United States

United States

Accelerating plans for new wires -- Texas consumers to pay up front for needed wind transmission

The recent flurry of development that has pushed Texas past California atop the US wind power rankings has raised questions regarding the challenges facing the state's transmission infrastructure. But, according to the Electric Reliability Council of Texas (ERCOT), help is coming on two fronts.

First, a five year plan for improvement is being implemented as part of the state's normal transmission planning process, says ERCOT's Warren Lasher. "Relieving congestion from all the new wind generation is a part of that effort." Second, a new process above and beyond the normal planning is about to kick in. In 2005, the Texas Legislature passed Senate Bill 20 which, along with setting a goal of 5880 MW of renewables by 2015, also included a transmission plan intended to greatly increase overall capacity while getting electricity from remote windy areas to population centres.

Planning ahead

The bill requires that competitive renewable energy zones (CREZ) be designated to clear the way for additional transmission infrastructure. CREZ will turn the existing process around by planning ahead for transmission in wind-rich areas so that when new wind power is ready to connect to the network, the lines are already there. Costs will be absorbed by Texas consumers in their electricity bills.

"When new transmission is required, it has to go through a certification process," says ERCOT's Dan Woodfin. "It typically takes five to six years from when the lines get the go-ahead. CREZ will accelerate that overall process and take care of the need portion of the certification process." ERCOT is currently collecting data and nominating the likely zones.

"We've done quite a bit of work so far to identify regions that wind developers are interested in," Woodfin says. "We picked several areas that are candidate CREZ zones. We're looking at what kind of transmission will be put in place and we're examining the financial commitment of the wind developers." In other words, much of the purpose of the CREZ process is to figure out where wind generators are most likely to end up building. "If the wind potential isn't there, the wind developers aren't going to develop," says Woodfin. "And if they're not willing to put the turbines in the ground, there won't be new transmission."

Timetable

Each CREZ is expected to support roughly 1000 MW. The potential exists for more than $1 billion in additional wind development, transmission wires and tax base. A timetable set by the Public Utility Commission of Texas (PUCT) includes this month's deadline for comments, rules finalisation by December and actual CREZ designation by spring of 2007. The actual number of zones is not yet final.

"Our intent is to give results of our study to the commission," Woodfin says. "At this point, we're trying to do the studies at the same time the rules are being developed. We'll be providing this info to the PUCT in December and they'll ultimately select the zones."

In future, additional zones will be selected on an annual basis and can be designated anywhere in the state, not merely within ERCOT's boundaries, which do not include the windy Texas panhandle. Extending the area for zones classification brings the Southwest Power Pool into the CREZ process.

"Wind developers can be at the mercy of their dumbest competitors," Lasher says. "Everything might look good on paper but it's possible that several other developers can build in the same area and everyone can face curtailment. That's what we're trying avoid."

In recent years, ERCOT has ordered wind power curtailments to prevent overloaded transmission systems in the western part of the state -- a major hub of development. Woodfin believes those days are long gone, even though the state is likely to see a race to bring projects online before the sunset of the federal production tax credit at the end of 2007.

"I think things have gotten a lot better," says Woodfin. "I can't see a return to the days when wind generation gets up to a point where curtailment is a question. I believe most of the wind development folks are thinking that this CREZ rule is a step in the right direction."

Lasher agrees. "I think in four years you're going to start seeing the new lines related to CREZ," he says. "ERCOT as a whole is in a really good position to incorporate a significant amount of wind -- I mean thousands of megawatts more than we have now. But it's not like we're only looking at brand new solutions. The CREZ process is also going to push some previously planned transmission projects to the front."

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