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Utility offers hydro as wind storage -- Market solution to intermittency

Utilities in the United States Northwest that want to buy wind resources but do not want to manage the hour-to-hour output of the intermittent resource have a friend in the Bonneville Power Administration's (BPA) vast 7000 MW hydroelectric system. Last month, BPA began offering a product to its utility customers that takes the intermittent output of a wind plant and stores it in the hydro system. BPA then delivers that energy to the public utility in flat blocks one week later.

"Utilities are used to getting power delivered as a flat product and this allows them to have the same comfort level with wind as with a regular power product," says Rachel Shimshak of the Renewables Northwest Project, an advocacy group located in Portland, Oregon. "Bonneville is helping to reduce a barrier that makes the purchase of wind energy a lot easier. We're hoping that other Northwest utilities will offer a similar product."

Cowlitz Public Utility District, a small utility in southwest Washington, was the first to sign on to the service, says BPA's John Pease, pointing out that small utilities can have problems dealing with the intermittency of wind. Cowlitz Public Utility District bought 2 MW from Energy Northwest's Nine Canyon Wind farm in eastern Washington.

BPA says it does not need to develop further generating resources for several years, including wind, but it is hoping the new wind integration product will encourage more wind development in the Northwest. It will offer the service for up to 450 MW of wind generation through 2011. At least 200 MW of that will go to its public utility customers.

"Integrating wind generation will be an important part of BPA's future strategy to encourage regional development of renewable energy resources," says BPA's Steve Wright. "It is yet another example of how the flexibility of the Northwest hydro power system provides value to the people of this region."

Soaking up wind

The service costs public utilities located within Bonneville's control area -- and with existing transmission contracts with BPA -- $4.50 for each megawatt hour of shaped wind power. The local utility must first secure its own power purchase agreement, assure it has transmission for the wind into the BPA system and schedule the wind power. The utility is responsible for paying any imbalance fees for power delivered over transmission lines. BPA takes it from there. It uses its hydro system to absorb the wind power and sends an equal amount of flat energy to the customer one week later.

Investor owned utilities (IOU) can sign up for the storage and shaping service for $6/MWh, adjusted annually for inflation. They must also pay the transmission fees to deliver the wind resource into the BPA control area and back out when Bonneville delivers the flat blocks of power. Pease says BPA is working on a deal with Portland General Electric, an IOU, for delivery of power from an expansion at Oregon's Klondike wind farm owned by PPM Energy.

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