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New BPA Integration Services Mix Wind and Water

Rick Adair and Mark Ohrenschall
Con.Web, January 30, 2004

Advancing Wind Power

Bonneville Power Administration publicly unveiled in mid-January two new wind power integration services touted by the agency and others as a significant advance for intermittent wind energy.

A network wind integration service aimed at Northwest publicly owned utilities fills wind-generation gaps with hydropower; Cowlitz County PUD signed the first contract for this service for 2 megawatts from the Nine Canyon Wind Project.

Another new offering--intended for utilities outside BPA's control area, particularly investor-owned utilities--is a storage-and-shaping service that delivers flat power blocks a week after wind-generated electrons enter the Bonneville system.

For both, BPA takes in wind energy, delivers it when it's available and provides hydroelectric backup when it's not. The cost is 0.45 cents per kilowatt-hour for the network wind integration service and 0.6 cents/KWh for storage and shaping--both separate from energy and transmission charges.

"Integrating wind generation will be an important part of BPA's future strategy to encourage regional development of renewable energy resources," said administrator Steve Wright in a news release "It is yet another example of how the flexibility of the Northwest hydropower system provides value to the people of this region."

Rachel Shimshak of Renewable Northwest Project called the new services "a very positive development" for wind energy, as they address a reluctance by many utility officials to invest in intermittent wind because of uncertainties on how to integrate it into their systems.

"BPA's services eliminate this problem because they help wind 'walk like a duck and talk like a duck,'" Shimshak told Con.WEB.

The federal power marketing agency wants to provide wind integration services for up to 450 MW of wind capacity through 2011; at least 200 MW of that has been earmarked for public-power customers.

Wind Integration Services
The network wind integration service provides load-following for participating utilities, even when no power is generated by a wind resource. This offering is targeted primarily at publicly owned utilities with loads inside BPA's control area.

Cowlitz County PUD last year signed the first contract for BPA network wind integration service. It covers power delivered from the PUD's 2-MW share of Energy Northwest's Nine Canyon wind farm in southeastern Washington. Cowlitz started taking the power Dec. 31.

"From my perspective," said Cowlitz general manager Denny Robinson, "it's a good agreement. It brings the wind power into our system in a reasonable manner for a reasonable fee."

BPA's news release said the 0.45 cents/KWh fee "is designed to cover the costs of providing the service while keeping wind affordable."

The storage-and-shaping service takes wind project output and delivers an equivalent amount of energy a week later in flat blocks. This feature is "designed to serve the needs of utilities and other entities outside of the BPA Control Area who have chosen to purchase the output of a new wind resource but do not want to manage the hour-to-hour variability associated with the wind output," according to a BPA document.

It costs more than network wind integration because it involves transmitting power into and out of the Bonneville system, BPA's Cindy Custer told a Washington state legislative committee Jan. 21.

No utilities had signed up for storage/shaping as of late January, although investor-owned utilities are interested, said Elliot Mainzer, BPA manager for pricing and transaction analysis.

Costs for these services are in addition to transmission and wind energy prices. The latter runs approximately 3.5 cents/KWh, including the federal wind energy production tax credit, Mainzer said.

The week-long delay between taking in wind power and redelivering it in the storage-and-shaping service allows utility customers to eliminate the hour-to-hour uncertainty of wind generation. However, the delay could expose BPA to financial losses from sudden changes in power prices--a possibility that led to a cap on redelivered power of 50 percent of a wind resource's nameplate capacity.

"But the biggest single challenge in terms of transmission is getting the power into our system," Mainzer said. "This is nothing new, though--folks have grappled with it for some time. We're exploring a number of solutions on a transaction-by-transaction basis, because no two utilities have the same characteristics."

The program resembles services provided to BPA by PacifiCorp for Wyoming wind projects, and is comparable to a service BPA provides Portland General Electric for integrating output from the Vansycle Ridge Wind Farm in northeastern Oregon.

There are also similarities to PacifiCorp's integration of energy from the 41-MW-capacity Combine Hills wind farm, also in northeastern Oregon. "The product is a little different and the price slightly less" than BPA, according to renewable energy program manager Peter West of the Energy Trust of Oregon. He noted Combine Hills' output is absorbed within PacifiCorp's local distribution system, so there is no transmission element.

PPM Energy provides scheduling, forecasting, risk management and other products for its customers, including utilities buying wind power, spokeswoman Jan Johnson told Con.WEB. "We're very pleased that BPA is providing these services ... because they have unique capabilities with their hydro system to provide firming and shaping services for wind power. The Northwest has huge potential to grow wind power and multiple parties providing these types of services will facilitate the expected expansion of this renewable resource."

by Rick Adair and Mark Ohrenschall
New BPA Integration Services Mix Wind and Water
Con.Web - January 30, 2004

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