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VEC: Dairy Air Wind cost too high

HOLLAND – A senior engineer with Vermont Electric Cooperative says a single large turbine proposed for Dairy Air Farm will cost more than expected because of constraints on the regional electric grid and should be denied a state permit to operate.

The developer of Dairy Air Wind has filed a petition with the Vermont Public Utilities Commission for a certificate of public good for a 499-foottall wind turbine to be located about a mile from Holland’s elementary school.

Dairy Air Wind is the only large wind project in development to receive a long-term contract with Vermont in 2016 under the state’s renewable energy standard offer program.

The program guarantees that Vermont utilities will buy Dairy Air Wind’s electricity at a set rate. It also grants Dairy Air Wind a conditional waiver of certain criteria on the economic benefit to the state and Vermont’s future energy plan when under review by the commission.

Dairy Air Wind’s standard offer contract is based on a specially calculated cost cap of 11.6 cents per kilowatt hour.

Craig Kieny, senior power resources planner for VEC, said in his prepared testimony filed with the commission that the Dairy Air Wind turbine would exceed that cost cap by more than 2 cents, at 13.635 cents per kilowatt hour.

Because of that, Kieny said the commission should withdraw the standard offer contract from Dairy Air Wind and deny the project a certificate of public good.

In response, Dairy Air Wind officials have asked Kieny to further explain his arguments and are expected to file a rebuttal in the New Year.

Grid Constraints

Kieny points to the constraints affecting the Sheffield Highgate Export Interface (SHEI). This grid region extends from the Vermont/ New Hampshire border to Alburgh in northwestern Vermont, much of which is in VEC territory.

The primary electricity generation plants in this region are imports from Hydro-Quebec at the Highgate converter station, the 21 wind turbines in Lowell, 16 turbines in Sheffield, Sheldon Springs hydro, the methane power plant at the landfill in Coventry, the hydro plant on the Clyde River in Newport City, and numerous small hydro, solar and farm methane generators, Kieny states.

“This area is often export constrained,” Kieny says, when the electricity resources exceed the demand in the area and the transmission lines are not sufficient to transport the excess electricity without affecting the reliable operation of the grid.

Any new generation, like from a new turbine in Holland, can be expected to increase the constraints in the (SHEI).

The constraints have become more severe in the past year because the regional grid operator, ISO New England, changed a rule in May 2016 which counted the intermittent resources from the wind projects in the big picture, Kieny said.

All the larger electric generation plants are owned by or contract with Vermont utilities, so the impact of constraints affects rates, Kieny stated.

From Oct. 1, 2016 to Sept 30, 2017, the impact on VEC’s net power costs was an increase of $710,000, Kieny stated. He expects that other utilities buying or generating electricity in the region have comparable impacts.

“In effect, during periods of high local generation and/or low local electricity demand, the (Dairy Air) Project’s output will displace … some amount output from an existing energy source in the area,” he stated.

Nick Charyk, project spokesman for Dairy Air Wind, said “The SHEI transmission challenges that Craig Kieny details in his testimony to the PUC are part of a broader, ongoing regional issue” that has been known since 2013.

“Vermont’s utilities have been encouraging the growth of distributed generation and net-metering, however, they have not taken significant mitigating action,” Charyk stated.

Kieny said the state’s utilities, the state’s electricity transmission company and government officials are looking at the SHEI problem now. VEC officials have argued that VEC members should not bear the bulk of the cost to upgrade the grid in this area to allow the state to meet its renewable energy goals.

“Vermont’s goal of reaching 90 percent renewable energy by 2050 will require substantial new in-state electric generation to meet the demands of electrification,” Charyk stated.

“Dairy Air Wind is pleased that VEC and the state’s other utilities are now paying attention to SHEI. We believe Dairy Wind can be a part of the solution, and we look forward to working in collaboration with VEC and others to deliver a more stable energy future for Vermonters in the SHEI region and beyond.”