Alberta wind boom pushes the doors -- Transmission and trading

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A surge in proposed wind power projects in southwest Alberta has prompted the Canadian province's electric system operator (AESO) to move ahead now with a transmission upgrade it had not expected to need until sometime in the future. Lack of transmission capacity means some existing wind facilities are already submitting to operational restrictions.

Before it can add more capacity, the AESO needs the approval of the Alberta Energy and Utilities Board (EUB). In principle, the EUB sanctioned an upgrade in May 2005 when it approved an application from the AESO for about C$80 million of grid reinforcements in the southwest to be built in two stages. Work on the first stage, which will accommodate about 1000 MW of generation capacity at a cost of C$68-71 million, is progressing. But the EUB's approval of a C$7.2-8.9 million subsequent stage, the stringing a second 240 kV circuit on one of the new transmission lines built during the first phase, was made conditional upon a 300 MW wind farm near Waterton proceeding.

But there are enough wind projects at an advanced stage of the interconnection process to proceed with the second upgrade now, even without the Waterton project, says Neil Brausen, the AESO's director of system planning. From 587 MW of well-advanced wind power projects at the time of the original approval, the figure now stands at 1409 MW. Of that, so-called construction commitment agreements have been executed for 967 MW, which means fees have been paid to cover the estimated costs for interconnection of the projects to the grid.

AltaLink, the transmission operator in the region, is awaiting approval from the EUB of its detailed routing plan for the new lines. It hopes to begin construction this spring for completion by December.

Two hour gate closure

Meanwhile, wind power producers in the province are concerned about the impact of new market rules requiring generators to lock in energy volume and price offers two hours prior to delivery and to comply with dispatch instructions from the system controller. The new requirements, which had been scheduled to come into force in April, would radically change the playing field for wind. Until now, wind projects in Alberta bid into the province's power pool at $0/MWh to ensure their output is dispatched whenever they are operating. They receive, as all generators in Alberta do, the market clearing price.

Because wind is a non-dispatchable resource, producers say, their facilities will not be able to conform to the new rules. "The proposed amendment exposes our industry to potentially serious punitive damages for non-compliance," says West Windeau's Claude Mindorff, in a submission to the AESO.

Accommodating wind

The AESO plans to exempt wind generation from the new rules until October. During that time, says the system operator's Kent McDuffie, it will work with the industry to figure out how wind will be accommodated in the new regime. It is too early, he adds, to say what kinds of options the AESO will consider. "I think one of the governing principles is that we are not planning on doing anything that is unduly discriminatory," he says. "That being said, we need to work with the wind group to define what they can do and how they can come into compliance with the spirit of rules to the extent that is possible."

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