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Analysis: Transmission - Gaelectric plans to corner Montana

UNITED STATES: Irish renewable energy developer Gaelectric aims to corner the market on wind projects in Montana with a comprehensive plan that involves advance booking of transmission capacity, leases on massive tracts of wind-rich land and compressed-air energy storage facilities.

The scheme could result in hundreds of megawatts of new generation in one of the windiest and least developed states.

The company revealed its intentions in September by announcing an $18 million deposit to secure transmission capacity with Bonneville Power Administration (BPA) and NorthWestern Energy, whose lines will be used to move power from Montana to West Coast population centres from 2014.

The bulk of the money raised from European private equity sources will go towards reserving 960MW on BPA's system, for which the federal transmission operator requires a year's deposit; reserving 460MW on NorthWestern's system requires a one-month deposit.

The payment will allow Gaelectric to participate in BPA's 2010 Open Season process, whereby the federal transmission operator studies system upgrades it will need to handle requests in its queue. Gaelectric's request is among 76 that BPA received this year.

Montana, ranked fifth among US states in wind potential, has only 385MW online due mainly to sparse population and inadequate transmission for moving power from remote areas. Gaelectric is helping Canada-based Tonbridge Power finance a 160-kilometre transmission project, the Green Line, which will eventually link NorthWestern's system to BPA lines that reach cities in the Pacific Northwest.

Gaelectric has also secured more than 100,000 hectares of private Montana land under long-term leases.

Tom Kaiserski, programme manager with the Montana Department of Commerce's energy promotion and development division, says that Gaelectric has gone to a lot of effort to achieve its aims, adding: "They've been beating the bushes and hired some good people."

The company is eyeing 13 project sites of between 1,200 and 28,500 hectares, with projects that could range from 25MW to 800MW or more. There are a couple of sites that could be brought online by 2012, according to Van Jamison, Gaelectric's vice-president of strategic operations.

He believes the Montana sites, with capacity factors in the high 30% and low 40% ranges, are far more attractive than vaunted Columbia River Gorge sites to the west. "Even the best sites in Oregon and Washington, at 32%, are dime a dozen in Montana," he says. "We would not even look at a site that only has the energy potential of the best Oregon and Washington sites."

But Jamison readily admits that transmission will be the key and that there are development hurdles in Montana that do not exist in Oregon or Washington. "If it had been as easy to build in Montana as it was to build in Oregon and Washington, they would have been in Montana long ago," he says.

As for financing, Gaelectric expects to find collaborators. "Our goals are sufficiently brave that we know we are not going to be able to carry the entire load. We would like to be in a position to own, operate and maintain our own facilities. But we are willing to consider partnering with folks who might insist on being the owner-operators of some facilities," Jamison says.

Meanwhile, Gaelectric has considerable experience with compressed-air energy storage in Europe and has identified a pair of depleting natural gas reservoirs in Montana that could be ideal for wind facilities in the 80MW to 150MW range. Typically, compressed-air schemes release the stored air into natural gas power plants to increase their power production.

"What we are exploring is whether or not these caverns can accept and release air rapidly," Jamison says. "We are in the process of doing that at two sites. But the important implication is that compressed-air energy storage is a technology that everyone knows works."

While Jamison recognises that the cost of compressed-air energy can be prohibitive, he believes that finding success will have long-term implications for similar geological formations in Oklahoma, Texas, Kansas, Nebraska and elsewhere. The company eventually intends to combine compressed air with turbines to self-regulate its energy or even sell to others.

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