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BPA History with Geothermal in the Pacific NW, Transmission Issues

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Exploration drilling failed to locate a reservoir. Project relocated to Glass Mountain in 1996 ... to spend millions on exploration and permitting, only to have ... – PowerPoint PPT presentation

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Title: BPA History with Geothermal in the Pacific NW, Transmission Issues


1
BPA History with Geothermal in the Pacific NW,
Transmission Issues Project Selection
  • Introducing Geothermal Power Generation
    Workshop
  • John Pease PE, MBA
  • Project Manager, Renewables
  • Bonneville Power Administration
  • May 11, 2005

2
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3
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4
BPA Today Facilitator Role to Develop New
Renewables
  • History 2001 BPA increases wholesale price of
    power due to additional load placed on the Agency
    then Direct Service industries go out of
    business
  • BPA in surplus in to the future
  • Some customers want BPA out of resource
    acquisition the Regional Dialogue
  • BPA helps its customers who want to develop their
    own renewable resources today

5
BPA has a long history of promoting geothermal
  • BPA funded the1985 Four-State Study, which
    assessed geothermal resource development
    prospects in BPAs service area
  • NW Power Conservation Council in 1986 Power
    Plan determined that approx. 4,400 MW of cost
    effective electrical energy could be obtained by
    regional geothermal resource development

6
Geothermal Pilot Project Program Launched in 1991
  • Initiate small but commercial-scale projects in
    areas with potential for large-scale development
  • Test ability to locate reservoirs and win public
    acceptance
  • RFP initiated by BPA in July, 1991

7
Vale Geothermal Project
  • 30-MW project developed by BPA, Trans-Pacific and
    Springfield Utility Board
  • Exploration drilling failed to locate a reservoir
  • Project relocated to Glass Mountain in 1994

8
Newberry Geothermal Project
  • 30-MW project developed by BPA, CalEnergy and
    EWEB
  • Well-conceived, successful public involvement
    effort
  • Project approved in 1994
  • Exploration drilling failed to locate a reservoir
  • Project relocated to Glass Mountain in 1996

9
Pilot Project Locations
10
Activities in Support of Geothermal Development
  • From 1988-94, BPA spent over 1,000,000 on
    activities promoting geothermal
  • Economic impact studies in 5 counties
  • Hydrologic studies at 4 KGRAs
  • Impact analysis at 3 sites
  • Resource assessment in Cascades and SE Oregon
  • Environmental baseline at Newberry
  • Permitting guides
  • Geothermal teaching materials (see handout)
  • Outreach to public interest community

11
What Didnt Work the past
  • Federal regulations allow developers to spend
    millions on exploration and permitting, only to
    have their projects denied at the end
  • Federal permitting process allows special
    interest groups to have great influence on
    decision-making
  • This has changed under the current administration

12
What Worked
  • A well-planned and executed public involvement
    process can enhance the prospects for success
  • Power contracts are sufficient incentive to spur
    development at new sites

13
Challenges
  • No RPS in the Pacific NW geothermal must
    compete on its own economic merits
  • Conservative utility response Why it wont
    work. Perception can change with education
  • Transmission constraints solutions exist

14
Risk Mitigation Someone elses Problem?
  • Developers face a multitude of risks (ORMAT,
    4/2005)
  • Exploration
  • Resource capacity
  • Regulatory
  • Drilling
  • Plant construction
  • Financing
  • Risk eventually shows up in the PPA power price
  • Potentially jeopardizing project development
  • Partnership lowers the cost for everyone.

15
The Good News!
  • Least Cost Marginal Power for base load resources
    in the Pacific NW - 50 MWh and not going away
  • Risk Adjusted Avoided Cost methodology or How
    would you value a CCCT today?
  • Energy, capacity credit, green tags, fuel risk,
    environmental and societal cost/benefits compared
    to natural gas
  • Geothermal can now compete w/o PTC though PTC
    will help those who can use it (IOUs, IPPs,
    etc.)
  • Idaho Power IRP (2004) Geothermal 3rd out of 15
    alternatives for additional power (55/MWh
    levelized) ahead of gas coal

16
BPA Transmission
  • BPA Transmission 75 of high voltage in the
    Pacific NW
  • BPA building 770 miles of 500 kV circuits
    Largest transmission building program in North
    America
  • Yet, transmission system is over subscribed and
    underutilized. What does this mean?
  • Song You cant get there from here Lee Roy
    Parnel 1978 Country Classic

17
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18
BPA (FERC) Generation Interconnection Process
(gt20 MW)
  • Interconnection initiated by
  • Letter requesting generating interconnection to
    BPA transmission (TBL) see TBL website
  • Completed Interconnection Study Request
  • Identify service requested Network or Energy
  • Refundable deposit of 10k
  • Once complete, generator is now in the Queue
  • TBL transmission A/Es will help you

