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Pro-active Transmission Development: Bringing Benefits Online — Sooner

Pro-active Transmission Development: Bringing Benefits Online — Sooner. Craig Cox Interwest 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

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Pro-active Transmission Development: Bringing Benefits Online — Sooner

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  1. Pro-active Transmission Development:Bringing Benefits Online — Sooner Craig Cox Interwest Energy Alliance 18 September 2006

  2. 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.

  3. 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

  4. Colorado Wind Energy1998 to 2005…up to 2007

  5. Colorado Wind Energy1998 to 2005…up to 2007

  6. Current Colorado projects Peetz, 30 MW, 2001 Spring Canyon, 60 MW, 2005 Ponnequin, 32 MW, 1999-2001 Colorado Green, 162 MW, 2003 Lamar, ARPA and Springfield, 7.5 MW, 2004 Total = 292 MW

  7. New projects, 2006-7 • 300 MW in Grover (Weld County) • 200-400 MW in Peetz • 75 MW in SE Colorado

  8. Hindrances to Wind Energy • It’s a “new” technology • Perceived higher costs until recently • Unfamiliar to many utilities and consumers until recently • TRANSMISSION

  9. 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

  10. 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 athttp://www.dora.state.co.us/puc/docket_activity/filings/05A-543E_PublicAll-SourceBidEvaluationReport.pdf

  11. 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.

  12. 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

  13. Transmission and Wind Energy A classic chicken and egg problem…

  14. Typical Construction Time for Large Wind Project: 1-2 Years

  15. Typical Time to Complete Transmission Facilities: 5+ Years

  16. Cost of Delay

  17. 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…

  18. 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

  19. CREZ Proactive Transmission Approach • Identify the Best Resource Zones • Develop a Transmission Master Plan • Begin Building Transmission to Zones Thanks to Mike Sloan of The Wind Coalition (www.windcoalition.org) for information on the Texas CREZ experience

  20. #1 - Identify the Best Wind Zones

  21. Windy Counties

  22. MEDIAN CAPACITY FACTOR (%) (Of the best 2,000 MW in zone; * = less than 2,000 MW of total potential) 39 * 44 42 44 DRAFT 44 37 35 37 40 34 * 38 41 36 34 * 40 38 * 35 37 * 42 39 44 35 35 37 Based on AWS wind data from ERCOT 32 (???)

  23. Initial Groupings of Wind Resources By AWS Truewind

  24. ERCOT will reduce to 6 to 8 candidate zones & provide wind data 4000 MW Areas Each color represents approximately 4,000 MW of wind generation potential

  25. #2 -Develop Transmission Master Plan

  26. Preliminary Areas for ERCOT Transmission Analysis 4 2 14 10 12 9 7 5 6 10 = Area Proposed by ERCOT to Study Transmission Upgrades 24

  27. 1,500 1,500 CREZ Selection (ILLUSTRATIVE) 1,500 2,500 1,500 Hypothetical CREZ Package to achieve a total of 10,000 MW 1,500

  28. 2,000 CREZ PLAN (ILLUSTRATIVE) • 3,000 • 2,000 • 2,000 • 2,000 • 3,000 • 3,000 Hypothetical CREZ Package to achieve a total of 20,000 MW • 3,000

  29. #3 - Build Transmission to Zones

  30. ERCOT’s OLD Approach - Did NOT Work

  31. PUC Strawman (Original) Proposal for CREZ

  32. ERCOT CREZ Timeline - 2006 Stakeholder Input on CREZs ERCOT PUCT Wind Consultant RFP Wind Integration RFP LT System Study Potential CREZ ID CREZ Analysis Generation Scenarios CREZ Criteria Development CREZ Determination J F M A M J J A S O N D

  33. What would a CREZ-Style Quantification of Colorado’s Wind Resource Look Like? 3,100 2,700 4,200 400 600 2,800 Numbers for illustrative, conceptual, purposes only 900 200 4,200 1,000 Wyoming and New Mexico have additional rich wind resources.

  34. Thank you! Craig Cox Interwest Energy Alliance cox@interwest.org 303-679-9331

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