Transmission Issues With the Integration of Large Scale Renewable Energy Projects

1
Transmission Issues With the Integration of
Large ScaleRenewable Energy Projects

• Geothermal Resources Council
• John Pease PE, MBA
• Project Manager, Renewable Energy
• Bonneville Power Administration
• Monday September 11, 2006

2
(No Transcript)
3
(No Transcript)
4
BPA Today Facilitator Role to Develop New
Renewables

• History 2001 BPA increases wholesale price of
  power due to additional load placed on the Agency
  then Direct Service industries go out of
  business
• BPA at load/resource balance
• Some customers want BPA out of resource
  acquisition the Regional Dialogue
• BPA helps its customers who want to develop their
  own renewable resources today

5
Activities in Support of Geothermal Development

• From 1988-94, BPA spent over 1,000,000 on
  activities promoting geothermal
• Economic impact studies in 5 counties
• Hydrologic studies at 4 KGRAs
• Impact analysis at 3 sites
• Resource assessment in Cascades and SE Oregon
• Environmental baseline at Newberry
• Permitting guides
• Geothermal teaching materials (see handout)
• Outreach to public interest community

6
Challenges

• No RPS in the Pacific NW geothermal must
  compete on its own economic merits
• Conservative utility response Why it wont
  work. Perception can change with education
• Transmission constraints solutions exist

7
Risk Mitigation Someone elses Problem?

• Developers face a multitude of risks (ORMAT,
  4/2005)
• Exploration
• Resource capacity
• Regulatory
• Drilling
• Plant construction
• Financing
• Risk eventually shows up in the PPA power price
• Potentially jeopardizing project development
• Partnership lowers the cost for everyone.

8
The Good News!

• Least Cost Marginal Power for base load resources
  in the Pacific NW - 50 MWh and not going away
• Risk Adjusted Avoided Cost methodology or How
  would you value a CCCT today?
• Energy, capacity credit, green tags, fuel risk,
  environmental and societal cost/benefits compared
  to natural gas
• Geothermal can now compete w/o PTC though PTC
  will help those who can use it (IOUs, IPPs,
  etc.)
• Idaho Power IRP (2004) Geothermal 3rd out of 15
  alternatives for additional power (55/MWh
  levelized) ahead of gas coal

9
BPA Transmission

• BPA Transmission 75 of high voltage in the
  Pacific NW
• BPA building 770 miles of 500 kV circuits
  Largest transmission building program in North
  America
• Yet, transmission system is over subscribed and
  underutilized. What does this mean?
• Song You cant get there from here Lee Roy
  Parnel 1978 Country Classic

10
(No Transcript)
11
BPA (FERC) Generation Interconnection Process
(gt20 MW)

• Interconnection initiated by
• Letter requesting generating interconnection to
  BPA transmission (TBL) see TBL website
• Completed Interconnection Study Request
• Identify service requested Network or Energy
• Refundable deposit of 10k
• Once complete, generator is now in the Queue
• Details at http//www.transmission.bpa.gov/busin
  ess/ generation_interconnection/

12
Once Interconnection Request Completed, Other
Studies Follow

• Interconnection generator now responsible for
• Interconnection Feasibility Study - 10k deposit
• Interconnection System Impact Study - 50k
  deposit
• Interconnection Facilities Study - 100k deposit
• Standard Large Generator Agreement (gt20 MW) is
  signed if transmission is available
• Process is now taking 2 Years

13
Interconnection Request - Continued

• Studies may indicate Interconnecting generator
  may be blocked by someone higher in the Queue
  who needs, but does not have, transmission
  capacity
• Consequently, upgrades then paid by pro rata need
  for the transmission, if the generators agree to
• Paid back by transmission credits after
  construction approximately five years
• Unfortunately, this process has never worked in
  eight years since FERC Order 888 889 created
  Open Access Transmission Tariff system (OATT)

14
Interconnection Request - Continued

• When in the queue, transmission provider may
  offer part of a firm transmission request
• If not accepted, the transmission is offered to
  next in line in the queue
• May accepted partial firm transmission, then
  fulfill plant needs by buying non-firm until firm
  is available maintain position
• If rejected, may go to the bottom of the queue
• May be able to alleviate transmission through
  redirects
• What is your (bankers) risk tolerance?

15
Conditional Firm New (at least a little) Hope
On the Horizon

• Access to transmission determined by Firm and
  non-Firm rights
• Firm transmission guaranteed on all hours
  most expensive, curtailed last (usually in an
  emergency)
• Non-Firm firm rights not used or unallocated
  transmission made available daily, weekly,
  monthly or annually (higher chance of curtailment
  daily goes first, then weekly, monthly etc.)
• Conditional firm Firm except in months when
  curtailment may occur, then non-Firm, but
  curtailed last (non-firm curtailment order)

16
Conditional Firm A Little Hope - continued

• Presented by BPA to FERC March 16th, 2005 in
  Portland
• Conditional firm holder knows maximum curtailment
  exposure 100s hours/month
• If not told in preschedule (24 hour notice) that
  a curtailment may occur, then considered firm
• Uses additional Available Transmission Capacity
  (ATC) that currently goes unused
• Bounds transmission availability risk to enable
  project financing!
• Details at http//www.transmission.bpa.gov/Busin
  ess/Customer_Forums_and_Feedback/Business_Practice
  s_Technical_Forum/documents/Cond_Firm_Update_BPF_X
  .pdf

17
Economic Redispatch A Little More Hope

• Presented by BPA to FERC March 16th, 2005 in
  Portland
• Transmission provider will adjust generation
  within the hour (TBL hydro) to alleviate a
  transmission curtailment, increasing available
  ATC
• Pay for net costs of generation (or loads) who
  may reduce generation to alleviate constraint
• Generators may participate if an economic
  incentive is provided
• Details at www.transmission.bpa.gov/business/
  CongestionManagement/documents/Within-Hour_Reliabi
  lity_Redispatch.pps

18
Was Lee Roy Parnel Right?

• What might be a No! from a transmission
  provider might not be true
• Alternatives may exist
• Asking the right questions might help you
• BPA account executives will help you get your
  energy to load

19
Questions and Comments?