Embed Size (px)
Citation preview
Pro-active Transmission Development:
Bringing Benefits Online — Sooner
Craig CoxInterwest Energy Alliance
18 September 2006
Wind Energy: Providing Benefits to Colorado’s Consumers
• 2001: PUC orders development of Lamar windfarm, citing its potential rate benefits
• 2003: Xcel says that this 162MW project would save $4.6 million annually
• 2006: Xcel reports that wind saved its consumers $9.75 in 2005
• 2006: Interwest study reports anticipated savings of $251 million over next 20 years.
Wind Energy: Providing Tangible Rural Economic Development Benefits
• In 2004, the 162MW Colorado Green project in Prowers County provided:– $884,000/year: new county revenues– $917,000/year: School General Fund– $235,000/year: School Bond Fund– $218,000/year: Prowers Medical Center– 26% Increase in County Tax Base– Tremendous Support from Community
Colorado Wind Energy1998 to 2005…up to 2007
0
200
400
600
800
1000
1200
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Colorado Wind Energy1998 to 2005…up to 2007
0
200
400
600
800
1000
1200
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Current Colorado projects
Colorado Green, 162 MW, 2003
Ponnequin, 32 MW, 1999-2001
Peetz, 30 MW, 2001
Lamar, ARPA and Springfield, 7.5 MW, 2004
Spring Canyon, 60 MW, 2005
Total = 292 MW
New projects, 2006-7
• 300 MW in Grover (Weld County)• 200-400 MW in Peetz• 75 MW in SE Colorado
Hindrances to Wind Energy
• It’s a “new” technology• Perceived higher costs until
recently• Unfamiliar to many utilities and
consumers until recently• TRANSMISSION
Xcel cites transmission hindrances
“PSCo was unable to obtain cost-effective third party transmission necessary to reliably deliver the full output of the facility to the PSCo transmission system. As a result, it was necessary to reduce the size of this proposed project [Invenergy] from 130 MW to 60 MW so that all of the energy could be delivered on existing PSCo facilities or under existing contractual arrangements.”
From “PSCo 2004 Renewable Energy RFP:Report on Winning Bids,” issued 24 March 2005
Further transmission hindrances cited by Xcel
“…limitations were also identified for projects that proposed to interconnect at the Lamar substation in southeast Colorado. These limits applied to five wind bids that proposed to interconnect over 1,000 MW of wind at the Lamar substation…At some point, additional power injections at Lamar will require transmission upgrades that would take at least 53 months to complete. Accordingly, the larger Lamar-based wind projects (i.e., larger than 75 MW) were set-aside from further consideration.”
This was based on a 2007 in-service date for the wind bids, and transmission could not be completed in time for those bids.
However, in NE Colorado, Xcel is adding 400 MW of wind at Pawnee and redispatching gas units as necessary to deliver the full output of the wind. This is an excellent example of siting wind and peaking gas so that they utilize the same transmission paths.
Quoted language from “Public Version” All-Source RFP Bid Evaluation Report, December 2005,
available at http://www.dora.state.co.us/puc/docket_activity/filings/05A-543E_PublicAll-SourceBidEvaluationReport.pdf
Curtailment Payments, 2004
In 2004, in Colorado PUC Docket No. 04A-214-216E, PSCo reported that its transmission system (particularly in the TOT 3 area) was insufficient to bring all cost-effective wind energy resources to market to offset high natural gas prices. Thus, the PUC approved curtailment payments to address this deficiency.
Curtailment payments have not been needed to this date.
Public Support for New Transmission, and Creative Thinking
• Transmission “compared to what”• Need to exploit non-wires solutions, use
existing lines more efficiently, upgrade existing routes, build intra state and two state routes to open options for multi state lines
• Consider the “NIMBY” case
Transmission and Wind Energy
A classic chicken and egg problem…
Typical Construction Time for Large Wind Project: 1-2 Years
Typical Time to Complete Transmission Facilities: 5+ Years
Cost of Delay
3,066,000,000 153,300,000 15,330,000 5,000
269,808,000
13,490,400 1,349,040 440
122,640,000
6,132,000 613,200 200
613,200
30,660 3,066 1
$ for 20 years$/yr @
$10.00/MWhMWh/yr @ 35% NCF
MW
How to Overcome Wind and Transmission Time Mismatch?
• Texas and Minnesota offer two excellent recent examples.
• Let’s look at what Texas did last year with SB 20…
Texas SB20: Facilitating Transmission
Provides Special Transmission Provisions for RPS• Transmission supporting RPS is recoverable in rates• PUC “shall require” transmission to meet RPS• Expedited CCN (6 months)
Fixes chicken-and-egg problem• PUC designates best development zones throughout Texas• Transmission planned to zones (built using special provisions)• “Consider” financial commitment of generators• Simplified CCN Process
Long-Term Transmission & Capacity Needs• For conventional resources and renewables
CREZ Proactive Transmission Approach
1. Identify the Best Resource Zones
2. Develop a Transmission Master Plan
3. Begin Building Transmission to Zones
Thanks to Mike Sloan of The Wind Coalition (www.windcoalition.org) for information on the
Texas CREZ experience
#1 - Identify the Best Wind Zones
Windy Counties
MEDIAN CAPACITY FACTOR (%)(Of the best 2,000 MW in zone;
* = less than 2,000 MW of total potential)
DRAFT
34 *
34 *38 *
37 *
37
39 *
42 44
44
37 35
38
35
3535
39
37
32 (???)
4442
404136
44
40
Based on AWS wind data from ERCOT
Initial Groupings of Wind Resources
By AWS Truewind
4000 MW AreasEach color represents approximately 4,000 MW of wind generation potential
ERCOT will reduce to 6 to 8 candidate zones & provide wind data
#2 - Develop Transmission Master
Plan
Preliminary Areas for ERCOT Transmission
Analysis4
2
7
1410 12
6
5
24
9
10 = Area Proposed by ERCOT to Study Transmission Upgrades
CREZSelection(ILLUSTRATIVE)
Hypothetical
CREZ Package to achieve a total of
10,000 MW1,500
1,5002,500
1,500
1,500
1,500
• 3,000
• 2,000• 2,000
• 2,000• 3,000
• 3,000
• 3,000
• 2,000
Hypothetical
CREZ Package to achieve a total of
20,000 MW
CREZ PLAN(ILLUSTRATIVE)
#3 - Build Transmission to
Zones
ERCOT’s OLD Approach - Did NOT Work
PUC Strawman (Original) Proposal for CREZ
DNOSAJJMAMFJ
LT System Study
Wind Consultant RFP
CREZ Criteria Development CREZ Determination
Stakeholder Input on CREZs
CREZ Analysis
ERCOT
PUCT
Generation Scenarios
Wind Integration RFP
Potential C
RE
Z ID
ERCOT CREZ Timeline - 2006
What would a CREZ-Style Quantification of Colorado’s Wind
Resource Look Like?
2,800
3,100
4,200
4,200
2,700
1,000
900200
600400
Numbers for illustrative, conceptual, purposes only
Wyoming and New Mexico have additional rich wind resources.
