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Transmission for Renewable Energy: Efficient Solutions to Integration Issues Law of Renewable Energy WEBINAR SERIES PRODUCED BY EUCI June 23, 2011 Law of Renewable Energy WEBINAR SERIES 1 To order any of these books please contact

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Transmission for Renewable Energy:

Efficient Solutions to Integration Issues

Law of Renewable Energy

WEBINAR SERIES

PRODUCED BY EUCI

  • June 23, 2011
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To order any of these books please contact Angel Giovannone at (503) 294-9422 or amgiovannone@stoel.com

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Jason A. Johns

Associate Portland, OR (503) 294-9618 jajohns@stoel.com

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Marcus Wood

Partner Portland, OR (503) 294-9434 mwood@stoel.com

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Jennifer H. Martin

Partner Portland, OR (503) 294-9852 jhmartin@stoel.com

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Timothy L. McMahan

Partner Portland, OR (503) 294-9517 tlmcmahan@stoel.com

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Agenda

  • Interconnection
  • Reliability
  • Transmission Service
  • Market Changes
  • Permitting
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Interconnection

  • Which interconnection procedures apply?

– First, you need to determine if your interconnection is subject to state or federal jurisdiction – If Federal, the procedures that apply may depend on the facility’s size

  • Small Generator = ≤ 20 MW
  • Large Generator = > 20 MW
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Interconnection Services

  • What types of interconnection service are available?

– Energy Resource service = Allows generator to connect to the transmission system and be eligible to deliver electric output using existing firm or non-firm transmission on an “as available” basis – Network service = Allows generator to connect to the transmission system:

  • In a manner comparable to that which the TP integrates its own

generating facilities to serve native load customers; or

  • In an RTO or ISO with market-based congestion management, in

the same manner as all other Network Resources

  • Which service should I choose?
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Negotiating the Interconnection Agreement

  • Under FERC’s LGIA, the terms are standard and changes must be

approved by FERC

  • Negotiations focus on:

– Milestones (schedule and payments) – Cost allocation (contingent facilities) – Operational Characteristics

  • Facilitating use of one interconnection capacity by more than one

project or owner

– Phasing – Joint Ownership Agreements – Partial Termination

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Queue Congestion

  • Small financial commitment to enter queue ($10k)
  • Three serial studies

– Feasibility Study – System Impact Study – Facilities Study

  • Little disincentive to withdraw; restudies were common
  • So was suspension
  • Little tied an interconnection customer to its LGIA,

resulting in some walking away

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Interconnection Queue Reform

  • December 2007 Technical Conference

– Serial study practices being slowed by new entry into queues & speed at which projects could develop – Interconnection delays causing trouble in meeting RPS obligations

  • March 2008

– Order issued as a result of technical conference – RTOs/ISOs ordered to report status of respective queues – Identified three needed changes:

  • Increased requirements for entering the queue
  • Eliminate the Feasibility Study
  • First-ready, first-served vs. first-come, first-served
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Queue Backlogs

  • California ISO

– 361 pending interconnection requests (105,000 MW) – 68,000 MW of renewable energy – CAISO’s historic peak demand: 50,270 MW

  • Southwest Power Pool

– 255 pending interconnection requests (57,000 MW) – 50,000 MW related to wind generation (176/196 requests over two years)

  • Midwest ISO

– 348 pending interconnection requests (80,000 MW) – 65,000 MW related to wind generation – Could not clear queue until 2050

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The Results

  • California ISO

– Clustering with queue windows (two per year) – 2 studies (Phase I and Phase II) – Increased, non-refundable financial requirements

  • Southwest Power Pool

– 3 queues, your choice (IFS, PISIS, DISIS) – Suspension only allowed for 18 months after Effective Date – Shared Network Upgrades will be built upon execution

  • Midwest ISO

– Milestones provide “first-ready, first-to-proceed” – No suspension for economic reasons (force majeure only) – Once a GIA is signed, Network Upgrades will be built – ABSOLUTELY NO AMENDMENT TO ISD

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Risk Analysis

What are the risks in filing unexecuted?

