Renewable energy developments in the Northwest may soon benefit from more flexibility in the transmission planning process.
The past several years have been marked by an increase of wind power developments, partially because of laws requiring utilities to add renewable energy to their portfolios. The Bonneville Power Administration, which controls three-quarters of the Northwest’s high-voltage transmission lines, has been working to figure out how to prepare for the new wind power.
But not all of the projects that generated transmission service requests on the BPA’s lines will come into fruition – a reality that the federal agency is now addressing in new ways.
The BPA in 2008 implemented a program to track interest in its transmission lines with a process called Network Open Season. When an energy company decides it wants to use the BPA’s transmission lines, it signs a Precedent Transmission Service Agreement and makes a financial commitment. Developers can enter into these agreements before, during or after their projects are constructed. They can defer transmission service for up to five years, but those agreements – to this point – cannot be modified or terminated.
Approximately 60 percent of the requests for transmission service since 2008 have come from wind developers – a total of 11,722 megawatts. The BPA responded by planning to add four major transmission lines to accommodate the potential energy developments.
But the complex planning process can require years for both the transmission lines and the wind developments, and in the meantime the economy has worsened, the queue for transmission service has lengthened and the renewable energy market has changed. Although developers signed the transmission service agreements and provided financial commitments when they requested service, BPA spokesman Doug Johnson said that some developers this past summer expressed uncertainty about going forward with their transmission requests as planned.
Confidentiality agreements prevented Johnson from sharing the names of those developers.
“We have been wondering how much wind in the back part of transmission service queue may or may not materialize,” he said. “We want to build the right project in the right place at the right time, and we need to know what the folks on the generation side are planning so we can come up with the right path forward.”
The four proposed transmission lines would cost the BPA a total of $787 million. After meeting with developers and other regional wind interests at the Northwest Wind Integration Forum in June, the BPA asked developers if they would be interested in terminating or modifying their transmission service agreements. In total, developers expressed concerns about 3,028 megawatts, and caused the agency to reconsider one of the four major transmission lines, as well as the terms of its contracts with developers in general.
“Given the current economic slowdown, it seemed prudent from both BPA’s and the wind developers’ perspectives to reanalyze the situation and consider whether or not to make that investment in specific transmission projects now or to wait and see how things change in the future,” said Cameron Yourkowski, senior policy manager of the Renewable Northwest Project.
The BPA in March announced that it would build the 40-mile Central Ferry-Lower Monumental line running through eastern Washington, but has slowed its construction plans. The $90 million project would provide 1,595 megawatts of new service, the vast majority to accommodate wind power. But the BPA decided not to move forward with preconstruction work based on its conversations with developers.
However, the BPA has moved forward with construction of the Big Eddy-Knight project, a $185 million, 28-mile line that will move electricity across the Cascade Mountains, from the west to the east.
“We had good certainty that all the revenue would materialize, and it made sense to build (the Big Eddy-Knight line),” Johnson said. “But we got some indications from customers with (service requests) related to the Central Ferry-Lower Monumental line that did not have as much certainty.”
Nevertheless, the BPA is bound to transmission service agreements with other developers. One, Puget Sound Energy, recently completed assembly of 149 turbines at the Lower Snake River wind farm near Walla Walla, Wash. The BPA built the Central Ferry substation to accommodate the wind farm, which is expected to come online in April 2012, but the specific line that will carry the generated power is not determined yet, according to PSE spokesman Roger Thompson.
“We are obviously interested in the Monumental line that is on the planning horizon for BPA,” he said.
The utility has a contract with the BPA that promises 250 megawatts of transmission capacity, although the project could generate up to 343 megawatts.
“They’ve expressed confidence that they’ll be able to provide the capacity we need,” Thompson said.
The BPA is analyzing customer feedback and developing new cost projections for each project, taking into account the potential terminations and modifications to developers’ service requests. The agency on Wednesday plans to release those assessments as well as refined principles of the Network Open Season process as a whole. Its goal is to complete the reform process by the end of the year.
“The (Network Open Season) policy is working well and I hope it will prove flexible enough to accommodate major changes in the economics of projects and the demand for energy in general,” Yourkowski said.
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