Posts Tagged ‘transmission’

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Tres Amigas gets half a loaf from FERC, tips on gaining other half

March 22, 2010

Michael Giberson

On March 18, the Federal Energy Regulatory Commission acted on the Tres Amigas project’s two regulatory requests submitted last October.  Tres Amigas has proposed to link the large scale power interconnections covering the eastern and western halves of the United States with the ERCOT interconnection in Texas.  The New Mexico-based project would facilitate trading power among the interconnections and aid development of electric power generation resources in all three areas.

In docket ER10-396-000, FERC granted the project’s request for negotiated rate authority subject to conditions intended “to ensure that the goals of open access are protected and that rates for transmission service on the Project remain just and reasonable by limiting Applicant’s ability to withhold the Project’s capacity from the market.”  Haven’t read the order yet, but when I have the chance I’ll let you know if I see something interesting.

In docket EL10-22-000, Tres Amigas requested the Commission agree not to assume federal jurisdiction over the parts of the ERCOT interconnection currently regulated by Texas just because the Tres Amigas project would allow ERCOT market participants to join in interstate commerce.  FERC concluded that the information submitted by Tres Amigas did not warrant a blanket disclaimer of jurisdiction and so denied the request. However, the Commission offered suggestions on how Tres Amigas may go about securing the jurisdictional assurance it wants without the Commission implicitly endorsing the various justifications the project offered in the company’s filing.

MORE: The FERC press release contains more information, and see Chairman Jon Wellinghoff’s statement, Commission Marc Spitzer’s statement, and Commissioner John Norris’s statement.  Mostly these statements say: we like innovative transmission infrastructure projects like this one, we support them as we can, we couldn’t quite swallow the jurisdictional request as presented, but that doesn’t mean we don’t like these kinds of projects.

The Wall Street Journal summarized the ruling, “Power Grid Connection Wins First Approval.” Bloomberg reports, “FERC Slows Tres Amigas Plan to Link U.S. Power Grids.”

Posted in Electricity, Energy markets | Tagged , | Comments Off

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In dreams begin responsibilities: European electric grid expansion version

March 8, 2010

Michael Giberson

Today ten companies announce “Friends of the Supergrid,” a group dedicated to promoting policy support for a massive power grid to link offshore wind resource areas to European power markets. The project would also enhance the ability to trade power between regions. The group complements the “North Seas Countries’ Offshore Grid Initiative” announced in December 2009, but appears to have a somewhat broader scope.

Since I’m more focused on U.S. policy and markets, I’m not sure how these developments relate to two other very large scale transmission projects proposed for Europe, the SuperSmart Grid and the Desertec concept.

All of these project announcements represent pretty large scale dreams, but typically they are short on the responsibilities side of thing. Who’ll pay for a project that the Financial Times suggests may cost hundreds of billions of Euros?

The United States faces similar issues. Dreams of significant electric power generation from renewable sources appeal to many people (see also EWITS), but who wants the responsibility of paying for the needed transmission enhancements? That part of the dream remains a bit fuzzy. Hoping to help develop policy is the newly formed Coalition for Fair Transmission Policy, a group of mostly East Coast utilities that mostly don’t want to pay a lot to bring wind power resources in the central U.S. to their regions.

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Inside the ERCOT control center

February 23, 2010

Michael Giberson

David Wagman, chief editor of Power Engineering magazine, toured the Electric Reliability Council of Texas’ primary control center in Taylor, Texas as part of a group attending the Renewable Energy World Conference in Austin.  If you wonder what ERCOT’s control center is like:

Inside the control room, the most striking feature is the lack of noise. The room, which must be 50 by 50 with a 35-foot ceiling, is library quiet. And that’s the way they like it, Joel Mickey told me in a video interview I filmed with him and which will be on this web site in the near future. Anything else suggests a system that’s out of balance or with a problem. Eight people work in the control room, responsible for everything from day-ahead forecasting to on-the-spot transmission balancing. Each has a bank on consoles.

The front wall consists of a massive projection screen with perhaps a dozen displays showing the grid and various real time operating conditions. Two digital displays at either side of the room report the current load, the time and the system’s cycle. Those numbers in particular move up and down within a narrow range around 60 cycles. Every four seconds the control center pulses commands to generating units around the state, commanding changes in generating output up or down to keep 60 cycles in the center of the target.

