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					    Integrating Wind Power into the
         Electric Power System

Ed DeMeo                          Michael Milligan
Renewable Energy                  National Renewable Energy
Consulting Services, Inc.         Laboratory
Technical Advisor, Utility Wind   Consultant, National Wind
Integration Group                 Technology Center

        Michigan Public Service Commission Wind Forum
 April 25, 2007                            Lansing, Michigan

v Integration Issues and Wind         DeMeo
v Electric Utility Planning and       Milligan
  Operations: Wind Impacts Overview
v Wind Integration Perspective from   Milligan
  Around the Nation                   DeMeo
v Environmental Issues: Impact on     DeMeo
  Wind Economics and Integration
        Key Integration Issues

v Costs (capital, energy, O&M)

v Variability Impacts (ancillary services costs)

v Energy (fuel displacement) and Capacity
  (serving demand growth) Contributions

v Environmental Considerations
        Wind Energy Cost Trend
 1979: 40 cents/kWh

                  4 - 6 cents/kWh
                  (no subsidy)
• Increased
                                    NSP 107 MW Lake Benton wind farm
  Turbine Size                         4 cents/kWh (unsubsidized)
• R&D Advances
• Manufacturing               3 - 5 cents/kWh (no subsidy)
                              Today: Somewhat higher
• Operating                     increased commodity costs;
                                unstable market conditions
          Natural Gas Situation

“Today’s tight natural gas markets have
been a long time in coming, and distant
futures prices suggest that we are not apt
to return to earlier periods of relative
abundance and low prices anytime soon.”
  – Alan Greenspan, Federal Reserve Chairman,
    Testimony at Senate hearing, July 10, 2003

 Wellhead gas costs - 2002-2003: $3 - $5/MMBTU
 Current prices and projections exceed $6/MMBTU
                 Cost Comparison
v Wind total capital cost: about $1,600 kW today
v Wind energy cost: about 5.5¢/kWh (6.5¢ without PTC)
v Includes 0.5 to 1.0¢/kWh for O&M
v Wind energy costs are stable over plant lifetime

      Natural-gas plant fuel cost (HR 7,000 - 10,000)
$/MMBTU:     2        4         6          8        10        gas cost
¢/kWh:     1.4 - 2   2.8 - 4   4.2 - 6   5.6 - 8   7.0 - 10   fuel only
  v Wind-gas synergy: save gas when wind blows; burn
    gas to maintain system reliability during low winds
        Wind Variability Impacts

v To what extent is wind energy value
  reduced by increased operating costs for
  the rest of the power system?

