July 1, 2009

The Odd Couple: Renewables and Transmission

Martin Piszczalski, PhD

Moving from Market Pull to Product Push

Historically, load-serving entities (LSEs) dictated when, where, and how much new generation would be added. Their integrated resource plans (IRPs) determined the timing of plant additions, the fuel sources, and the location of the new generation resources. Transmission planners followed the lead of LSEs to route the necessary transmission capacity while also seeking to lessen area congestion, if necessary. Traditionally, new power generation resources — and, by extension, new transmission — responded to a market pull: predicted load demand. The role of the state and local governments was oversight, providing access to transmission, and setting rates.

In contrast, renewable mandates have upended the traditional approach to developing an IRP. Rather than anticipated customer demand driving generation and transmission decisions, government mandates are now in the driver’s seat. Twenty-nine states and the District of Columbia have a renewable portfolio standard that requires utilities in those states to supply some percentage of renewable electricity by a date certain.

For instance, the California Public Utility Commission (PUC) requires that 33% of that state’s power originate from renewable energy sources by 2020. In order to achieve this extraordinary goal, all new power generation procured by the state’s utilities must come from renewable energy sources. In this new world, the "pull" of market demand has been supplanted by a government-mandated "technology push" that determines which renewable developers pushing new power into the system in response to state-mandated levels of renewable power have access to limited transmission infrastructure.

One of the other challenges to building new transmission capacity to move renewable energy long distances that was discussed by Wellinghoff is identifying acceptable siting locations for renewable energy facilities. One important initiative toward this goal in the Western Interconnection (Figure 2) is the Western Governor’s Association’s (WGA) Western Renewable Energy Zones (WREZ) study. In the WREZ study — which covers 11 western states, two Canadian provinces, and areas of Mexico that are part of the Western Interconnection — as many as 50 zones with substantial renewable resources are in the process of being identified so that renewable projects can be expedited and transmission projects can be planned in advance (Figure 3).

2.    Power flow. Transmission of energy from renewable projects, from the plant to the load, should be invisible to grid users, regardless of which interconnection they are in. Source: U.S. Energy Information Administration



3.    Mapping renewable hubs. The most recent draft map from the Western Governor’s Association illustrates Qualified Resource Areas (QRAs) as those areas with a high density of developable renewable energy resources after screening for known technical and environmental limitations for which data are available. These data will be used to determine Western Renewable Energy Zones (WREZ) in the Western Interconnection. When the WREZ are determined, then an overall transmission plan, much like ERCOT’s, can be developed. Source: Western Governor’s Association

The ultimate goal of the WGA is to "develop 30,000 MW of clean and diversified energy by 2015." This work is in turn driving transmission planning. For instance, in California’s Renewable Energy Transmission Initiative, competitive renewable energy zones are being developed in "the most cost effective and environmentally benign manner."

The state with the largest installed wind power capacity has already identified Competitive Renewable Energy Zones (CREZ) within the Electric Reliability Council of Texas (ERCOT) Interconnection. In March, the Texas PUC assigned approximately $5 billion of transmission projects to be constructed in these CREZ that will eventually transmit 18,456 MW of wind power over more than 2,300 miles of new transmission lines from power-heavy West Texas and the Panhandle to highly populated metropolitan areas of the state. The regulatory body expects that the new lines will be in service within four or five years. The Texas PUC took about three years to select the most productive wind zones in the state, designate them as CREZ, and devise a transmission plan to move power generated from those zones to various populated areas in the state. Many of these new transmission projects will begin construction later this year.