Resource Documents: Grid (164 items)
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New York State Great Lakes Wind Energy Feasibility Study
Author: New York State Energy Research and Development Authority
[from Summary:]
Based on the totality of this analysis, this concludes that Great Lakes Wind currently does not offer a unique, critical, or cost-effective contribution toward the achievement of New York State’s Climate Act goals beyond what existing, more cost-competitive programs are currently expected to deliver. This conclusion is based on a fulsome analysis of the resource development costs, ratepayer impacts, expected State benefits, transmission and interconnection limitations, infrastructure and supply chain constraints, visual impacts, and potential environmental impacts of Great Lakes Wind, as discussed below and throughout the Feasibility Study.
The Feasibility Study analyzed the physical characteristics of Lake Erie and Lake Ontario to determine that they would require a combination of fixed offshore wind foundations in Lake Erie and floating offshore wind foundations in Lake Ontario. The Feasibility Study further notes that the potential theoretical buildout of the New York areas of each lake could result in a generation capacity of up to 1,600 megawatts (MW) in Lake Erie and up to 15,000 MW in Lake Ontario. But this theoretical and technical potential faces numerous practical considerations that would need to be addressed before such projects can be successfully commercialized and benefit the State. These practical considerations include higher relative costs compared to alternative renewable energy generation, risks associated with new technologies (e.g., floating wind platforms and ice loading), lack of an existing supply chain, lack of adequate port facilities and specialized vessels, limited Points of Interconnection (POIs) and associated transmission headroom, and challenges related to visual impacts, wildlife impacts, and uncertainties with regards to environmental risks as well as conflicts with other lake uses including commercial and recreational fishing, shipping, and navigation.
The Feasibility Study estimates costs associated with Great Lakes Wind that at first appear comparable to costs under the Offshore Wind Standard. However, when comparing the costs and benefits of Great Lakes Wind to other renewable energy options in the State’s portfolio, the appropriate comparison is to land-based renewables and not offshore wind projects.
Great Lakes Wind does not provide the same electric and reliability benefits that offshore wind offers New York State. The PSC adopted the Offshore Wind Standard “… because of its proximity and direct access to load centers, offshore wind would provide substantial reliability and diversity benefits to the electric system […] It may also produce significant public health benefits by displacing fossil-fired generation in the downstate area.”4 Great Lakes Wind projects would not have the same proximity and direct access to load centers (Zones J and K) or displace downstate fossil-fired generation. Therefore, at the interconnection points of Great Lakes Wind projects in Central and Western New York, the more appropriate cost comparison is with more cost-effective technologies typically sited in that region such as land-based wind and solar.
This white paper finds that Great Lakes Wind projects would be significantly more costly for ratepayers to support than projects currently advanced under Tier 1 of the Clean Energy Standard (CES), such as land-based wind and solar. For example, the 2021 Tier 1 solicitation resulted in Index REC Strike Prices between $42 and $63/MWh, which is 55 to 230 percent cheaper than the $98 to $138/MWh range estimated for Great Lakes Wind projects. Moreover, that cost differential could increase further as the Feasibility Study cost estimates of Great Lakes Wind do not fully account for additional costs associated with interconnection, infrastructure, and labor, which would require site-specific evaluations and more detailed modeling.
The potential grid Points of Interconnection (POIs) identified for Great Lakes Wind in the Feasibility Study are in areas with limited hosting capacity, with competition from other less expensive land-based renewable generation projects which are also advancing in this region. As a result, Great Lakes Wind projects would incur high interconnection costs to advance and would displace lower-cost alternatives.
From an infrastructure perspective, ports around the Great Lakes would need, in some cases, significant upgrades to support the development of these projects, and in-lakes vessels or purpose-built vessels would need to be used for construction and operation. The required ports, vessel infrastructure, and supply chain investments needed to execute Great Lakes Wind were not quantified in the Feasibility Study and would add to the overall cost of Great Lakes Wind.
Substantial public and regulatory concerns have also challenged wind energy projects in and around the Great Lakes, primarily due to anticipated viewshed impacts and implications of the projects on wildlife. Through the public feedback events and webinars, the public expressed a wide range of interest, both in support of and expressing concerns about Great Lakes Wind. Viewshed, environmental, and public health issues are the primary concerns, and job creation and economic development opportunities are the primary arguments supporting Great Lakes Wind. The Feasibility Study demonstrates that the visual impacts of Great Lakes Wind, at least in Lake Erie, would be considerable given the need for a relatively limited distance from shore necessary to support a project at scale in that lake. For example, in Lake Erie, limiting the viewshed impact by siting turbines beyond 12 miles from shore would reduce the potential hosting capacity from 1,600 MW to less than 200 MW and further diminish the economic viability of these projects.
With regards to the impact of Great Lakes Wind on wildlife species and the environment, this issue is exacerbated by the lack of data relating to the temporal and spatial distributions of wildlife both at specific locations and across the Great Lakes as a whole, including data on aerial fauna, fish habitats, benthic communities, and human uses. Further, sediment contamination is widespread but not well mapped to support least impact site identification. And the extent and duration to which Great Lakes Wind development could resuspend or redistribute these contaminants are uncertain. Each of these issues imparts development risks and uncertainties to potential projects. These issues are not necessarily insurmountable, but additional research, data collection, and analysis are warranted to identify areas of lowest risk and support project development certainty.
