too little, too lateReactive, piecemeal gridlock decoupled from political process.Project specific expansion focused on immediate needs of

existing players.Uncertain capacity rights as sole rate recovery mechanism.

Mature politically anchored regional planning process is a long ways away. Some policy acceleration will be required.

Wind Regulatory Agenda

• Accelerate RTO formation.– Larger control areas and markets.– No pan caking transmission fees.– Governance process to hear and resolve complaints.– Coordinated transmission planning and expansion.

• Action from FERC to adopt best practices.– Legislative direction.– Key off best tariff filings, RTO policies.

• Broaden trader and marketer participation

Interior West Clean Energy Plan

John Nielsen

Western Resource Advocates

Ronald L. Lehr

AWEA

Study Objectives• Aggressive but feasible long-term clean electric

energy plan for the Interior West • Identify the public policies and business strategies

needed to implement the plan • Engage energy decision makers across the region

on adopting these policies and strategies• Relative to BAU, Clean Plan will include:

– Significantly increased reliance on RE & EE– Retires older, less efficient fossil resources now on the

system

Who’s Involved• Funding--Hewlett Foundation, DOE on transmission issues

• Project Team: WRA, Synapse Energy Economics, Tellus Institute, Ron Lehr (NWCC, AWEA), grnNRG

• Advisory Committee

– utility industry, independent power producers, renewable developers, PUC regulators, state energy office officials, environmental and clean energy advocates, DOE, NREL

Relationship of IWCEP to Other Regional Transmission Planning Activities

WRAP AP2•Robust RE/EE Scenario•Limited Transmission Modeling

WGA Conceptual Plan•Load Flow Transmission Modeling•Limited RE/EE Scenario

IWCEP•Robust RE/EE Scenario•More Detailed Transmission Modeling

SSG-WI•Load Flow Transmission Modeling•Robust RE Scenario•Load Growth Sensitivities to Serve as EE proxy

Geographic Detail

• Modeling trans areas• Inputs developed at trans

area level • Results presented at the

state and regional level • Results available at trans

area level

Renewable Resource Assessment• Compiles best wind, solar,

geothermal, biomass resource data

• GIS identifies:

• Best resource areas• Inappropriate

development areas• Location of facilitating

infrastructure like existing transmission lines and substations

www.energyatlas.org

Renewable Capacity by Type & Location

Clean Plan: 2020

CapacityMW

1,000

BiomassSolarGeothermalWind

State WindGeo-

thermal SolarBio-

massState Total

Arizona 660 430 1,800 40 2,930Colorado 1,990 0 210 350 2,550Montana 1,040 0 30 400 1,470New Mexico 1,550 200 490 100 2,340Nevada 1,080 1,110 800 10 3,000Utah 960 450 120 70 1,600Wyoming 1,590 0 10 50 1,650Resource Total 8,870 2,190 3,460 1,020 15,540

Capacity (MW)

1% 1%

13%

70%

9%

6%

309 TWh

1%

20%

48%

17%

8%

6%

Generation MixSeven Interior Western States

Coal

Nat. Gas

Nuclear

Hydro

Renewables

Other

2001

2% <1%

62%

24%

7%5%

Clean Plan 2020

BAU 2020

423 TWh 330 TWh

Transmission Additions by 2020 Business-as-Usual vs. Clean Plan

Clean Plan = 2,800 MWBAU = 10,000 MW

Conclusions

• Build the case for needed investment• Study and report• Consider transmission alternatives• 1. Use existing transmission

• SSG-WI constraint data shows physical capacity available

• 2. Upgrade existing transmission routes• 3. Plan new transmission routes• Present business, policy case to decision makers

Contact Information

John NielsenEnergy Project DirectorWestern Resource Advocates303-444-1188 x232jnielsen@westernresources.org