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Interconnection Capacity Rights

Aero Energy, 116 FERC ¶ 61,149

  • Developer sought interconnection and transmission

service on jointly-owned transmission line

  • Transmission line joint owners intended to develop

generation that would use respective capacity rights

  • Sagebrush claimed all but 3 MW of transmission

capacity was reserved

  • FERC stated Sagebrush partners have capacity rights, if:

– Demonstrate pre-existing contractual obligations; or – Specific expansion plans, including definitive dates, and milestones met

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Milford Wind Corridor

129 FERC ¶ 61,149

  • Milford’s Request:

– 88-mile, 345 kV interconnection line with 1,000 MW capacity – Built to serve multi-phase wind development – Closed financing for entire line; PPA for 200 MW – Accelerated 100 MW of Phase II – All phases to be operational by 2015

  • FERC approved request based on specific expansion

plans, and material progress toward meeting milestones

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Terra-Gen Dixie Valley

132 FERC ¶ 61,215

  • Owner of the Dixie Valley Line
  • 60 MW existing geothermal facility
  • Sought priority rights to 360 MW
  • FERC Ruling

– Awarded priority to 60 MW capacity – Remaining 300 MW subject to open access

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Boundary Tested

Puget Sound Energy, 133 FERC ¶ 61,160

  • Developing multi-phased 1,250 MW wind project
  • 1,250 MW interconnection built with 350 MW Phase I
  • Environmental studies; EIS; conditional use permit
  • Interconnection agreement signed for 1,250 MW
  • Phases IV and V targeted for 2029
  • FERC Ruling

– Puget may reserve to serve native load – Line must be placed under OATT

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Reliability Standards

  • Are reliability standards mandatory?

– YES10 – Generators are obligated to register

  • Who is subject to registration?
  • Single 20 MVA unit
  • Multiple units at 75 MVA
  • Regardless, are you material to reliability?
  • Who oversees compliance? NERC, RROs
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WECC vs. Gen Ties

Cedar Creek Wind

  • 76-miles, 230 kV tie
  • Ownership change 4 miles

from POI

  • TO operated

relaying/protection systems at POI

  • 10 x 34.5 kV, 3 x 230 kV

breakers at generator

  • Registered as TO/TOP

Milford Wind Corridor

  • 88-mile, 345 kV tie
  • Full ownership
  • Interconnecting at sub with

2 GW connected

  • 2 x 168 MVA GSUs on site

at generator

  • Registered as TO/TOP
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FERC Decision

Cedar Creek Wind

  • Material to reliability
  • CC owns/controls

equipment on one end of the tie line

  • Must be coordinated with

equipment at remote end

  • Fault could lead to loss of

600 MW CCGT

Milford Wind Corridor

  • Material to reliability
  • Owns/operates equipment

at generator

  • Must be coordinated with

equipment at remote end

  • Fault could lead to loss of

1800 MW

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Nobody wants responsibility for a blackout

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Transmission Service

  • My facility is already interconnected, why do I need

transmission service?

– Interconnection service provides no delivery rights – Unless your purchaser is taking power at the busbar, you will need to purchase transmission service

  • Where do I reserve and buy transmission service? OASIS
  • What types of service are available?

– Point-to-point vs. Network – Short-term vs. Long-term – Firm vs. Non-firm – Conditional firm

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Transmission Service

  • Are transmission providers required to treat everyone by

the same rules?

– Yes, FERC Order 888 requires that transmission service be provided on an open, non-discriminatory basis – Transmission providers particularly may not favor affiliates

  • What are the types of transmission providers?

– RTOs/ITCs are independent because they do not actually own or control electric generation resources – Many transmission owners, however, remain as integrated transmission and generation utilities – Some types of transmission providers (e.g., BPA, TVA, WAPA) are subject to limited FERC authority

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Obtaining Transmission Service

  • Are there costs associated with requesting transmission?

– If the system does not have available capacity, a developer may have to pay to upgrade the transmission system to accommodate the requested service

  • How much will transmission cost?

– Integrated transmission/generation utilities may charge the higher of:

  • Incremental costs; or
  • An embedded cost rate

Associated with the requested transmission service – RTO transmission service may be priced on a different basis

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Imbalances

  • When do imbalances occur?

– When the hourly generation as scheduled is different than the actual hourly generation delivered from a facility – Someone has to make up the difference

  • How are imbalance penalties assessed?

– The charges are tiered, i.e., the larger the deviation from your schedule, the larger the charge – Variable generators are exempt from the most expensive tier

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Imbalances (cont.)

  • How can I avoid imbalances?

– Good forecasting – Shaping & Firming arrangements whereby the supplier will take

  • r provide energy, as applicable, in hours when the actual

generation differs from the scheduled amount – Participating in applicable RTO intermittent generation protocols – Delivering to the purchasing utility at the generation project busbar – Delivering using network transmission service

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Ancillary Services

  • Purpose = products designed to maintain reliability on

the grid

  • Types of Ancillary Services
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Intra-Hour Wind Integration

  • What is intra-hour wind integration service?

