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New rule could lead to more wind energy curtailment in Midwest

New market rules that take effect next week in Southwest Power Pool’s (SPP) footprint figure to significantly impact new wind farms being placed in service.

On Sept. 20, the Federal Energy Regulatory Commission (FERC) conditionally approved how SPP characterizes resources as eligible for curtailment. For wind power, the most important aspect of the new rule is how the system operator views non-dispatchable resources, which include wind energy.

Under the current market rules, existing non-dispatchable resources – including wind energy – are the last to be curtailed. However, under the new rule, wind projects placed in service after Oct. 15 will no longer be afforded that benefit and could be curtailed as early as natural-gas and coal-fired generation, according to Steve Gaw, a consultant with the Wind Coalition.

Rules for existing resources – including for wind farms that were placed in service before Oct. 15 – will be determined in the stakeholder process, subject to FERC review.

Curtailment is dependent on the mode of transmission service used by a generator, explains SPP spokesperson Pete Hoelscher. In SPP’s footprint, there are two modes of transmission: firm and non-firm. Firm transmission service always has priority over non-firm transmission service and includes native load customers and network customers.

Non-firm transmission service is reserved and/or scheduled on an as-available basis. It is subject to curtailment or interruption at a lesser priority compared to firm transmission service, Hoelscher says.

The new rules figure to greatly impact dozens of new wind farms that are expected to come online before the end of the year in time to meet the production tax credit in-service deadline.

According to Hoelscher, the modifications to SPP’s curtailment procedures will help the system operator reduce the magnitude of curtailments.

Grid modernization

For its part, SPP maintains that the changes are sorely needed to protect grid reliability both now and in the future. SPP forecasts an additional 4 GW of non-dispatchable resources will come onto the system in the next three years.

The SPP system is plagued by severe congestion in several parts of its footprint – most notably, in eastern Kansas. In fact, the bottlenecks in Kansas are so severe that one landowner, who requested to remain anonymous, insists that the SPP curtailments are already under way.

However, SPP maintains that wind farms that are already operating will not be affected by the new rules. SPP is also working to build additional transmission in the region, with over $7 billion under construction or contracted to begin construction.

In addition to its plan to apply curtailments more broadly, SPP is preparing to transition to a day-ahead market beginning in 2014, bringing technology and services up-to-date.

“Generally, a day-ahead and ancillary-services market, coupled with a consolidation of the many balkanized and inefficient balancing authorities, will result in a more cost-effective system, where dispatch is done on an economic basis,” Gaw notes. “Being a very economical resource, the more modern market structure benefits wind generation.”

Gaw adds that it is important for system operators to understand that wind generation technology is quickly evolving, and that some of the newer generators are capable of providing services that would have not been possible just a few years ago.

He says that many of today’s modern wind turbines have moved beyond some of the grid compatibility issues formerly associated with earlier turbine technology. In fact, technology will continue to advance and continue to narrow gaps in compatibility.

“There is frequently a tendency to treat all wind turbines alike, regardless of the technology available when they were placed in service,” Gaw says, adding that sometimes, regulators falsely assume that all wind turbines perform equally.

“The good news is that wind energy will eventually benefit from more transmission and the fact that SPP will be going to a new market structure,” he concludes.