By Marcus Wood, Jennifer H. Martin
6/11/2008

The western U.S. has excellent wind-generation resources stretching over a vast expanse of the West and the Great Plains. The U.S. also has great pent-up demand for wind generation, particularly up and down the West Coast and in the Midwest. Exploitation of this vast wind-generation resource, available where the wind blows hardest and most steadily, is greatly hampered by a lack of economic long-distance transmission facilities and by multiple east-to-west and north-to-south firm transmission constraints found on existing transmission paths.

Any long-distance transmission of large amounts of electric generation presents electrical engineering challenges. Utility engineers routinely surmount such challenges in the construction of long-distance transmission systems for conventional electric generation systems. However, transportation of wind by wire must also accommodate special characteristics of wind generation. Briefly, these key special characteristics are: 1. Low capacity factor. Even in the most energetic wind areas, sites with generation capacity factors of 40 to 45 percent are considered premium sites. By comparison, large thermal generation units can achieve capacity factors in the 85 to 95 percent range. Long high-voltage transmission lines are very expensive, and the reduced capacity factors for wind generation translate to a roughly 2-to-1 cost transmission disadvantage for long hauls of wind-generation megawatt-hours.

2. Hourly forecasting difficulty. Despite continuing improvements in wind forecasting techniques, actual wind generation in each hour can vary substantially from forecast levels. Generally, the geographic areas with the best wind potential are not part of any organized regional transmission organization with centralized dispatch. Instead, each transmitting utility schedules out-of-region deliveries of wind generation based on forecasts and may impose substantial charges for deviations between forecast and actual generation.

3. Intra-hour swings in generation. Wind generation, even if produced over an hour on average in the amount forecast, may vary greatly within the hour. The within-hour output swings can be particularly noticeable as weather fronts pass through. Although the Federal Energy Regulatory Commission’s (FERC) Open Access Transmission Tariff does not address the cost of such intra-hour variations, transmission providers are beginning to assess sometimes substantial new transmission ancillary service charges to cover the supposed cost of such generation swings.

As a result of these aspects of wind generation intermittency, the cost per megawatt-hour of relocating wind generation to other regions can be much higher than the cost of similarly relocating thermal generation. An even greater problem arises when control area operators maintain that they lack the generation flexibility required to provide the necessary hour-to-hour and within-hour shaping of the wind generation required for interregional deliveries.

Some of the tools needed to overcome the economic barriers to long-distance transmission of wind generation are already in limited use. More creative new approaches are also available.

Current tools include:

1. Dynamic scheduling. Wind generation can be telemetered directly into the control area of the distant utility purchaser. With such telemetering, for example, the generation from a Wyoming generation facility sold to Southern California Edison Company could be followed by the centralized dispatch of the California Independent System Operator, rather than by a control area operator in Wyoming. Although dynamic scheduling requires an uncongested transmission path and can present engineering challenges, it has been used frequently in the United States, including for large deliveries of generation capacity over long distances.

2. Storage and exchange arrangements. Utilities have contracted to take the output of localized wind generation to serve local loads in real time each hour, and then deliver an equivalent amount of electricity at a new location convenient to the ultimate output purchaser. Under such “storage and exchange agreements,” a purchaser can receive wind-generation output from an exchanging utility at a prescheduled rate of delivery. The wind generators under the currently effective agreements have not needed to purchase generation-following or intra-hour-variation services. Moreover, the deliveries can be arranged so as to bypass transmission constraints, allowing more generation to be constructed without transmission additions. Finally, because of the delivery provided by the storage and exchange arrangements, the wind-generation owners under the current agreements have avoided the cost of purchasing firm transmission rights equal to the installed capacity of the generation facilities.

The existing tools used to supplement transmission of electricity suggest new contractual arrangements that could reduce the cost of interregional delivery of wind generation. For example: 1. Expansion of the use of dynamic scheduling. FERC should require that a transmitting utility either grant dynamic scheduling requests or demonstrate that the requested service is not feasible. If the transmitting utility maintains that its current system would not support such service, it should be required to perform a study and determine the incremental cost of satisfying the request for dynamic service, and then it should be required to offer such service at cost.

2. Adaptation of storage and exchange arrangements as flexible transmission service. If FERC required it, the transmitting utility could provide the wind developer and the wind-generation output offtaker with creative adaptations of current storage and exchange arrangements designed to reduce or eliminate the burden on the applicable control area operator of inter- and intra-hour generation variations. Such reduction in burden is possible because the control area operator under storage and exchange arrangements both accepts wind-generation output and delivers equivalent output to a new wholesale load. The combination of power deliveries and sales offers opportunities for creative and flexible arrangements beneficial to both the wind generator and the control area operator.

Note that not all changes in wind-generation output burden the control area operator. In hours when the control area operator faced the greatest stress from high-load requirements, it would benefit if it could receive wind-generation output in excess of the wholesale wind-offtaker load it concurrently had to meet. In hours when the control area operator faced minimum generation constraints, it would benefit if it could serve wholesale wind-offtaker load in excess of concurrent wind-generation output.

With FERC’s encouragement, transmitting utilities, wind-generation developers, and wind output offtakers could devise storage and exchange arrangements that better matched the needs of wind generation and control area operators, and that therefore allowed much more wind generation to be economically shaped and delivered from region to region.

3. Use of storage and exchange arrangements to increase the use of new long-haul transmission facilities. Generation planners have struggled with approaches to overcome the relatively low capacity factors anticipated for new long-haul transmission facilities to wind-rich areas. One proposed approach is to interconnect megawatts of wind generation in excess of the firm carrying capacity of such transmission facilities. This approach would at times require partial curtailment of the wind generation; however, such curtailments have been shown to be relatively small as a percentage of total wind generation.

This “excess capacity” approach to increasing transmission facility use could be substantially enhanced through properly designed transmission-wind storage and exchange arrangements. The cost of curtailing wind generation is high, generally approximating the sum of lost energy sales revenues, related lost sales of environmental attributes, and the grossed-up value of related lost production tax credits. Even limited storage and exchange arrangements, with the control area operator taking excess wind generation on the relatively rare occasions when the generation exceeds transmission capacity for delivery during future periods of low wind generation, would greatly reduce the cost of an excess capacity strategy. Moreover, if the control area operator were given in such arrangement qualified rights to select when during low-wind periods it would redeliver the excess wind generation it had stored, as described above, the benefits to the control area operator of such flexibility could offset the cost to the control area operator of the storage and exchange arrangements.

Transmitting utilities are not now required to provide dynamic scheduling or the storage and exchange arrangements described above. Without such enhancements to transmission service flexibility, interregional transmission of wind generation will remain unnecessarily constrained and costly. FERC could perform a valuable service by holding technical conferences to explore how cost-based transmission ancillary service could be better adapted to facilitate the long-distance transmission of wind generation from wind-rich areas to wind-generation-deficient regions.

Originally published in May/June 2008 North American Clean Energy magazine.