v How is the power system’s ability to reliably
  meet load demands affected by wind-plant
  output uncertainties?
Time Frames of Wind Impact
  Match System Operation
              • Power systems can
                already handle
                tremendous variability
                 – Capacity value (planning):
                   based on reliability metric
                   (ELCC=effective load
                   carrying capability)
                 – Scheduling and
                   commitment of generating
                   units -- hours to several
                   days -- wind forecasting
                 – Load-following -- tens of
                   minutes to a few hours --
                   demand follows predictable
                   patterns, wind less so
                 – Regulation -- seconds to a
                   few minutes -- similar to
                   variations in customer
    Where Does Wind Data Come
• Meso-scale               Minnesota: Xcel
  modeling that can “re-
  create” the weather at                     Colorado: Xcel
  any space and time
• Model is run for the
  period of study and
  must match load time
• Wind plant output
  simulation and fit to
  actual production of
  existing plants
          How is Regulation Impact
• Based on actual high-
  frequency (fast) system load
  data and wind data
• If wind data not available,
  use NREL high-resolution
  wind production data
• Impact of the wind variability
  is then compared to the load
• Regulation cost impact of
  wind is based on physical        –Realistic calculation of
  impact and appropriate cost      wind plant output (linear
  of regulation (market or         scaling from single
  internally provided)             anemometer is incorrect)
                How is Load Following
                 Impact Calculated?
•   Based on actual system load
•   …and wind data from same time
     – Meteorological simulation to
       capture realistic wind profile,
       typically 10-minute periods and
       multiple simulated/actual
       measurement towers
     – Realistic calculation of wind
       plant output (linear scaling from
       single anemometer is incorrect)
•   Wind variability added to
    existing system variability
                                           Implies no one-one backup
                                           for wind
  How is Unit Commitment Impact
• Requires a realistic system simulation for at
  least one year (more is better)
• Compare system costs with and without wind
• Use load and wind forecasts in the simulation
• Separate the impacts of variability from the
  impacts of uncertainty
          How is Capacity Value
• Uses similar data set
  as unit commitment
   – Generation capacities,
     forced outage data
   – Hourly time-
     synchronized wind
   – Several years’ of data
• Reliability model used
  to assess ELCC
• Wind capacity value is
  the increased load that
  wind can support at the
  same annual reliability
  as the no-wind case
      High-Penetration Cases
• Minnesota PUC: 15-25% wind penetration (based on
  energy) (TRC)
• California Intermittency Analysis Project (Follow-on to
  earlier RPS Integration Study; team participation)
• Pacific Northwest: NW Wind Integration Action Plan
  (and Forum)
   – Idaho Power: about 30% (peak) (no TRC)
   – Avista: 30% peak (no TRC); some informal review at Utility
     Wind Integration Group (UWIG)
   – BPA: analytical work in progress; integration cost is
     consistent with others
   – Potential follow-on work to the NW Wind Integration Action
     Plan (NWIAP) on regional basis
   – Northwest Wind Integration Action Plan:
Renewable Energy Studies in
• RPS Integration Cost Analysis: NREL, ORNL,
  Dynamic Design Engineering, California Wind
  Energy Collaborative for the CA Energy
  – Used actual renewable generation, load, and
    conventional data from ISO Power Information
• GE/Exeter/Davis Intermittency Analysis
  Project for the Energy Commission
  – Analysis of future scenarios of renewable energy
• Both analyses looked at wind, solar,
  geothermal, and biomass
          CA RPS Integration Cost
     • Examining impacts of existing
        installed renewables (wind 4%
        on a capacity basis)
     • Calculated regulation, load
        following impacts of all
     • Capacity value (effective load
        carrying capability, ELCC) for all
     • Regulation cost for wind
     • Load following: minimal impact
     • Wind capacity credit 23%-25%
        of benchmark gas unit
  Regulation and Capacity
Value: RPS Integration Study
      California Intermittent Analysis
•   Up to 24% wind (ratedProject
  capacity to peak)
• Savings
    – WECC nearly $2B
    – CA $760M
• Wind forecast benefit
• Regulation cost up to
• Unit commitment
  w/forecast results in
  sufficient load following
  capability (and no load
  following cost)
Load Following Impacts in CA
• RPS Integration Cost Analysis found
  little discernable impact
  – Deep dispatch stack provided by market
• IAP found similar result
  – Deep CA dispatch stack, augmented by the
    Western electricity market
Factors that Influence Integration
  Costs: Results and Insights
• Wind penetration
• Balancing area (control area) size
    – Conventional generation mix (implication for higher
      penetration and new balance-of-system capabilities
    – Load aggregation benefits
• Wind resource geographic diversity
• Market-based or self-provided ancillary services
• Size/depth of interconnected electricity markets
• Unit commitment and scheduling costs tend to
• Realistic studies are data intensive and require
  sophisticated modeling of wind resource and power
  system operations
      Emerging Study/Methods
• Start by quantifying physical impacts
• Divide the impacts by time scale corresponding to
  grid operation cycles
• Analyze cost impact of wind in context of entire
  system in each time scale based on physical
   – Load variability
   – Wind variability
   – System operator must balance TOTAL of all loads and
     resources, not individuals
• Capture wind deployment scenario geographic
  diversity through synchronized weather simulation
• Re-create “real” wind forecasts
      Stakeholder Review
     Emerging Best Practices
• Technical review committee
  – Bring in at beginning of study
  – Discuss assumptions, processes,
    methods, data
• Periodic TRC meetings with
  advance material for review
• Examples in Minnesota,
  Colorado, California, New
  Mexico, and interest by other
          Minnesota 25% Wind Energy
        Penetration Study (MN DOC 2006)