While the Feasibility Study identifies job and other economic benefits that could arise from Great Lakes Wind development, without the strategic case for Great Lakes Wind as a critical contributor to the Climate Act goals, these benefits alone do not justify the high level of ratepayer cost given the renewable energy alternatives that have already demonstrated their ability to contribute in more beneficial ways. NYSERDA has not identified unique characteristics of Great Lakes Wind that reflect a component otherwise missing in the State’s efforts to achieve the Climate Act goals. The response rate to Tier 1 solicitations indicates an adequate development pipeline in the geographies where Great Lakes Wind could interconnect to and already maximize the contribution from those areas to at least the 70 percent renewables by 2030 target. Without unique characteristics that would set Great Lakes Wind apart from more cost-effective contributors towards the Climate Act goals, the high additional cost is challenging to justify, at least with a view to the 2030 target.
After completing the Feasibility Study and considering these various dimensions collectively, NYSERDA recommends that now is not the right time to prioritize Great Lakes Wind projects in Lake Erie or Lake Ontario.
New York State Great Lakes Wind Energy Feasibility Study
Wind and Solar—The Penetration Problem: The More You Do, The Harder It Gets
Author: Curry, Judith
There seems to be a belief that increasing the level of wind and solar projects will make subsequent progress with these resources easier. Nothing could be further from the truth.
Increasing penetration levels of wind and solar is like a Sisyphean task, except that it is worse. The challenge may be better understood as akin to pushing a huge rock which is getting heavier and heavier, up a hill of a steeper and steeper slope while the ground below gets slicker and more unstable. The problems associated with increased penetration swamp any potential benefits that might be achieved through economies of scale.
The bulk power system has traditionally been strong and very robust. There are generally not significant problems associated with adding small system elements (small amounts of wind and solar) which lean on the system, rather than support it. The system has a limited ability to absorb wind and solar power and can use it to displace generation which relies on costly fuels. But at higher penetration levels this ability is greatly reduced and the economics can degrade and even reverse. Listed below are some reasons why increasing the penetration levels of renewables will lead to rapidly increasing costs as well as rapidly decreasing reliability.
1) Wind and solar do not readily supply essential reliability services. Conventional generation has characteristics that support the stability and operation of the grid. They have inertial mass and spin in synchronism with the wave forms powering the system while readily providing voltage and frequency support. As wind and solar make up a larger percentage of the generation resource base we see an erosion of these desirable characteristics. Some argue that electronic emulation can serve to compensate for the loss of these characteristics but it is costly and the results are inferior. Previous writings going into detail on this topic include: judithcurry.com/2015/05/07/transmission-planning-wind-and-solar/, judithcurry.com/2016/01/06/renewables-and-grid-reliability/.
2) Wind and solar are intermittent resources and their availability/output often does not match or support system needs. While there is hope for battery technology, current goals are modest. Other resources must compensate for the intermittency of wind and solar. The greater the percentage of wind and solar the greater the challenge and cost for backup. Previous writings on this topic include: judithcurry.com/2014/12/11/all-megawatts-are-not-equal/, judithcurry.com/2014/11/05/more-renewables-watch-out-for-the-duck-curve/.
3) The success of wind and solar installations is highly location specific. You can pull up maps showing the suitability and appropriateness of various locations for both wind and solar power. Other land use considerations make locations more or less suitable for wind and solar as well. Current effort to increase wind and solar make use of the most optimal sites. Remaining sites are less optimal. As penetration levels increase above current levels the suitability of potential sites will decrease. The following posting cowritten with Rud Istavan provides some discussion of locational problems: judithcurry.com/2016/03/20/energy-strategies-horses-for-courses/.
4) Wind and solar depend on materials which must be mined and their ability may be limited. Greatly increasing solar and wind production will likely increase costs and create supply problems. European wind power is already seeing a fight over scarce materials.
5) As wind and solar generation increase penetration it will become more and more challenging for other resources to subsidize their expansion. It’s one thing to subsidize a small component of the generation mix, another thing entirely to subsidize the major components. See: judithcurry.com/2015/04/21/what-should-renewables-pay-for-grid-service/, judithcurry.com/2015/02/09/clean-air-who-pays/.
6) It takes a lot of energy to build wind and solar facilities. Their operation and support consume a lot of energy. Many see that it is doubtful that such facilities can support themselves, serve load and provide enough energy to build replacement facilities of the same sort. Additionally, if electric vehicles are thrown in, the problem is further magnified. The “green” plan to eliminate gas appliances and added losses from increased battery deployment will not help either. There are a class of concerns focusing on all the energy and resources consumed by wind and solar resources. This is referred to as the energy density or power density problem. These concerns have been outside my area of experience. Here are a couple links discussing these type of concerns: (energycentral.com/c/ec/future-energy-why-power-density-matter, www.afs.enea.it/buceti/Texts/SustainablePowerDensityInElectricityGeneration_OpenVersion.pdf, www.forbes.com/2010/05/11/renewables-energy-oil-economy-opinions-contributors-robert-bryce.htm, lifepowered.org/power-density-why-renewables-may-not-be-the-best-choice-for-the-environment/..
7) Wind and solar make the study, control and operation of the power system more complicated and uncertain. These resources are intermittent and more unpredictable for operators to contend with. To maintain stability good modeling is imperative. Detailed models are run involving complex differential equations. Planners can force builders of large power plants to provide pretty good data on the plant impacts. Getting good data for dispersed projects with many small elements which might change during a project and after installation is much more challenging. Lastly, system operators and planners have years of experience with large rotating machines, not as much with wind and solar.
