Transmission and Renewable Energy in the West

1
Transmission and Renewable Energy in the West

• Kevin Porter
• Exeter Associates, Inc.
• Nevada RPS Workshop
• November 4, 2004
• Reno, Nevada

2
Transmission Situation in Nevada

• Both Nevada Power and Sierra Pacific have added
  to their transmission system
  
• New 345 kV Falcon-Gonder transmission line for
  Sierra Pacific in 2004
  
• Nevada Powers Centennial transmission project
• 3000 MW of transmission capacity from 500 kV, 230
  kV and 138 kV transmission lines
  
• Sierra Pacific and Nevada Power are not
  interconnected with each other
  
• Feasibility studied but economic benefits not
  significant enough to support a transmission line
  interconnecting the two utilities

3
Transmission Situation in Nevada (2)

• Significant impact on Nevada RPS
• Renewable resources more plentiful in Sierra
  Pacifics service territory
  
• Two utilities use renewable energy credit trading
  to comply with Nevada RPS
  
• Proposed 750-1,600 MW LS Energy coal plant could
  have impact
  
• Would require 500 kV line from Ely to north of
  Las Vegas
  
• Add 300 MW of import capability to Sierra Pacific
  and 300-500 MW for Nevada Power
  

4
Transmission Situation in Nevada (3)

• Significant part of Nevada served by rural
  electric cooperatives and other utilities
  
• Good renewable resources in these areas
• Transmission system undersized
• In-progress study, managed by Center for Resource
  Solutions, on AC Tap to Pacific DC Intertie for
  Renewables
  
• Could support 1,500 MW of renewable energy
• Potential costs significant
• 235 million for AC Tap
• 350 million for renewable energy collection
  system
  
• 454 million for Trans-Sierra line

5
Other Potential New Power Projects

• Sempra Energy 1,450 MW coal project (Granite
  Fox)
  
• Would interconnect with Pacific DC Intertie
• Also could potentially improve Sierra Pacifics
  import and export capability
  
• Barrick (115 MW gas) and Newmont (200 MW coal)
  gold mines have proposed power projects
  
• Concern that Sierra Pacifics transmission system
  may not be able to easily accommodate
  baseload/intermediate renewable resources such as
  geothermal

6
Questions to Consider

• Must a Coal Plant Be Built In Order for
  Transmission to be built?
  
• Are renewable energy generators too small and
  dispersed to participate in and finance a
  transmission line?
  
• Is political support for the Nevada RPS strong
  enough to justify a north-south transmission line
  that would wheel renewables in Sierra Pacifics
  service territory to Nevada Power?

7
Questions to Consider (2)

• How can renewable resources be accessed in areas
  not served by Sierra Pacific and Nevada Power?
  
• Should strict eligibility provisions for
  out-of-state renewables in Nevada RPS be relaxed?

8
Integration of Renewables

• Sierra Pacific wind limit of 50 MW per site
• Utility concern whether generating resources can
  ramp up and down quickly enough to match winds
  variability
  
• Would consider larger wind projects if dynamic
  scheduling is provided
  
• Feasibility of combining community wind projects
  with hydro
  
• Concern that additional baseload resources on
  Sierra Pacifics system may foreclose geothermal
  

9
Flexible Firm Transmission Service

• Discussed in Rocky Mountain Transmission Area
  Study (RMATS)
  
• Based on evidence that while transfer capability
  fully reserved, actual congestion only occurs a
  small number of hours per year
  
• Idea still in conceptual stagetariff provisions
  still to be defined
  
• Could this help wind and geothermal in Nevada?

10
National Regulatory Developments

• Regional transmission organization (RTO)
  development has slowed, as has FERC initiatives
  to make wholesale markets more competitive
  
• New Generator Interconnection Rules in the Works
• FERC Order 2003 for Generators 20 MW and Above
• On appeal
• New interconnection provisions pending for wind
  generators
  
• Settlement negotiations on Generators Below 20
  MW
  
• FERC Dec. 1st Wind Technical Conference

11
RTO Activities by Nevada Utilities

• Both Nevada Power and Sierra Pacific involved in
  formation of Grid West (successor to RTO West)
  
• Staged implementationinitial phases would not
  likely meet FERC RTO requirements in Order 2000
  
• Successive phases would require regional
  consultation and voting by regional stakeholder
  committee and Grid West Board of Directors
  
• Planning of WestConnect RTO
• Nevada PUC docket to consider RTO options for
  Nevada Power
  

12
Options to Consider (In No Order)

• Consider state bonding authority for transmission
  (such as the Wyoming Infrastructure Authority)
  
• Require, as a permit condition for proposed
  fossil-fueled plants, that some of any necessary
  transmission be set aside for renewable energy
  
• Encourage, through regulatory or tax incentives,
  a north-south transmission line to connect Sierra
  Pacific and Nevada Power, and require a set-aside
  for renewable energy

13
Options to Consider (In No Order), cont.

• Require Sierra Pacific and Nevada Power to
  construct a north-south transmission line and
  authorize recovery through rates
  
• Consider the potential of long-proposed
  transmission lines (e.g., the Southwest Intertie)
  to move coal generation from Wyoming to
  California, and whether renewable energy could be
  transmitted over such a line

14
Options to Consider (In No Order), cont.

• Have renewable energy generators engage in
  proactive transmission planning with Sierra
  Pacific and Nevada Power to determine how to
  transmit renewable energy in Nevada, and evaluate
  how it is paid for
• Explore whether more distributed generation in
  Nevada could alleviate transmission constraints
  or free up transmission capacity for renewable
  energy

15
Options to Consider (In No Order), cont.

• Relax in-state restrictions in Nevada RPS to
  allow out-of-state renewables to be wheeled into
  Nevada
  
• Consider whether joining a RTO could help
  renewable energy generators in Nevada, and if so,
  whether Grid West or West Connect is preferable
  
• Investigate whether transmission availability for
  baseload or intermediate renewable energy
  resources could be an issue if proposed coal or
  natural gas plants are constructed

16
Options to Consider (In No Order), cont.

• Research and recommend how to raise or eliminate
  Sierra Pacifics 50 MW limit on wind per wind
  site
  
• Explore whether renewable energy can be
  dynamically scheduled with neighboring control
  areas
  

17
Options to Consider (In No Order), cont.

• Encourage Sierra Pacific and Nevada Power to
  waive any energy imbalance penalties in the open
  access transmission tariffs for intermittent
  resources such as wind, solar, or
  run-of-the-river hydro
• Determine whether existing transmission can be
  more fully utilized through new transmission
  service such as flexible firm service
  

18
Options to Consider (In No Order), cont.

• Consider whether wind projects, particularly
  smaller community wind projects, could be built
  and operated in conjunction with hydro facilities
  maintained by power marketing administrations
  such as the Western Area Power Administration