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Economic Portfolio Update –

Economic Portfolio Update –. CAWG Meeting – AEP Offices, Dallas August 27, 2008. Portfolios - Review. Portfolio 3 is associated with wind levels beyond the 2,600 MW in 2008 Previous Analysis (April, 2008) show strong benefits for generic wind growth modeled at 7 GW in the SPP footprint.

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Economic Portfolio Update –

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  1. Economic Portfolio Update – CAWG Meeting – AEP Offices, Dallas August 27, 2008

  2. Portfolios - Review • Portfolio 3 is associated with wind levels beyond the 2,600 MW in 2008 • Previous Analysis • (April, 2008) show strong benefits for generic wind growth modeled at 7 GW in the SPP footprint. • (July, 2008) without wind above current levels, Portfolio 3 is not cost-beneficial • Modifications to Portfolio 3 are required for: • Specific, not generic wind locations • Sizing and location of wind collector systems matched with assumptions on levels of wind generation. • Portfolio 3-A is associated to current wind levels • Previous Analysis (Sep, 2008) demonstrates benefits exceeding costs under current wind levels in SPP • Portfolio 3-A is used to separate out the impact of carbon policy from wind development by keeping wind at current levels.

  3. Portfolio 3 (with S-K-A*) • Substation Upgrades: • Anadarko Transformer • Chesapeake Transformer • Swissvale-Stilwell Tap (at West Gardner) • El Dorado-Longwood Series Compensation • Lines: • Spearville-Knoll-Axtell* • Spearville-Comanche Co-Woodward-Tuco • Tolk-Potter • Sooner-Cleveland • Iatan-Nashua • Pittsburg-Fort Smith

  4. Axtell Iatan Knoll Nashua Swissvale – Stilwel Tap Spearville Comanche Co Chesapeake Sooner Cleveland Woodward Potter Ft. Smith/VBI Anadarko XF Pittsburg Tolk Tuco El Dorado Longwood Substation Upgrade New 345 kV Transmission Circuit New 765 kV Transmission Circuit Portfolio3, w/ SKA

  5. * 765 kV Construction and Additional Wind • Quanta EHV Study identifies 4,600 MW as the point 765 kV is required • SPP higher wind (7,000 MW) analysis presented at April, 2008 CAWG identified large benefits for higher wind injection at generic wind locations • Higher wind levels identify greater benefit for P3 • April 2008 analysis used generic wind locations • P3 at 345 kV probably will not support 7GW of wind • Numbers shown are indicative, refined high wind analysis currently being conducted and will consider specific more wind locations * Note: Incremental 765 kV benefits not considered. Benefits show are for 345 kV construction

  6. Figure 1 - Spearville Finney Loop 1 Comanche Co. Hitchland` Woodward Wind Injection Locations • Adjustments for wind location have a large impact on design • For example, only 240 MW modeled on Finney – Potter 345 kV line (e.g. Hitchland) despite the fact that queue has large development in that area • Generation Interconnect queue has 8,000+ MW on this transmission line • Higher levels of wind injection will likely need 765 kV support similar to Figure 1

  7. Portfolio 3-A: For Analysis for Current Wind Levels of 2,600 MW • Substation Upgrades: • Potter Transformer • Lines: • Spearville-Comanche Co-Woodward-Tuco • Pittsburg-Fort Smith • Seminole-Muskogee • Wichita-Reno Co-Summit • = removed

  8. Axtell Iatan Knoll Nashua Summit Swissvale – Stilwel Tap Reno Co Spearville Wichita Chesapeake Sooner Cleveland Potter Muskogee Seminole Anadarko XF Tolk El Dorado Longwood Substation Upgrade New 345 kV Transmission Circuit New 765 kV Transmission Circuit Portfolio3-A

  9. Carbon Tax ($/ton) Sensitivity • SPP Staff has conducted a sensitivity to Carbon Tax on the Balanced Portfolio • $15/ton and $40/ton simulated • No additional changes (e.g. extra wind, etc.) • Carbon analysis performed on Portfolio 3-A to tie impact to current levels of wind (i.e. 2,600 MW)

  10. Carbon Impact on Portfolio 3-A 2012

  11. Generation Displacement for P3-A

  12. Carbon Impact on SPP System Prices

  13. Carbon Tax & High Wind • Carbon Tax lowers the margins between coal and gas, thus decreasing potential benefit available • Wind analysis needs to be combined to determine impact of Carbon Tax and Wind • Wind will offset higher carbon based production costs

  14. Going Forward • SPP is currently in the analysis stage for the high wind and future analysis • model building, updating generator database, mapping, etc. • Next Steps - • Future (2017, 2023) analysis • High Wind analysis (stand alone and combined with carbon sensitivity) • 765 kV construction/operation • Impact on reliability plan (negative and positive) • Determine balance adjustments • Leading portfolio moved to approval

  15. Pittsburg – Fort Smith/VBIvs.Seminole - Muskogee Muskogee Ft. Smith/VBI Seminole Pittsburg New 765 kV Transmission Circuit

  16. Questions/Comments ?

  17. Charles CatesEngineering, Planning501.614.3351ccates@spp.org

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