8) Widespread deployment of wind and solar would require that power be transmitted across great distances (or you would need an unrealistic and incredible amount of battery storage.) Getting wind’s power from the plains to the population centers involves long transmission lines. Green advocates argue that imbalances between load and generation from solar and wind resources can be overcome by drawing on resources from a broader geographical area. This requires even greater needs for long power lines and a robust grid. Wind and solar produce DC power which must be converted, with the help of the grid, to AC power. Edison and Tesla had a battle years ago over AC and DC power. Tesla won because to transmit power a long distance you need to use an alternating current system. As noted in item 1, solar and wind do not provide sufficient elements like inertia and vars for such a system to remain stable. (Side note-A high voltage DC line can transmit power great distances with lower losses. However, to utilize a high voltage DC line it is imperative to have a strong AC system receiving the power. The system must be robust such that the power can be converted from DC to AC. High voltage DC lines will not be the savior of a wind and solar based system.) While high levels of wind and solar penetration require a robust grid, their greater presence reduces the capability of the grid.
The above is a formidable list of challenges. How might they be overcome? Not by economies of scale from increased wind and solar production. First off, it’s hard to imagine that any economies of scale would allow these resources to leap the formidable challenges described above. Secondly, it does not appear that significant improvements in economies of scale are to be expected. My perusal of the topic shows that attempts to find economies of scale have all failed. Building more and more smaller units likely will not provide greater economies of scale due to increased material costs. Larger wind and solar facilities incur a class of costs not seen by smaller facilities. Promoters of wind and solar argue instead that smaller local projects provide more benefits than might be obtained from larger facilities.
Could nuclear energy be a piece of a lower carbon emission future? Most certainly. None of the above concerns apply to nuclear power. We could see cheaper costs from standardized nuclear facilities and reasonable regulations. Hydro too works well with the power system. Unfortunately, there are negligible to no potential locations to expand hydro generation. (Note—pumped storage is an option for storing energy, but not producing additional net energy).
It is way too soon to be envisioning a 100% renewable future with significant contributions from current wind and solar capabilities. It is not a good strategy to support current “green” technologies and retire and prohibit conventional generation hoping that a miracle will occur when we need it. Perhaps with the extensive deployment of nuclear power, carbon capture and other technologies we might be able to approach a zero-carbon grid. At best, current wind and solar technologies will play at most a small part in such a plan.
October 3, 2022
Wind Power and Clean Energy Policy Perspectives
Author: Benton, Wash., Public Utility District
Executive Summary
Clean energy technology and public-policy development continue to be in the news and at the forefront of much political debate and discussion. While wind power has emerged as a popular choice for helping meet greenhouse gas emission reduction goals, reasonable questions continue to be raised regarding its ability to cost-effectively contribute to the powering of modern civilization and how the lifecycle environmental and ecological impacts compare to other types of technologies.
With Washington State’s passage of the Clean Energy Transformation Act (CETA) in 2019 and the current schedule for expiration of renewable energy federal tax credits, there is a resurgence in proposed wind power development activity in the Pacific Northwest (PNW), including projects proposed for eastern Washington and Benton County specifically.
As developers and many elected officials tout the economic and environmental benefits of wind farms, Benton PUD believes it is important for our customers and the general public to hear utility perspectives. Unlike the narrower focus of some wind power interests, utilities must balance environmental benefits and concerns with costs and power grid reliability; and we will be held accountable if we fail on any of these dimensions.
While Benton PUD acknowledges wind power development in the PNW will likely continue as Washington State utilities respond to the 2025 CETA deadline for eliminating coal-fired energy and in response to nearby state and corporate clean energy mandates and goals, we do not support further development of wind power in the PNW for the following primary reasons:
1) Benton PUD’s current power supply is hydro and nuclear based and is over 93% “non- emitting” by Washington State standards. While we are ahead of the clean energy curve, we do experience supply deficits during hot summer months and deeply cold winter periods. To cover these deficits, we make power market purchases from generation resources that can be counted on to run on the days and hours needed (dispatchable). Since wind power relies on natural weather conditions decoupled from electricity demand, it is not dispatchable generation and therefore will not help us resolve our seasonal energy deficit problems.
2) The PNW’s hydroelectric generation resources are the foundation of a reliable and clean energy supply that has historically resulted in Washington State contributing no more than 0.5% to the nation’s annual total greenhouse gas (GHG) emissions from electricity production; even with soon to be retired coal-fired power plants in the mix. Further development of wind power in the PNW will not result in consequential reductions in national or global GHG emissions attributable to Washington State utilities and will do very little to mitigate the increasing risk of northwest power grid blackouts; which could grow to a 26% probability by 2026 if utilities are unable to replace the reliable generating capacity of shuttered coal plants.
3) The low availability of wind power requires utilities to continue paying for dispatchable generation capacity that may run infrequently but is still sized to meet most of the peak energy demand on the grid. This “double paying” is why electricity rates in countries and states with high wind penetrations are rising despite the declining costs of this popular renewable energy source. Benton PUD believes further wind power development will unnecessarily contribute to increases in northwest utility retail electricity rates which could erode the economic development advantage low rates has given our region for many years.
