NREL Energy Analysis Forum
 Market Outlook for Wind
       James H. Caldwell Jr.
 American Wind Energy Association
         August 13, 2001
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   Wind Energy Projects, Nameplate MW Capacity
Region    On-Line   In-Development     Economic Potential
                                     @$2 gas       @$4gas
West       1800       3000           35,000       200,000

Midwest     610        700             400        350,000

East         35        225             500          7,000

Texas       200        900             --          40,000

South         2         20            100            600

Total       2647      4800           36,000       600,000
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                  What Wind Needs
–   Flexible near-real time scheduling
–   Penalty free imbalance settlement in liquid spot market
–   Long term non-firm transmission at volumetric pricing
–   Other market structure features common to needs of other
   • No pancaking
   • Robust secondary market in transmission rights
   • Network transmission access fees paid by load
– Robust regional least cost planning process
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                    Current Environment
• Rigid scheduling protocols with strong deviation penalties
• Imbalance settlements in dysfunctional “markets” or punitive cost
  based penalties
• Order 888 balkanization/pro-forma tariff as gospel
• Inflexibility of the “balanced schedule” and “firming services”
• Bias towards commodity strips and firm unit sales
• No short term transmission rights. No flexibility on partial resale
• No planning process
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• Real time (0-6 hrs): “smart persistence.”

• Near term (6-72 hrs): “smart climatology.”

• If forecast both of above with ~ 80% accuracy @ 95%
  confidence, then most of intermittency problem is
• Load shape issues remain.
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                      What wind wants
• Recognition as an economically viable generating resource with
  certain characteristics that need to be accommodated by the grid just
  like all other generation resources
• Quick, complete, universal implementation of FERC Order 2000
• RTO “Function 9” to offer tariffed imbalance service for as available
• Public support for coordinated output forecasting research and data
• Support for temporary exemptions/special treatment pending
  maturation of wholesale markets
• Support for least cost long term transmission planning
• Public financing of major regional transmission infrastructure
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          Specific Upcoming RTO Issues
• CA ISO Tariff Revisions – July 27 Board Meeting

• RTO West Imbalance penalties

• MISO Imbalance penalties

• BPA/WAPA concurrence

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