More at the link, including some description on how wind power is changing the system operator’s job.

(HT to the Caprock Plains Wind Energy Association.)

Posted in Electricity, Miscellany | Tagged , , | 2 Comments »

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Integrating variable energy resources to the electric power grid

January 26, 2010

Michael Giberson

Are their barriers impeding integration of variable energy resources to the electric grid? FERC wants to know:

The Federal Energy Regulatory Commission (Commission) seeks comment on the extent to which barriers may exist that impede the reliable and efficient integration of variable energy resources (VERs) into the electric grid, and whether reforms are needed to eliminate those barriers. In order to meet the challenges posed by the integration of increasing numbers of VERs, ensure that jurisdictional rates are just and reasonable, eliminate impediments to open access transmission service for all resources, facilitate the efficient development of infrastructure, and ensure that the reliability of the grid is maintained, the Commission seeks to explore whether reforms are necessary to ensure that wholesale electricity tariffs are just, reasonable and not unduly discriminatory. This Notice will enable the Commission to determine whether wholesale electricity tariff reforms are necessary.

Hmmm, “variable energy resources”?  Does that mean things like steam generation units that can be adjusted up and down over some range (but not things like a gas turbine that is either on or off, but not adjustable in between)? No, they mean “variable but not very controllable energy resources” such as wind and solar power.  They write: “For purposes of this proceeding, the term variable energy resource (VER) refers to renewable energy resources that are characterized by variability in the fuel source that is beyond the control of the resource operator.”

I wonder why they didn’t just use the term “renewable energy resources”? Were they afraid of offending hydro and geothermal interests?  Are they hoping to ease the taint of not-very-controllable from renewable energy resources?

The proceeding is “Integration of Variable Energy Resources” (FERC RM10-11-000). In paragraph 10, FERC states:

Our goal is not to adopt rules that favor one type of supply source over another. Instead, the Commission’s purpose in this proceeding is to investigate market and operational reforms necessary to achieve two goals: first, to ensure that rates for jurisdictional service are just and reasonable, reflecting the implementation of practices that increase the efficiency of providing service; and second, to prevent VERs from facing undue discrimination. These goals are consistent with the requirements of sections 205 and 206 of the FPA.

The challenge here is in separating the “due discrimination” from the “undue discrimination,” which is to say the charges and special terms and conditions applied to VERs that are reasonable given the character of the resource from the charges, terms and conditions which are unreasonable.

Posted in Electricity, Energy markets, Environmental policy | Tagged , , , , | 2 Comments »

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Texas and the Tres Amigas interconnection

January 13, 2010

Michael Giberson

Over the holiday NYTimes.com posted a story by ClimateWire reporter Peter Behr that does a pretty good job of describing the proposed Tres Amigas project (proposing to link the three main electric regions in the U.S. – Eastern, Western, and Texas) and surrounding issues.  Among other things, the story provides a good short summary of the Federal/Texas jurisdictional relationship, which stands as one challenge to success:

The developers have also asked FERC for a second ruling disclaiming jurisdiction over transmission providers that tie into the Tres Amigas lines and in effect, to maintain Texas’ jurisdictional independence. “Clearly, if we don’t the jurisdiction disclaimer, I can’t imagine how we get support for this in Texas,” [Tres Amigas attorney David] Raskin says.

Echoing the state’s Alamo heritage and a tenacious attachment to its independence, Texas’ largest utilities cut their power line connections with other states in 1935, after passage of the Federal Power Act in the New Deal, to keep Washington from asserting jurisdiction over their operations. (Texas had no state regulation of utilities before the 1970s, notes Judge Richard Cudahy of the 7th U.S. Circuit Court of Appeals).

In one famous showdown, a Texas utility — Central and Southwest Corp. — did create a transmission link between its divisions in Texas and Oklahoma to preserve its status as an interstate electric power holding company. At night on May 4, 1976, a technician opened a switch at a CSW substation sending power surreptitiously from Vernon, Texas to Altus, Okla., according to Cudahy’s account of the “midnight connection.”