4) Energy production from wind farms in the PNW is often high during periods of maximum hydro generation contributing to energy gluts that can drive short-term market prices to zero or even to negative values due to federal tax credits received by wind power. To minimize the net cost of hydro generation the region needs for year-round flexible and reliable electricity, the value of surplus hydro energy sales needs to be maximized. Building more wind farms in the PNW will contribute to untimely energy supply gluts and low short- term market prices which reduces surplus hydro energy sales revenues, increases net hydro power costs and puts upward pressure on retail rates Benton PUD and other utilities charge our customers.
5) Benton PUD believes the best long-term, sustainable and environmentally responsible strategy toward meeting the CETA goal of 100% clean electricity in Washington State by 2045 could be to transition coal power to natural gas and then natural gas to nuclear. It is estimated wind power requires 30 to 45 times as much land and about 10 times as much concrete and steel to produce the equivalent power of nuclear. In addition, a recent study estimates that assuming hydro and nuclear power in the PNW stay in place, meeting a theoretical 100% clean electricity goal in our region using wind (and solar) power would require a land area 20 to 100 times the area of Seattle and Portland combined.
6) Benton PUD supports Energy Northwest (EN) in their efforts to develop small modular reactor (SMR) technology. However, we are concerned continued large-scale investments in PNW wind power projects will contribute to increases in the normally surplus annual energy supplies in the region thereby eroding the hourly energy supply opportunities needed by SMRs to achieve economic feasibility. Maintaining the existing Columbia Generating Station operations while expanding SMR technology development and possible manufacturing in the Tri-Cities represent opportunities for economic stability and growth in an area with a long history of grid-scale energy production and world class scientific research capabilities.
As some legislators and certain advocacy groups continue to call for more wind power while simultaneously calling for removal of hydro-electric dams, Benton PUD believes it is important for our customers and citizens of Washington State to hear the utility side of the energy story. To this end, we are committed to facilitating education and outreach efforts based on the premise that all energy choices represent economic and environmental tradeoffs and that consideration of utility business models and the physics of the power grid matter when taking a position to promote one form of power generation technology over another.
Existing wind farm development in Washington State and along the northern Oregon border has already resulted in the industrialization of previously scenic hillsides, canyons and desert vistas in the region in and around Benton County. Before Benton PUD customers and citizens throughout our region accept further sacrifice of the natural beauty and open spaces that are part of our way of life, we want them to know there are other options we should be asking our legislators and utility industry leaders to urgently and seriously consider. This is the reason for this report and for our formal declaration that Benton PUD does not support further development of wind power in the PNW.
Existing Power Resources and Loads
Despite clean energy policies and trends favoring wind and solar power, continued development of wind farms in the northwest is not expected to be necessary or beneficial to serving the interests of Benton PUD customers for at least the next decade or more. This is primarily due to our hydro and nuclear rich wholesale power supply contract with the Bonneville Power Administration (BPA) which entitles Benton PUD to annual energy amounts that are normally greater than what is consumed by our customers. In addition, our BPA contract in combination with other energy purchases and contracts results in a power supply that is already over 93% “non-emitting” and clean by Washington State standards.
With this said, it is important to recognize Benton PUD does face significant power supply challenges under the terms and conditions of our current BPA contract. These challenges are rooted in the timing of BPA energy delivery which does not always align with our customer demand for electricity. Benton PUD is a “summer peaking” utility with our highest customer demand being driven by irrigated-agriculture pumping operations combined with high residential and business air conditioning; see FIGURE 1.
FIGURE 1
As a “Slice” customer of BPA, Benton PUD has rights to a fixed percentage of the electricity generated by BPA resources for any given hour of the year which can be highly variable. As BPA resources are predominantly hydro-electric, the variability is driven by the timing and quantity of runoff from snowpack as well as short term precipitation events which must be managed to serve interests that compete with power generation; including fish and wildlife, flood control, river navigation and recreation.
To gain further perspective, it is instructive to know that Benton PUD’s annual allocation of BPA wholesale energy in typical water years delivers about 225 average megawatts (aMW) which is more than our total annual customer retail energy consumption forecast beyond the year 2030. On average, our BPA supply is currently 11 aMW more than our customers consume on an annual basis. However, while Benton PUD currently has a “long” annual energy supply position, we do experience regular seasonal energy supply deficits in the summer and on occasion can come up short during deep cold periods in the winter. These seasonal energy supply shortfalls, referred to as capacity deficits, are a function of Benton PUD’s dependence on the availability of “fuel” (river flows) for BPA’s hydro resources which can vary significantly from year-to-year and month-to-month; see FIGURE 2.
FIGURE 2
Under Benton PUD’s Slice contract with BPA, they are required to guarantee delivery of firm monthly energy represented by the combined total of a “Block” and “Critical Slice” amount. The “Above Critical Slice” is the amount of energy BPA is forecasting will be available to Benton PUD but not guaranteed. Slice customers can re-sell surplus energy received from BPA when supply exceeds what is required to serve customer loads but in return must accept and independently manage the risk that loads may be higher than the available BPA supply.
Any forecasted capacity deficits require Benton PUD to make purchases from wholesale electricity markets in order to augment our long-term power supply contracts. Consequently, we have people, processes and contracts in place to be sure our customer electricity demand is completely supplied on an hourly and around the clock basis. Benton PUD’s wholesale electricity purchases are typically made in short-term monthly, weekly, day-ahead and hourly markets from generation resources that can be counted on to run on the days and hours needed (dispatchable). These dispatchable generation resources provide needed capacity to cover energy supply deficits that occur on the hottest and coldest days of the year.
