July 1, 2010 Brian Hirsch, Ph.D. Michael Milligan, Ph.D. Dave Corbus E. Ian Baring-Gould National Renewable Energy La

1. Alaska Wind Integration Review of Technical Meeting July 1, 2010 Brian Hirsch, Ph.D. Michael Milligan, Ph.D. Dave Corbus E. Ian Baring-Gould National Renewable Energy LaboratoryGolden, Colorado USA NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy operated by the Alliance for Sustainable Energy, LLC

2. Drivers for Renewable Energy Many National drivers for expanded renewable energy use – many appropriate for Alaska: Fuel Price Uncertainty Federal and State Policies Economic Development Public Support for Renewables Energy Security Carbon Risk National Renewable Energy Laboratory Innovation for Our Energy Future

3. Is Wind on the Railbelt Technically Possible? Yes… But… • There are significant challenges that have to be addressed • Many of the challenges are technical, but there are technical solutions with economic impacts to many of these • A great deal of the challenges are contractual (e.g., IPP, inter-utility and gas supply) which have process and financial implications – these need to be better understood National Renewable Energy Laboratory Innovation for Our Energy Future

4. Key System Wide Integration Challenges From ~30 technical representatives from almost all of the utilities on the Railbelt • Short-term regulation (cycles to minutes) • Transients • Transmission constraints • Short-term response/dispatching • Mid-term (minutes to hours) • Dispatch (hydro/thermal) • Gas constraints • Unit Commitment • Long-term (months to seasons) • Hydro-thermal • Understanding the costs and benefits to customers/members National Renewable Energy Laboratory Innovation for Our Energy Future

5. Impacts on Wind Deployment Short term - Projects that want to be implemented in the near term • Lots of issues expressed by technical utility staff • Need to address the utility risk (perceived and real) Longer term – Projects that are on the horizon (wind or other) • Need to conduct an integration study to address these issues National Renewable Energy Laboratory Innovation for Our Energy Future

6. Near-term - PPA Due Diligence • Short-term reserve required with the system operating under business as usual (seconds to minutes) – analysis to define requirements. • Validation of data • Analysis of wind and load data • Transient analysis • Projects ability to bring their own reserve • Long-term regulation requirements (minutes to years) – analysis to define requirements. • Transmission – transmission congestion • Gas nomination – availability, transportation(deliverability), and contractual • Hydro-thermal dispatching • Utilities determine what regulation risk, ramp limits etc. they can accept and then define how the project will provide the rest. • Identification of wind system specifications – ride through, inertia… • Basic cost & benefit analysis • Definition of collaboration and contractual agreements with associated parties – inter utility, gas companies • Agreement that share responsibilities knowing we don’t know it all National Renewable Energy Laboratory Innovation for Our Energy Future

7. Typical Long-term Recommended Approach Structure of a Railbelt Wind or RE Integration Assessment • Implement a Technical Review Committee (TRC) • Development of a timeline for studies • Identification of the timeframe for the study - Implementation of planned capacity improvements, large hydro, etc. • Define the process and scenarios to be considered as part of the wind integration study • Determine if analysis focuses of individual utilities vs. system wide operation – both technical & contractual • Conduct the wind integration study National Renewable Energy Laboratory Innovation for Our Energy Future

8. Steps of a Formal Integration Study (1 of 3) • Data collection, assessment and development • What data needs to be collected vs. what is available • Resource - Review of wind data (speed & direction) – what is adequate data for the different studies that need to be done. • Wind resource modeling • Detailed utility and transmission information • Book end analysis – determine issues triggering different regulation issues - at what point is expanded control or regulation required. • Transient analysis – voltage, power flow, short circuit etc. National Renewable Energy Laboratory Innovation for Our Energy Future

9. Steps of a Formal Integration Study (2 of 3) • Analysis of following items over the various time scales (Will involve nesting studies) • Transmission – transmission congestion • Gas nomination – availability, transportation (deliverability), and contractual • Hydro-thermal dispatching – unit flexibility • Inter-utility coordination • Wind forecasting and the potential impacts on dispatching • Alternative wind scenarios, eg Geographic diversity • Thermal flexibility, O&M cost of thermal cycling, thermal plant efficiency penalties • Impact of wind on emissions (unit requirements & heat rate) • Contractual issues/implications/limitations • Observing physical system constraints National Renewable Energy Laboratory Innovation for Our Energy Future

10. Steps of a Formal Integration Study (3 of 3) • Sensitivity studies – as appropriate and determined • Alternative approaches for supplying ancillary services • Risk management – understanding the impacts of changes in key parameters • Economic analysis • Costs & benefit associated with different solutions National Renewable Energy Laboratory Innovation for Our Energy Future

11. Post Integration Assessment Based on the analysis – assess the following • Addressing contractual requirements as identified in the study • Identifying what operating margins an IPP could/should provide • Identification of what would/should be done anyway regardless of wind development as the system is improved and expanded • Identification of pro’s and con’s of IPP vs. utility ownership • Impacts of wind projects implemented by organizations outside of utility control – how does this impact the close utilities and the system as a whole (how much regulation and fuel supply issues are likely based on different sized generators and technologies) • Large projects (IPP’s, large users, etc.) • Community scale projects (2MW?) National Renewable Energy Laboratory Innovation for Our Energy Future

12. NREL Observations & Recommended Next Steps • There is not a clear understanding of the risks of installing wind technologies in the near term • There is a lot of confusion and miss-understandings regarding wind development • Any discussion on near-term projects should include: • Facilitated discussion on the project between all parties • Conduct preliminary wind study – bracketing integration impacts and costs (better understanding the risks) • Making the case for IPP or external generation • Utilities in AK want to do it themselves (Golden Valley) • Open IPP Models, what are the economic benefits • Lower perceived cost vs. defined experience • Collaborative approach to development • Keep them small – multi-utility projects multiply the problems although in the long run they could lower the integration cost • Move forwards on a Wind Integration Study

13. Industry Steps Forward • Determining what to do with current projects • Initiate complete collaboration with open facilitated discussion - It can be done in the courts, but it wont be pretty and likely not ultimately successful • Determination of what information is required to make an assessment of regulation needs to make utilities “comfortable” with the project (risk acceptance and limitations) • Develop the public case for the project (cost / benefit looking at the long term impacts) • Move forwards on a Wind Integration Study • Process for implementing; TRC, Who, how to do it, what to do… • Identification of costs and funding ($2-4M project)

14. E. Ian Baring-Gould National Wind Technology Center & Deployment & Industrial Partnerships Centers 303-384-7021 Ian.baring-gould@nrel.gov Questions & Discussions NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy operated by the Alliance for Sustainable Energy, LLC