Since Texas’ other major utilities were linked to CSW, their power was also flowing in interstate commerce. Several hours later, Texas utilities were informed of these events, and two of the largest responded in outrage by severing their transmission ties to CSW, at some risk to the state’s entire grid.

The Tres Amigas petition to FERC says that because energy is converted from an AC wave to a DC electronic pulse and then back into an AC wave synchronized with the receiving grid, the electrons in Texas are not “free flowing” into New Mexico or Oklahoma, preserving Texas’ separation.

The Tres Amigas jurisdictional request submitted to FERC offers more detail (FERC docket number EL10-22-000) and for further background I’d recommend the chapter on the subject by Darren Bush and David Spence in Electric Restructuring: The Texas Story (the book recently published by AEI Press edited by Lynne and Andy Kleit).

Posted in Electricity, Energy markets | Tagged , , , , | 1 Comment »

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The Benefits of the proposed Tres Amigas interconnection

December 10, 2009

Michael Giberson

Both of the Tres Amigas filings at FERC (see background) provide summaries of the anticipated benefits of the proposed interconnection between the Eastern, Western, and ERCOT interconnections.  Each of the five kinds of benefits listed below seem plausible to me.  While estimating the size of the benefits would require a lot of hard work, given the scale of the project and other generation and transmission projects under consideration for the surrounding area, it seems likely that the benefits will be substantial.

To a degree, of course, the investors in Tres Amigas hope that the project will capture some of the value created in the form of profits.  But to a degree such a project should inherently produce spillover benefits in the form of more efficient energy generation and lower cost provision of reliability services.  (A recent working paper discussing the economic effects of the NorNed interconnection suggests that in the NorNed case the interconnection produced mostly private benefits to the investors. I think there is reason to believe that the Tres Amigas case is different, but the point is worth further examination.)

Here is the version of “The Benefits of Tres Amigas” section appearing in the jurisdictional filing (the version in the transmission rate filing is essentially the same; emphasis added):

Tres Amigas will advance the public interest in several important ways. First, a new power marketing hub will be created in proximity to large amounts of existing and potential renewable generation, providing the developers of renewable (and other) generation expanded markets in which to sell their power. Tres Amigas will permit renewable generation being developed in each of the Eastern Interconnection, ERCOT and WECC to be delivered to markets that are currently only minimally accessible. This will enhance the value of new generation, creating additional incentives for its development. This benefit is particularly important because Tres Amigas will be located adjacent to areas of the country that have been identified as among the most promising from the standpoint of developing renewable wind, solar and geothermal power.

Second, marginal prices for energy in the three interconnections, which typically diverge because the markets are electrically separated, will move closer together, allowing electricity to be produced more efficiently and saving electric consumers large amounts of money. For example, the Petitioner’s studies show that marginal energy prices vary significantly between the Southwest Power Pool (in the Eastern Interconnection), ERCOT and the WECC at this time. Our studies show that energy prices vary by more than $50 per MwH in over 2,000 hours per year between the CAISO and ERCOT, over 1,600 hours per year between ERCOT and the Palo Verde hub, over approximately 1,500 hours per year between SPP and the CAISO, and over approximately 800 hours per year between ERCOT and the SPP. Accordingly, significant opportunities exist to produce power more efficiently.

Third, opportunities will exist to “firm up” intermittent and variable renewable energy by taking advantage of geographical diversity and onsite battery technology at Tres Amigas. Studies have shown that the quality of intermittent and variable renewable energy can be enhanced by aggregating sources from geographic locations that may experience high winds or sunshine at different times. In addition, Tres Amigas will expand the geographic reach of markets generally, offering additional opportunities to take advantage of load and resource diversity.

Fourth, the value of transmission investments made in the regions around Tres Amigas will be enhanced by allowing power to move more freely between the interconnections. Tres Amigas will permit power to move to and from different markets, expanding the potential use of the existing transmission grid and expansions thereto. Tres Amigas should provide system planners new opportunities to improve the efficiency and reliability of the electric system at a lower overall cost.

Fifth, electric system reliability in the area around Tres Amigas will be improved because Tres Amigas will connect the three asynchronous grids at a robust station with back-up power and voltage source converter technology that will provide substantial reactive power to the transmission system in each of the interconnections. This is particularly important because Tres Amigas will be located in a remote area, where a strong source of reactive power is necessary to support both new transmission and new renewable generation. Tres Amigas will allow more renewable generation to be interconnected in this important region and reduce the investment cost associated with transmission development in the area.