Since wind power relies on natural weather conditions decoupled from electricity demand, it is not a dispatchable generation resource and therefore development of more wind power will not help Benton PUD resolve our seasonal capacity deficit problems; particularly our most acute deficits which occur in summer months with very low levels of wind. We are also concerned that preferences for wind power risk under investment in dependable and dispatchable natural-gas generation plants most utilities believe will be essential for replacing the capacity of coal-fired plants being rapidly retired and shut down in the Pacific Northwest and throughout the western United States.
While wind energy developed on a large scale can be a substitute for much of the annual energy produced by fossil-fueled power plants, it cannot provide the equivalent capacity required for balancing electricity supply and demand on an around the clock basis, and under a wide variety of weather conditions. Because the northwest is so dependent on the availability of water for hydro-electric generation, the coldest and hottest days of a year in which water resources are at a critically low level are of particular concern for electric utilities and is why other reliable and dispatchable generation must be standing by and ready to run on demand. When power grid supply does not meet demand on a moment-by-moment basis, blackouts can occur. Benton PUD is concerned that a deepening dependence on wind power as a replacement for energy produced by coal plants in the northwest could have serious consequences in the not-too-distant future if grid operators are faced with the simultaneous occurrence of drought conditions (low hydro power production), extreme temperatures, low wind and not enough dispatchable electricity generators to meet peak customer demands.
To gain further perspective, it is also instructive to consider Benton PUD’s 11 aMW “long” BPA annual energy position in the context of customer growth which is currently forecasted to result in an increase of about 0.4 aMW of energy consumption per year. This relatively low growth rate is driven by our continued investments in effective conservation measures as well as improvements in the energy efficiency of new homes and businesses. In the simplest analysis, Benton PUD’s expected annual supply of BPA power represents over 27 years of customer growth which means we are not currently looking to add substantial amounts of “baseload” annual energy to our power supply portfolio from wind power or other resources.
With this said, new large loads associated with electricity intensive businesses or industry locating in Benton PUD’s service territory are a wild card that could require acquisition of new generation resources. Another resource acquisition driver could be preferences for wind and solar power which are often used to brand businesses as sustainable. In either case, given the requirements of Washington State’s Clean Energy Transformation Act (CETA) and other clean energy policies and preferences in adjacent states and regions, wind and solar power may be the only significant energy resources available to meet a future Benton PUD need. While not ideal, we would choose solar power over wind given that solar energy production curves are better aligned with our summer peaking load profile and would contribute to reducing our regular summer capacity deficits on most days.
Existing Wind Power Resources
Currently, Benton PUD’s power supply portfolio includes wind energy through direct contracts from the Nine Canyon (9 MW) and White Creek (9.1 MW) projects delivering about 5.7 aMW of total energy on an annual basis. These contracts were initiated by Benton PUD in response to the qualifying renewable energy requirements of Washington State’s Energy Independence Act (EIA) which initially did not include energy from existing hydro generation.
In addition to direct wind power purchases, Benton PUD’s contract with BPA includes an allocation of about 1.4 aMW of their wind portfolio’s annual energy production. All the wind resources in Benton PUD’s portfolio along with BPA’s hydro generation resulting from incremental improvements to turbine-generator efficiency (incremental hydro) are considered EIA qualifying renewable energy. This means energy from these resources provide a renewable energy credit (REC) for every megawatt-hour of electricity generated.
REC allocations and purchases are how Benton PUD meets the renewable portfolio standard (RPS) currently required by EIA mandates. In 2020 Benton PUD will need a total of about 30 aMW of REC allocations and purchases each year to meet the current 15% RPS requirement. We plan to meet our compliance requirement with 7.1 aMW of total wind power RECs from Nine Canyon, White Creek and BPA; 2.6 aMW of BPA incremental hydro REC allocations; and 20.4 aMW of REC purchases from other entities, including wind farms.
It is important to emphasize that a REC is a certificate corresponding to the environmental attributes of energy produced from qualifying renewable resources and does not necessarily represent purchases of physical electricity. While Benton PUD has contractual rights to the electricity produced by the Nine Canyon and White Creek projects, it is usually surplus to our annual customer energy requirements except under a worst-case low hydro generation scenario.
With that said, Benton PUD’s share of Nine Canyon’s physical electricity is always scheduled to supply our load with the net effect during low customer load periods of increasing our BPA hydro surplus which we sell in regional wholesale electricity markets. Due to power scheduling complexities, Benton PUD’s share of the White Creek project’s physical electricity is bundled with other utility shares and sold to another counterparty at a price currently well below the relevant market power index. This below index pricing is an indicator of the reduced value of wind energy compared to other more dependable generation resources.
Revenues from the sales of physical electricity attributed to Nine Canyon and White Creek are considered as offsets to the total annual cost of Benton PUD’s EIA renewable-energy compliance which is budgeted to be $3.8 million in 2020. We expect to continue to rely on REC purchases as the primary means for meeting EIA mandates with some relief possible in 2030, depending on CETA rules which are currently under development.
Benton PUD considers the incremental cost and dependence we have on continued operation and development of wind and solar power for REC purchases as a perverse outcome of EIA mandates given our extraordinarily clean power supply and surplus annual hydro and nuclear- based energy position.