– Some transmission providers claim that intra-hour variations in

  • utput of intermittent resources impose added costs on the

transmission system operator – Integration service follows variable resources with dispatchable facilities in order to make up moment-to-moment differences in generation output within the scheduling hour

  • Example: BPA
  • Best Approach: pass the costs to your purchaser
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FERC VER NOPR

  • Issued November 18, 2010
  • Comments were due March 2, 2011
  • Issued to address barriers to the integration of variable

energy resources

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FERC VER NOPR (cont.)

  • FERC proposed to revise the current pro forma OATT

and LGIA in three ways to address VER integration:

– Intra-hour scheduling, at intervals of 15 minutes (TPs can permit shorter scheduling intervals) – Power production forecasting

  • TP – those TPs who propose volumetric differences in the Schedule

10 rate would be required to provide VER power production forecasting

  • ICs – requirement to provide meteorological and operating data to

interconnecting TPs; requirement to report forced outages reducing generating capacity by 1 MW or more for 15 minutes or more (SGIA exempted)

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FERC VER NOPR (cont.)

– New Generator Regulation Service, Schedule 10, to give TPs a mechanism to recover the costs of capacity used to provided generator regulation reserves , both for the transmission customer serving load within the transmission provider’s BAA and for exports

  • Applicable to all generators, but a TP may apply to FERC to charge

a volumetric difference for VERs if the TP can justify that the VERs impose a different per unit impact on the system

  • BUT, no volumetric difference permitted without intra-hour

scheduling and power production forecasting

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  • Pre-2009

– No separate service or rate

  • FY 2009

– Within Hour Wind Balancing Service Rate

  • $.68/kw.-mo.
  • FY 2010-2011

– Within-Hour Wind Balancing Service Rate

  • $1.29/kw.-mo.
  • Initially proposed at $2.72/kw.-mo

The Rapid Revolution of BPA’s Wind Balancing Service

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  • Three components

– Regulation – Following – Imbalance

  • Based on a pre-established amount of balancing

reserves

  • DSO 216
  • Persistent Deviation Penalty

A Closer Look at BPA’s Current Wind Balancing Service

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DSO 216

  • How does this fit in?

– BPA monitoring inc or dec reserves deployed from the FCRPS – Requires different responses:

  • 85% deployed (warning)
  • 90% deployed

– Overgeneration: wind plants must limit wind generation to their schedule plus proportional allocation of dec reserves – Undergeneration: wind plant schedules curtailed to actual

  • utput plus proportional allocation of inc reserves
  • 100% deployed

– Overgeneration: wind plants limited to schedule – Undergeneration: schedules cut to actual output

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Source: www.bpa.gov, as of May 3, 2011

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Source: www.bpa.gov, as of June 20, 2011

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Source: www.bpa.gov, as of June 20, 2011

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Environmental Redispatch

  • Background – the “June Event”
  • BPA issues proposal to address high water / high wind

events; seeks comments

  • Final Interim Record of Decision issued May 13, 2011
  • Challenge pending at FERC
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CAISO Market Changes

  • Renewable Integration Market & Product Review –

Phase 1; proposal:

– Lower energy bid floor from -$30/MWh to -$300/MWh – Elimination of PIRP after end of 2014; limited grandfathering

  • Renewable Integration Market & Product Review –

Phase 2; early stages

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Queue Reform, Rd. 2

  • Cal ISO GIP

– Clearer financial security posting requirements – Scalability issues addressed

  • Midwest ISO

– Tougher to proceed to DPP – Net Zero Interconnection Service – Dispatchable Intermittent Resource

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Generation Transmission Lines and Permitting

  • What if it’s part of generation facility?
  • What if it’s an independent energy facility?
  • The “but for” test: “related and supporting” or “stand alone”?
  • When does a line upgrade become a new facility? Ramifications?
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Ramifications in Permitting

  • Interrelated and interdependent facilities-NEPA and other

unpleasantness

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Locating Transmission Lines

  • The pressure to co-locate transmission lines within existing corridors

(new lines on existing poles; new poles)

  • Logic from the perspective of permitting agencies-land disturbance

and environmental considerations

  • Issues of facility control, outages and O& M
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What’s In It for the Land Owner?

Lost opportunities, costs and agricultural impacts

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Partnering with Utilities

  • Land control – advantages of partnering with utility
  • Off-site substation construction costs, engineering and

design, and practical capabilities of “going it alone”

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QUESTIONS?

Law of Renewable Energy

WEBINAR SERIES

PRODUCED BY EUCI

  • June 23, 2011
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