v For 3500 to 5700 MW of wind generation
  delivered to MN load (15 to 25% of retail
  electric energy sales in 2020)
  § An increase of 12 to 20 MW of regulating capacity
  § No increase in contingency reserves
  § An increase of 5 to 12 MW in 5 minute variability
  § Incremental operating reserve costs of $0.11 per
    MWh of wind generation in the 20% case
            Minnesota 25% Wind Energy
          Penetration Study (MN DOC 2006)

v Bottom Line: The addition of wind generation to supply
  15, 20 and 25% of Minnesota retail electric energy sales
  can be reliably accommodated by the electric power
v The total integration operating cost for up to 25% wind
  energy is less than $4.50/MWh of wind generation.
  Key drivers are:
   § A geographically diverse wind scenario
   § The large energy market of the Midwest Independent System
     Operator (MISO)
   § Functional consolidation of balancing authorities
   § Sufficient transmission (i.e. minimal congestion)
               System Operating Costs Impacts:
              Results from Recent Studies ($/MWh)
               Penetra- Regula- Load-    Unit-  Total
Study           tion (%) tion   Follow   Commit Impact
UWIG/Xcel         3.5   0       0.41     1.44   1.85
Pacificorp        20    0       1.6      3.0    4.6
BPA/Hirst          7    0.19    0.28     1.40   1.87
We Energies       29    1.02    0.15     1.75   2.92
Xcel/PSCO         15    0.20    0        4.77   4.97
Xcel/MNDOC        15    0.23    0        4.37   4.60
MN/MNDOC          20     0.11   0        2.00   2.11
MN/MNDOC          34     0.23   0        4.18    4.41
     Range of System Operating Cost Impacts
                                    Studies Conducted To Date
 Integration Cost ($/MWh)

                                    1/2 ¢/kWh



                            0   5       10       15       20       25      30
                                Wind Penetration (% of System Peak Load)

All results to date fall within the crosshatched area
            GE Energy/NYISO/NYSERDA
             New York Wind Evaluation
v Comprehensive study of wind’s impacts on transmission
  system planning, reliability and operations
v 3,300 MW of wind in system serving 34,000 MW of
  customer load (10% wind penetration)
v Energy prices based on functioning commercial
  wholesale markets -- day-ahead and hour-ahead
   § All previous studies based on operating costs only
v Assumes wind is a price-taker
   § Market (demand-supply balance) sets price; wind
     generators are paid the market price
             GE Energy/NYISO/NYSERDA
              New York Wind Evaluation
v Overall Conclusion: NY State power system can
  reliably accommodate at least 10% wind (3,300 MW)
    § Minor adjustments to planning, operation and reliability
v Total NY system (less wind) variable operating costs (fuel,
  plant startup costs, etc.) reduced by $350 M
v State-of-the-art wind forecasting contributed $125 M of this
  reduction (about 80% of perfect-forecast value)
v Electricity costs reduced statewide (0.18¢/kWh -- all kWh)
v System transient stability improved
           Wind’s Contributions
            to Electric Power
Energy: displacement of fossil fuels
v In most cases, this is the primary motivation.
  Previously existing power plants run less, but
  continue to be available to ensure system reliability.
v Contrary to common lore, addition of a wind plant
  requires NO new conventional backup generation
  to maintain system reliability.
v In many cases, natural gas is saved, reducing total
  system operating costs. In all cases, overall
  emissions are reduced.
           Wind’s Contributions
            to Electric Power
Capacity: meeting new load growth
v Wind generally less effective in this respect than
  conventional generation. Winds may be low during
  peak electricity demand periods.
v But addition of a wind plant will allow some new load to
  be served. The amount depends on many factors.
              New York      about 10%
              Long Island   about 40%
              Minnesota     about 10%
v With experience and over time, operating strategies and
  generation mix will evolve so that combinations like
  wind, hydro and natural gas will serve new load reliably.
v IEEE Power Engineering
  Society Magazine,
v Utility Wind Integration
  Group (UWIG): Operating
  Impacts and Integration
  Studies User Group
v UWIG Summary:
  Key Points from IEEE
  Power Engineering
  Society Magazine,
  Nov/Dec 2005