19
Once Interconnection Request Completed, Other
Studies Follow
  • Interconnection generator now responsible for
  • Interconnection Feasibility Study - 10k deposit
  • Interconnection System Impact Study - 50k
    deposit
  • Interconnection Facilities Study - 100k deposit
  • Standard Large Generator Agreement (gt20 MW) is
    signed if transmission is available
  • Process is now taking 2 Years

20
Once Interconnection Request - Continued
  • Studies may indicate Interconnecting generator
    may be blocked by someone higher in the Queue
    who needs, but does not have, transmission
    capacity
  • Consequently, upgrades then paid by pro rata need
    for the transmission, if the generators agree to
  • Paid back by transmission credits after
    construction approximately five years
  • Unfortunately, this process has never worked in
    eight years since FERC Order 888 889 created
    Open Access Transmission Tariff system (OATT)

21
Conditional Firm New (at least a little) Hope
On the Horizon
  • Access to transmission determined by Firm and
    non-Firm rights
  • Firm transmission guaranteed on all hours
    most expensive, curtailed last (usually in an
    emergency)
  • Non-Firm firm rights not used or unallocated
    transmission made available daily, weekly,
    monthly or annually (higher chance of curtailment
    daily goes first, then weekly, monthly etc.)
  • Conditional firm Firm except in months when
    curtailment may occur, then non-Firm, but
    curtailed last (non-firm curtailment order)

22
Conditional Firm A Little Hope - continued
  • Presented by BPA to FERC March 16th, 2005 in
    Portland
  • Conditional firm holder knows maximum curtailment
    exposure 100s hours/month
  • If not told in preschedule (24 hour notice) that
    a curtailment may occur, then considered firm
  • Uses additional Available Transmission Capacity
    (ATC) that currently goes unused
  • Bounds transmission availability risk to enable
    project financing!

23
Economic Redispatch A Little More Hope
  • Presented by BPA to FERC March 16th, 2005 in
    Portland
  • Transmission provider will adjust generation
    within the hour (TBL hydro) to alleviate a
    transmission curtailment, increasing available
    ATC
  • Currently being priced by BPA
  • Other generators may participate if an economic
    incentive is provided
  • BPA currently only redispatches to meet load

24
Accepting a Geothermal Proposal Suggested
Guidelines (BPA)
  • Project Summary size of facility (nameplate),
    type of technology, expected annual output, Point
    of Delivery, operation date, term of contract
    cost of power
  • Project Description where will it be located
    (map needed of key facilities), generation
    technology, who will manufacture major equipment,
    can project be expanded and transmission
    facilities required

25
Accepting a Geothermal Proposal Guidelines
(continued)
  • Site Control documentation of site control to
    include necessary access roads and transmission
    corridor easements (commercial terms blacked out)
  • Output Distribution estimate, in tabular form,
    of monthly and hourly project output. Describe
    source of the data
  • Equipment description of major equipment used
    at facility along with candidate manufacturers.
    Note Steel up 30 last year

26
Accepting a Geothermal Proposal Suggested
Guidelines (BPA)
  • 6. Transmission Availability Describe the
    degree to which transmission capacity is
    available. Description of transmission work done
    to date, when accepted into the evil queue, what
    transmission studies have been done, capacity
    reserved with copies of all documents.
  • 7. Environmental Review and Key Permits Fish
    Wildlife service up-to-date listing of candidate,
    listed and proposed endangered or threatened
    species habitat in the proximity of the project.
    Description of any potential environmental
    problems and the level of environmental review
    anticipated for the project. If potential
    opposition to the project, describe its source

27
Accepting a Geothermal Proposal Suggested
Guidelines (BPA)
  • 7. Environmental Review and Key Permits cont.
    Describe and provide copies of any wildlife or
    other environment studies related to the project
    area
  • Key permits required for the project
  • Progress made in obtaining them
  • Schedule for completing all Federal, state and
    country permitting processes that enable the
    project
  • 8. Describe any potential interest Native
    American tribes may have in the project, contacts
    that have been made and all archeological surveys
    that have been done on the project.

28
Accepting a Geothermal Proposal Suggested
Guidelines (BPA)
  • Schedule for permitting and construction of the
    facility
  • Cost proposal cost stream and if and how
    escalated (GDPIPD). Describe all contingent or
    key assumptions in the cost proposal.
  • Power Contract Description of key elements
    needed in a power purchase agreements,
    expectations of confidentiality and shared
    development costs
  • Project Structure and Financing Description of
    ownership structure, how the project will be
    financed. Will credit support or financing be
    needed from the utility?

29
Accepting a Geothermal Proposal Suggested
Guidelines (BPA)
  • Developer Experience summary of the experience
    of key staff and contractors who will be involved
    in developing the project.
  • Description of the plans for operating and
    maintaining the facility.
  • Other considerations developer considers
    important.

30
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