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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

Pro-active Transmission Development:Bringing Benefits Online — Sooner

Craig Cox

Interwest Energy Alliance

18 September 2006


Wind energy providing benefits to colorado s consumers

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

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 energy 1998 to 2005 up to 2007

Colorado Wind Energy1998 to 2005…up to 2007


Colorado wind energy 1998 to 2005 up to 20071

Colorado Wind Energy1998 to 2005…up to 2007


Current colorado projects

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


New projects 2006 7

New projects, 2006-7

  • 300 MW in Grover (Weld County)

  • 200-400 MW in Peetz

  • 75 MW in SE Colorado


Hindrances to wind energy

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

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

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


Curtailment payments 2004

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

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

Transmission and Wind Energy

A classic chicken and egg problem…


Typical construction time for large wind project 1 2 years

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


Typical time to complete transmission facilities 5 years

Typical Time to Complete Transmission Facilities: 5+ Years


Cost of delay

Cost of Delay


How to overcome wind and transmission time mismatch

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

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

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


Pro active transmission development bringing benefits online sooner

#1 - Identify the Best

Wind Zones


Pro active transmission development bringing benefits online sooner

Windy

Counties


Pro active transmission development bringing benefits online sooner

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 (???)


Pro active transmission development bringing benefits online sooner

Initial Groupings of Wind Resources

By AWS Truewind


Pro active transmission development bringing benefits online sooner

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


Pro active transmission development bringing benefits online sooner

#2 -Develop Transmission Master Plan


Pro active transmission development bringing benefits online sooner

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


Pro active transmission development bringing benefits online sooner

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


Pro active transmission development bringing benefits online sooner

  • 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


Pro active transmission development bringing benefits online sooner

#3 - Build Transmission to Zones


Ercot s old approach did not work

ERCOT’s OLD Approach - Did NOT Work


Puc strawman original proposal for crez

PUC Strawman (Original) Proposal for CREZ


Pro active transmission development bringing benefits online sooner

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


What would a crez style quantification of colorado s wind resource look like

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.


Thank you

Thank you!

Craig Cox

Interwest Energy Alliance

[email protected]

303-679-9331


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