Surplus Energy and Market Sales
With respect to Benton PUD’s net annual surplus of energy, it is important to understand the timing of when most surplus hydro generation occurs. For Benton PUD, the best combination of market price and volume of surpluses occurs in January through March with the highest volume and lowest prices occurring in April and May. When our hydro supply exceeds customer demand, our BPA contract allows us to sell the surplus energy into wholesale electricity markets. The revenues generated by our sales have the effect of buying down our annual wholesale power costs.
Energy production from wind farms in the northwest can also be high during periods of maximum hydro generation contributing to energy gluts that can drive market prices to zero or even to negative values due to federal tax credits received by wind power. The wholesale electricity market distortions created by wind power tax credits combined with the availability of abundant and low-priced natural gas has driven market prices to very low levels in recent years. Consequently, the value of Benton PUD surplus hydro energy sales has been significantly reduced from over $50 million in 2008 to under $20 million today.
While there are efforts underway centered on possible expansion of the Western Energy Imbalance Market (EIM) to an extended day ahead market (EDAM) that could increase the economic value of BPA hydro flexibility and capacity, Benton PUD believes further development of wind power in existing “energy only” wholesale markets will continue to contribute to the devaluation of hydro. To be clear, Benton PUD believes abundant and low-cost natural gas has been the major driver of wholesale electricity price reductions but building more wind farms will contribute to downward pressure on prices.
Overall, the erosion of the market value of hydro energy has resulted in upward pressure on the prices BPA charges Benton PUD and consequently on the retail rates we charge our customers. Since 2007, BPA’s revenues derived from market sales have dropped from over $400 million to under $200 million in some years which leaves them looking to their ratepayers to make up the difference. Benton PUD’s net power supply costs are budgeted to be $84 million in 2020 which is up 40% since 2010 when actual costs were $60 million.
Oversupply and Curtailments
Additional concerns regarding the development of more wind power are oversupply and curtailments which are well described in a report developed by Harvard University for the Bonneville Power Administration in May 2018.
… As more intermittent renewable energy is added to the grid it creates oversupply, particularly during low demand hours, when generation exceeds load. Oversupply causes low or negative prices for wholesale energy during periods of overgeneration. When scheduled generation exceeds scheduled demand in the hour-ahead market, the price of energy falls below zero in an attempt to balance supply and demand. After accounting for changes in generation and load between the hour-ahead and real-time markets, if generation still exceeds load and there are no more generators willing to receive payments to reduce their output, then balancing authorities must order generators to curtail output to maintain system frequency. Negative bids often represent the lost opportunities for the generator to take advantage of tax credits for renewable energy production.
… Due to the Pacific Northwest’s reliance on hydroelectricity, oversupply becomes more problematic in the springtime when both river flows and wind generation are high. Under those circumstances, extra water can be spilled from the dams so that it does not contribute to oversupply, but too much spill exceeds water quality standards and can harm fish and other aquatic species. If water cannot be spilled, it must be passed through the hydropower turbines, thus generating electricity.
For conditions like these, BPA implemented the Oversupply Management Protocol, under which non-hydrogeneration is displaced to protect aquatic life and maintain system reliability. Displacement decisions are made according to a least-cost displacement cost curve that lists generation in order of cost, from the least cost facility to the highest-cost facility, until the required displacement quantity is achieved. After a federal court case concluded in 2011, BPA enacted a new protocol that compensated wind generators for lost revenues from curtailment and assigned the costs of curtailing generation during oversupply events to BPA transmission customers. (Patricia Florescu and Jack Pead, “Realizing the Value of Bonneville Power Administration’s Flexible Hydroelectric Assets”, Mossavar-Rahmani Center for Business & Government, Harvard University, May 2018)
While Oversupply Management Protocol costs have not been extremely high (BPA’s displacement costs of OMP were around $4.87 million in 2018 and $2.2 million in 2017 https://www.bpa.gov/Projects/Initiatives/Oversupply/Pages/Annual-Oversupply-Review.aspx) relative to other costs incurred by Benton PUD through our BPA transmission contract, we are concerned more wind power on the grid will contribute to increases in BPA costs and will add more complexity to the already difficult balancing act of managing river flows to meet the competing interests of power generation, environmental stewardship, barging operations, flood control and recreation.
Pacific Northwest Resource Adequacy Challenges
The Pacific Northwest’s clean hydroelectric generation resources are unmatched anywhere in the United States and are the primary reason Washington State contributed on average no more than 0.5% to the nation’s annual total greenhouse gas emissions from electricity production each year between 1980 and 2017 (U.S. Energy Information Administration, “State Carbon Dioxide Emissions Data” https://www.eia.gov/environment/emissions/state/); even with coal plants in the mix.
While our already clean electricity sector is the envy of the nation, policy makers in Washington State have set the course for 100% clean by 2045 through passage of the Clean Energy Transformation Act (CETA). While a long-term goal like this is clearly aspirational at this point, the near-term consequences of CETA’s underlying requirements are significant and very
concerning when it comes to maintaining power grid reliability. The most consequential requirements are the explicit removal of coal power from utility portfolios by 2025 and the “social cost of carbon” which must be used as a cost adder when utilities evaluate investments in new generation resources. As intended by legislators, this cost adder will have a chilling effect on investments to construct new natural-gas power plants which utilities would normally consider to be the logical replacement for dispatchable capacity associated with retiring coal plants.