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Tres Amigas project discussed on public radio show

November 20, 2009

Michael Giberson

My most recent 15 seconds of fame*: The Environment Report: The ‘Tres Amigas’ Project. (Or, if you prefer, you can listen to today’s full 4:00 minute news segment.)

In the segment I make the outrageous claim** that the project is located in an area where many renewable power resources will be built.  The Environment Report is public radio news service focused on environment issues, they were interested in Tres Amigas transmission project because it is promoted as a “renewable energy hub.”***

 

*Actually, my part is slightly less than 15 seconds, closer to 12, but fame is generally parceled out in 15-unit intervals and I want it all.  The Tres Amigas segment is about a minute long.

**Actually, I make the relatively obvious observation described, but I’m trying to develop a reputation for outrageous claims in case, later, I want a job hosting a cable news program.

***For more substance on the Tres Amigas project, read the USA Today story, try my guest post at Alt Energy Stocks or see the earlier posts here at KP on the topic.

Posted in Electricity | Tagged , | 2 Comments »

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Long-distance transmission complements “local self reliance”

November 18, 2009

Michael Giberson

A few weeks ago we mentioned commentary by John Harrell of the Institute for Local Self Reliance asserting that the “last thing renewable energy needs right now are new transmission lines.”  The ILSR has a recent study suggesting the almost every state could be energy self sufficient relying only on in-state renewable power sources.  I remarked, “While I agree that ‘local self-reliance’ in energy may be possible, I don’t think most people are willing to pay the price of such extreme energy independence.”

Comes now Tom Konrad at the Clean Energy Wonk blog who takes a long hard look at the price of local renewable energy self-reliance as conceived of by the ILSR.  The short version of Konrad’s assessment is that (1) the high levels of renewable power proposed will require support from substantial quantities of relatively expensive energy storage, and (2) that transmission can reduce the amount of storage needed.  Those two points, combined with reasonable estimates of the costs of transmission and storage,  reveals that the energy storage + long-distance transmission approach dramatically reduces the cost of pursuing widespread renewable power deployment. (The full version of Konrad’s assessment provides a more complete takedown of the ILSR’s “Heresy on Transmission.”)

In other words, a little extra long-distance transmission investment would go a long way toward making the ILSR’s vision of widespread renewable power an attainable system.

Don’t get me wrong, I still think either vision is way-out-of-the-ballpark crazy for the foreseeable future.  Still, there is a difference between “astronauts landing on Mars” crazy, and “astronauts landing on Pluto” crazy.  Both are way, way out of the ballpark at present, but one will always be way more economical than the other.

[Konrad also blogs at clean energy investing site Alt Energy Stocks.]

Posted in Energy markets, Environmental policy | Tagged , | 5 Comments »

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Blackouts in Brazil: Two views

November 11, 2009

Michael Giberson

Without additional comment, I present two articles online at Transmission and Distribution World, both addressing Brazil and blackouts:

Posted in Electricity | Tagged , , | 7 Comments »

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Tres Amigas transmission link overview at Alt Energy Stocks

November 11, 2009

Michael Giberson

I put together an overview of the Tres Amigas LLC proposal for Alt Energy Stocks, published today: “Tres Amigas Proposes Three-way Transmission Link.”  (Tres Amigas proposes to build a three-way transmission link between the Eastern Interconnection, the Western Interconnection, and the Texas Interconnection.)

The only company mentioned in the summary with a stock trading somewhere is AMSC.  The Tres Amigas project has been promoted as aiding the development of renewable power sources.  The combination apparently qualifies the discussion for posting at Alt Energy Stocks.  (Thanks Tom.)

The project should facilitate trade (of all kinds of power) among the three areas, reducing price volatility and lowering average wholesale prices overall.  Since it is proposed as a merchant transmission facility, without electric ratepayer money at risk, there is almost no downside to consumers from the project.

NOTE: Link to related Tres Amigas posts at Knowledge Problem.

Posted in Electricity, Energy markets | Tagged , , , | 1 Comment »

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