Northwest Wind Integration Action Plan Jeff King Northwest

Northwest Wind Integration Action Plan Jeff King Northwest Power & Conservation Council June 27, 2007 June 2007

Northwest wind power development June 2007 2

Northwest generating capacity 54, 600 MW June 2007 3

Wind projects Operating Under construction Expected to be constructed in near-term 100 MW (area proportional to installed capacity) June 2007 4

Drivers of wind power development • Federal Production Tax Credit • Natural gas price uncertainty and volatility • Concerns regarding climate change WA, OR & CA restrictions on acquiring CO 2 -intensive resources. • State Renewable Portfolio Standards Washington (15% by 2020) Oregon (25% by 2025) California (33% by 2020) • (Until recently) Favorable competitive position of new wind (w/PTC) vs. new fossil plants. June 2007 5

Wind Integration Forum • Chartered as a Council advisory committee for a two-year period • Monitor, facilitate and review implementation of WIAP actions. • Actions are funded and otherwise supported by participating organizations • Semiannual meetings of the Steering Committee; bimonthly meetings of the Technical Work Group June 2007 6

Issues addressed by WIAP Phase I • What is the role of wind energy in a power supply portfolio? • Does the Northwest have the operational capability (“system flexibility”) to integrate 6000 MW of wind? • What are the transmission requirements for 6000 MW of wind power? • How will the costs of wind integration be recovered? • Over the longer-term, how can the Northwest secure its wind potential in the most cost-effective manner? June 2007 7

Key findings: Role of wind energy The principal benefits of wind energy are energy-related: • • Displacement of fossil fuel emissions Displacement of carbon dioxide production Primarily through displacement of baseload natural gas plants Reduced exposure to natural gas price uncertainty and volatility Extreme heating and cooling events frequently are accompanied by region-wide high-pressure weather systems (i. e. , stagnant air). Wind’s capacity value probably lower than provisional 15%. Northwest utilities will need to rely on capacity resources (hydro, thermal or demand-side) to meet peak loads. June 2007 8

Wind generation declines during extreme temperature conditions June 2007 9

Action A 1: Reassess 15% pilot sustained wind capacity value (Adequacy Forum, underway) June 2007 10

Key findings: System Integration Wind energy behaves like negative load. Not fundamentally different from managing load variability. However, wind output is more variable and less predictable than load. Integration cost is the cost of committing generating capacity for operating reserves and for managing hour-to-hour changes in wind output. Ø Range from $2 - 16/MWh Ø Low end: Diversified low (e. g. , 5 – 10%) penetration within control area Ø High end: Undiversified high (e. g. , 20 – 30%) penetration within control area No fundamental technical barriers to integrating 6000 MW. Load growth and additional constraints on operation of hydro system will erode this capability. June 2007 11

System Integration Process Raw wind plant output > Output following within-hour regulation & load-following > Output with storage and shaping > June 2007 12

Impact of wind on system variability June 2007 13

Integration costs are small fraction of delivered wind energy cost NO CO 2 cost or risk Operating reserves for integration No fuel cost or fuel price risk Large transmission component Large capital investment. Value of $, commodity cost & wind demand risks PTC acts as negative variable cost Fifth Power Plan assumptions IOU ownership 30% capacity factor 2010 service E. WA/OR location Current costs are substantially 14 higher 2007 June

Integration actions A 2: Refine estimates of the cost and supply of wind integration services (BPA and other control areas) A 3: Develop high resolution, chronological Northwest wind data set (BPA, NREL - funded for 2007) A 11: Evaluate costs & benefits of wind forecasting network (Forum - 2008 action) A 12: Implement ACE diversity interchange pilot (PAC, IPC, NWE, BCTC - underway) A 13: Improve markets for flexibility services (Forum kickoff workshop 7/12/07) June 2007 15

Key findings: Transmission • Existing transmission capacity can support anticipated wind development only through 2009. • The current practice of relying entirely on firm transmission capacity for an energy resource with little firm capacity contribution needs to be revisited. • Additional development will require combination of transmission expansion and innovative “less-than-firm” transmission products • Access to wind sites with higher capacity factors and more diverse generation patterns will lower busbar and wind integration costs. June 2007 16

Transmission path constraints June 2007 17

Path constraints are affecting location of wind project proposals June 2007 18

Transmission actions I A 7: Develop “less-than-firm” transmission products and other means to improve efficiency of transmission use (BPA underway). A 8: Develop plans of service for reinforcing constrained paths (BPA - underway) A 9: Develop approach to financing market-driven reinforcements and expansions (BPA - underway) A 6: Review and amend as necessary regulatory policies to support more efficient use of transmission (Commissions, OPUC lead - underway) June 2007 19

Transmission actions II A 4: Develop transmission planning principles and methodology for optimal firmness of service (NTAC kickoff workshop 6/21/07) A 5: Apply technical planning methodology to identify leastcost transmission expansions (Columbia Grid & NTTG, 2008 action) A 10: Evaluate approaches to delivering wind energy from Montana and other promising but isolated resource areas (NTAC - 2008 action) June 2007 20

Securing wind potential in the most costeffective manner in the long-term A 14 a: Characterize demand-side, power generation, storage and other options for augmenting system flexibility (Forum - 2008) A 14 b: Improve understanding of tradeoff between competing uses of system flexibility (NPCC - 2008) A 15: Develop planning framework to optimize tradeoffs between: costs transmission expansion and resulting benefits of geographic diversification of wind projects, and costs of augmenting system flexibility (NPCC - Sixth Power Plan) June 2007 21

http: //www. nwcouncil. org/energy/Wind/library/2007 -1. pdf June 2007 22