Comments on: Economics for Tres Amigas

By: Market designs for Tres Amigas: How about trilateral market coupling? « Knowledge Problem

Wed, 21 Oct 2009 12:23:27 +0000

[...] More thoughts on economic issues related to the Tres Amigas project, an ambitious proposal to connect the Western, Eastern, and Texas electric grids via a three-way high tech transmission link located in eastern New Mexico. (Earlier: Tres Amigas intro and Economics for …). [...]

By: bartman

bartman — Tue, 20 Oct 2009 14:47:43 +0000

Doug:

PJM didn’t explicitly price marginal losses when AEP and ComEd joined, but they do now – they have done so since May 2007. Marginal losses usually result in about a $2-3 discount for ComEd generators, not enough to change their commitment decisions, because the ComEd plants have several advantages – lots of nukes, low-priced PRB cioal and cheaper gas than the rest of PJM.

By: External costs of energy production, auditing the Energy Star program, and more « Knowledge Problem

Tue, 20 Oct 2009 13:25:57 +0000

[...] I just noticed that they also linked to my post on the Economics of Tres Amigas. Wow, they really are good at finding the best [...]

By: Michael Giberson

Michael Giberson — Tue, 20 Oct 2009 03:23:46 +0000

With respect to transmission enhancements within the region, one news story pointed out that Sharyland Transmission is interested in possibly partnering. Since Sharyland is the company currently planning the CREZ line buildout that will come closest to the Tres Amigas planned location, presumably the relevant possibilities are under consideration.

The SPP EHV transmission plans also currently link up near to the proposed Tres Amigas location, and since they are in an even earlier planning stage they could be bent to match up. Obviously coordinating these four parts – transmission enhancements in each of the three regions and the construction of the three-way interconnector will be less than perfect, so the project will probably limp before it runs.

I’ve not followed Western Interconnection transmission planning efforts much, but certainly folks there are talking about accommodating renewable power development around the region as well.

By: D.O.U.G.

D.O.U.G. — Mon, 19 Oct 2009 20:49:06 +0000

For such a link to be anything other than small might require significant transmission enhancements inside the regions to deal with the changes in flows. Remember that there are great distances involved and little population at interconnection boundaries. Connecting west and east either connects exporting supply regions or connects nowhere to nowhere. Many systems have yet to recognize (in price) the effects of losses at the margin. (This may have had something to do with the changed flows west-to-east when ComEd joined no-losses PJM. It’s not clear that the added flows were really economic.) This is especially true in the West where lines are long and are already heavily loaded.

By: bartman

bartman — Sun, 18 Oct 2009 15:35:36 +0000

I had similar thought when I first read of this project. If you don’t have a unified dispatch, greater inter-tie capacity doesn’t get you much. For example, when PJM expanded to include AEP and ComEd, a massive amount of previously undispatched cheap coal and nuke power started to flow east. Nothing physical changed on the ground, just the common dispatch algorithm. Also, the inter-tie capacity between Carolinas/TVA and PJM is very large, but utilized hardly at all.

The only way the project works is if there are large price discontinuities between the three interconnects, but to capture those opportunities, the builder of the link has to also be a power trader or wheeler, which brings in a whole new level of risk.