Unfortunately, CETA along with other anti-fossil-fuel sentiment in Oregon and California energy policies has put northwest utilities in a position where it appears only wind and solar power along with batteries, pumped hydro and customer load curtailments (demand response) will be allowed to try and solve utility capacity deficits. The problem is that science, economics and project development cycle times indicate the politically preferred technologies are not ready to provide solutions at the scale needed to mitigate the already unacceptable increase in the risk of blackouts projected for the Pacific Northwest beginning in 2021 (Northwest Power and Conservation Council, “Pacific Northwest Power Supply Adequacy Assessment for 2024”: October 2019). In their most recent assessment, the Northwest Power and Conservation Council (NWPCC) estimates that accelerated coal-plant retirements could increase the likelihood that generating capacity will not be adequate for meeting demand to a level of 26% by 2026. This is well above the 5% threshold established as the limit for an adequate regional power supply.
Benton PUD is a relatively small player in the northwest grid, but our seasonal capacity deficits are significant. This is why we joined forces with other members of the Public Generating Pool (PGP) and several investor owned utilities to co-fund a study by E3 Consulting (Energy+Environmental Economics, “Resource Adequacy in the Pacific Northwest”: Public Generating Pool, March 2019) of what will be required to maintain power grid reliability in the Pacific Northwest while further de-carbonizing the electricity sector. This study found that deep de-carbonization is possible but that natural gas fired generation will be needed to maintain power grid reliability; it would just run infrequently.
While development of wind farms may be politically fashionable and appeal to many in the general public as a harmonization of nature with electricity production, the science and economics indicate powering modern civilization with intermittent generation resources like wind and solar power comes at a high financial and environmental cost. E3’s study concludes that increasing the Pacific Northwest’s inventory of wind power from the 2018 level of 7 gigawatts to a level of 38 gigawatts by 2050 (38 gigawatts of nameplate wind power capacity is what E3 determined would be required in an optimal scenario to reduce greenhouse gas emissions from electricity production by 80% below 1990 levels; an often-quoted goal from the Intergovernmental Panel on Climate Change (IPCC)) would only result in an effective capacity contribution from wind of 19%. In other words, a more than fivefold investment in wind power which E3 estimates would cover an area as much as 37 times the combined areas of Seattle and Portland, would only allow regional utilities to count on 19% of the capital investment to produce electricity when it is most critically needed. The E3 study also estimates the area required to achieve a theoretical 100% clean electricity sector in the northwest using only wind and solar power (assuming existing hydro and nuclear stay in place) would require a land area as much 100 times the combined areas of Seattle and Portland.
On November 12, 2019 Benton PUD Commissioners adopted Resolution 2523 in support of actions to ensure electric sector resource adequacy in the Pacific Northwest. This resolution provides a sound argument for why northwest utilities have serious concerns regarding the reliability of the northwest power grid and why Benton PUD questions the wisdom of continued development of large numbers of wind farms in our region when we are facing potentially serious consequences associated with power grid blackouts.
Other Considerations
The “fuel” for wind power is dilute and intermittent requiring additional investments in backup generation technologies to meet the always-on requirements of power grids. While developers and advocates often tout continued reductions in the cost of wind energy, the low availability of wind power requires utilities to continue paying for dispatchable generation capacity that may run infrequently but is sized to meet most of the peak energy demand on the grid. This “double paying” is why electricity rates in countries and states with high wind penetrations have risen significantly amid claims of low-cost renewable energy.
CETA together with the Energy Independence Act (EIA) appears to have established an undefined increase in Washington State’s renewable portfolio standard (RPS) which will undoubtedly lead to some level of double paying in Washington State. Establishing preferences for wind and solar energy with no accompanying targets for greenhouse gas (GHG) emission reductions in the electricity sector has been shown through comprehensive study to result in unnecessary increases in the cost of electricity while not reducing GHG emissions in the most cost-effective manner possible (Energy+Environmental Economics, “Pacific Northwest Low Carbon Scenario Analysis – Achieving Least-Cost Carbon Emissions Reductions in the Electricity Sector”: Public Generating Pool, December 2017).
Additionally, the land area required for wind turbine construction and transmission lines needed for grid interconnections can be immense and the negative ecological and environmental impacts of this “energy sprawl” may outweigh the perceived or real benefits. Benton PUD believes lifecycle economic and environmental impacts expected to result from further development of wind power need to be scrutinized to a much higher degree with greater recognition of issues like the global impacts of raw materials mining and the disposal of wind turbine blades which are currently destined for landfills.
Benton PUD acknowledges every source of energy production takes a toll on the environment but believes wind power is often given a pass due to its popularity with policy makers and many in the general public. One source estimates wind power requires about 30 to 45 times as much land to produce a comparable amount of power as nuclear and that concrete and steel requirements for wind are about 10 times greater (Robert Bryce, “Power Hungry – The Myths of “Green” Energy and the Real Fuels of the Future”: Pages 84, 91). We believe these are important and relevant considerations as investments are made in power generation projects that will have long lasting environmental and financial impacts.
Benton PUD supports provisions of CETA that count hydro and nuclear energy toward the 100% clean by 2045 objective. However, we believe a more cost-effective and potentially less risky trajectory toward this goal would have been to allow for the transition from coal to natural gas and to promote an increase in the development of nuclear energy as the best long-term and sustainable strategy. We believe it is reasonable to suggest the most balanced and environmentally responsible actions you can take to “clean up” the electricity sector is to produce as much low or non-emitting electricity as possible in the smallest area possible. This seems to be best accomplished with energy dense fuels like natural gas and uranium.