We need to evaluate environmental
impacts on a relative basis.
No energy-generation approach is
without impacts.
The choice is wind vs. something --
not wind vs. nothing.
                     “We can’t lose sight of the larger
                     benefits of wind,” says Audubon
                     Washington’s Tim Cullinan. “The
                     direct environmental impacts of
                     wind get a lot of attention,
                     because there are dead bodies
                     on the ground. But nobody ever
                     finds the bodies of the birds
                     killed by global warming, or by
                     oil drilling on the North Slope of
                     Alaska. They’re out there, but
Audubon Magazine,
          Magazine   we don’t see them.”
September 2006
feature article on
wind power
              Benefits of Wind

v No emissions of any kind during operation
   § No SOx, NOx, particulates or mercury
   § No contributions to regional haze
   § No greenhouse gases
v No toxic wastes or health impacts
   § Nuclear waste transport and storage unresolved
   § Respiratory diseases of growing concern
v No water consumption or use during operation
   § Water availability a looming crisis in the Western US
              Benefits of Wind

v Global climate change concerns can no longer
  be ignored by any legitimate political entity
   § Most environmental scientists view this as by far the
     most serious environmental issue facing society
   § Unavoidable evidence mounting
   § Very few doubters remain
v Not many arrows in the quiver to address this
v We need them all
v Wind energy is one of them
 Paul Anderson, CEO of Duke Energy
  (Southeastern Utility, Coal/Nuclear)

Lobbying for tax on carbon dioxide emissions

“Personally, I feel the time has come to act -
to take steps as a nation to reduce the carbon
intensity of our economy. And it’s going to
take all of us to do it.”
  – Paul Anderson, quoted in AP press release, published April 7, 2005
                 Wind Contributions in Europe
                 and the United States (2006)

               Generation     Wind    Wind % of
               Total (MW)*    (MW)    Electricity

v Germany       85,000       22,000       7
v Spain         50,000       11,600       8
v Ireland         5,500        600        6
v Denmark         4,200       3,100      30
v USA          900,000       11,300       0.6

   * Approximate values
Contrasting Approaches to Accommodating
  Wind Power in Europe and in the U.S.
Europe     Wind power is environmentally preferred. How can
           we best accommodate it within the existing power

U.S.       OK, we’ll accept wind into the existing system, but it
           will follow our traditional rules and procedures.

  A change in mindset is needed in the U.S. It will not
come from within the power sector, whose responsibility
is reliability, not change. Change, and the incentives to
       enable it, must originate in the policy sector.
The Climate Change Threat Is A
  Major Business Opportunity
v Technologies to reduce CO2 emissions are
  needed worldwide
v Industries producing them will provide
  employment and profits
v Countries that produce them will enjoy export
  potential and trade-balance benefits
v Countries that do not may miss out on one of
  the 21st Century’s best business opportunities
           Bottom Line on
            Wind Power

Wind power is a very low carbon,
affordable, domestic energy source
It can make a large contribution to the US
economy -- 20% of electricity and more
As a responsible society, we need to use it
-- and use our ingenuity to resolve the
tactical issues it presents

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