Benton PUD supports EN in their efforts to develop small modular reactor (SMR) technology. However, we are concerned continued large-scale investments in wind power will substantially increase the normally surplus annual energy supplies in the Pacific Northwest (PNW) thereby eroding the hourly energy supply opportunities needed by SMRs to achieve economic feasibility. According to the Bonneville Power Administration (BPA) (Bonneville Power Administration, “2018 Pacific Northwest Loads and Resources Study”: April 2019, Section 3) the generating potential from federal and non-federal hydro projects in the PNW can vary by almost 7,000 aMW annually and by almost 14,000 aMW in some months, depending on project operations and the availability of water. But even in the worst water years, the PNW region is projected to have annual firm energy surpluses for the next ten years, assuming the region’s 4,000 MW of uncommitted independent power producer (IPP) generation capacity is available to serve regional loads. Adding to this “long” regional energy position with continued development of large-scale wind farms does not bode well for the development of SMR based generating projects given their relatively high capital costs and the need for lots of run time in order to reduce energy production costs to levels that will make them competitive with other technologies.
Conclusions
It appears additional wind farm development in the Pacific Northwest (PNW) is gaining momentum and is a foregone conclusion in the minds of many legislators, members of the general public and even some utilities. Benton PUD believes it is reasonable to question whether continuing to favor investments in intermittent wind power and putting up roadblocks to the development of dispatchable natural-gas power plants is more about environmental virtue signaling than it is about serving the best interests of the citizens of Washington State.
There is no denying the fact that thanks to abundant PNW hydro energy, Washington State has historically been one of the lowest contributors to electricity sector greenhouse gas (GHG) emissions in the United States and that electricity sector contributions to total statewide GHG emissions have been only 16% to 19% (Department of Ecology State of Washington, “Washington State Greenhouse Gas Emissions Inventory: 1990- 2015 Report to the Legislature,”: December 2018, Publication 18-02-043, Pg. 6, Table 2), even with coal plants in the mix. Put another way, what urgent “dirty energy” problem are we attempting to solve through the aggressive timelines and technology restrictions of the Clean Energy Transformation Act (CETA) that is worth sacrificing vast amounts of our natural landscapes and risking blackouts that jeopardize the health, safety and wellbeing of northwest electricity customers?
While language exists within CETA requiring future reporting to the governor’s office to address concerns with power grid reliability, it appears legislators do not believe the risk of blackouts is real. If they did, they would accept the results of already existing utility studies and immediately begin to work on modifications to CETA to remove disincentivizes for the development of dispatchable natural gas plants needed for replacing retiring coal-plant capacity. So, at this point, investor owned utilities are announcing plans for new wind power projects to meet CETA deadlines, and along with all northwest utilities, are hoping the efforts of the Northwest Power Pool (NWPP) to develop power-generation resource adequacy standards can be completed and implemented in time to avoid blackouts (Northwest Power Pool Resource Adequacy: https://www.nwpp.org/about/workgroups/12).
Benton PUD strongly supports the efforts of the NWPP, but we do not support further development of wind power in the PNW. We believe continued investments in large-scale wind farm development in the PNW will: (1) contribute very little to keeping the regional power grid reliable and will not help Benton PUD solve our seasonal energy deficit problems; (2) contribute to the devaluation of hydro-generation assets and put upward pressure on retail rates Benton PUD and other utilities charge our customers; (3) risk underinvestment in needed dispatchable capacity today and future investments in visionary advancements in nuclear energy technology; (4) further sacrifice scenic hillsides, canyons and desert vistas in our region for little if any net environmental benefit.
Benton Public Utility District
Rick Dunn, General Manager
Commissioners: Barry Bush Jeff Hall Lori Sanders
July 14, 2020
Download original document: “Wind Power and Clean Energy Policy Perspectives”
Couple statements about reliability and cost
Author: Northern Indiana Public Service Company
Indiana Utility Regulatory Commission: Cause 45159 [link] —
Verified Direct Testimony of Andrew S. Campbell, Director of Regulatory Support & Planning, Northern Indiana Public Service Company (NIPSCO) [link]
Q18. How will reliability be maintained when the wind isn’t blowing?
A18. NIPSCO will continue to dispatch its steam and gas fleet and other available wind generation, as well as purchase power from MISO, to meet customer demand and reliability needs throughout the term of the Roaming Bison Wind Energy PPA. This ensures that when the wind is not blowing customers will continue to receive reliable service every hour of every day.
Verified Direct Testimony of Benjamin Felton, Senior Vice President, NIPSCO Electric [link]
Q23. Do reductions in the dispatch of NIPSCO’s coal units impact the cost to operate those units?
A23. Yes. NIPSCO’s coal units were engineered to be used as base load units that run consistently over long periods of time, and they were not designed to ramp up and down in response to short term market signals. As those units become less economical, the cost to operate them increases because in addition to the increased maintenance required of older units, the added expenses to ramp the units up and down are incurred more frequently. NIPSCO must remain mindful of how that added expense to customers balances against the impact on reliability. In spite of the cost control efforts NIPSCO has undertaken as I have referenced above, the operational characteristics of these plants dictate that some increases in costs cannot be avoided when the plants are operated outside of the parameters for which they were designed.
[This was the same Cause in which the Sierra Club asserted their interest, which was for an arm of the energy industry, not the environment: “Sierra Club seeks full intervention in order to ensure that its interests in lower cost and cleaner energy options are fully represented, and to bring to this proceeding its expertise in electric utility matters.” (link)]
