System operator under heavy fire -- Alberta caps wind at 10%

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Alberta's power system operator is imposing a 900 MW limit on the volume of wind generation it will take onto its grid until measures are in place to ensure capacity additions beyond that mark do not jeopardize system reliability. The cap is equivalent to no more than about 10% of the province's total installed capacity. With 541 MW of wind plant either online or under construction -- and another 1106 MW with interconnection commitments -- the Alberta Electric System Operator (AESO) expects the cap to be reached by late next year. More than 3000 MW of wind is at various stages of development in Alberta.

AESO set the cap on release of the second phase of its wind variability study. The study's first phase, aired in November, found the Alberta Interconnected Electric System (AIES) could face operational and reliability issues when wind generation hits 895 MW. Phase two was designed to test potential mitigating measures, including increasing regulating reserves, implementing forecasting techniques and curtailing wind power facilities.

Variability study

"These are not the only possible mitigation strategies and more work needs to be done in this area," states Warren Frost, the AESO's vice president of operations and reliability. "However, the important conclusion resulting from this study is that the scope, scale and potential cost of necessary mitigating measures appear to escalate rapidly when more than 900 MW of wind generation operates on the AIES," he adds. "The increased mitigation measures will come at some cost, and therefore the allocation of these increased costs must also be determined."

Canada's wind industry counters that the study is based on limited data and assumptions that are not truly reflective of reality. "For example, this study is premised on a static system that has limited geographic distribution of wind energy development, no changes to transmission infrastructure, and a focus on the impacts of wind variability on a single key transmission intertie," says Robert Hornung, of the Canadian Wind Energy Association (CanWEA).

The industry, he says, is "gravely concerned" that the limit may end up influencing future policy decisions in areas like transmission planning. Already, adds West WindEau's Claude Mindorff, the AESO appears to be planning a transmission expansion in southeast Alberta "on the basis of no wind power development beyond the 900 MW in the queue." West WindEau, based in Medicine Hat, is developing a 200 MW project in the southeast with an anticipated in-service date of September 2008.

Industry disagrees

While the industry strongly disagrees wind's variability will be a significant issue at the 900 MW mark, says Hornung, it does accept that at "some higher level of penetration" mitigating measures could be needed. "CanWEA believes that wind energy forecasting has real potential to assist in managing the variability of wind energy production." He advocates a joint AESO-industry working group to design a trial of different wind energy forecasting technologies to determine their effectiveness, particularly in the four to six hours hour ahead of power delivery.

The group should be in a position to recommend a forecasting method and implementation plan by the end of the year, says Hornung. It is premature to consider wind generation curtailment as a tool to deal with variability, adds.

CanWEA has also initiated a study designed to quantify the benefits of wind energy to Alberta consumers. Integration studies in the US, Hornung points out, have shown that significant penetrations of wind are possible with only modest changes to the level of reserves, that the displacement of fossil fuels can provide substantial savings for consumers, and that the reactive power control and low-voltage ride-through capabilities of modern wind turbines can actually improve system stability. "Clearly, if wind energy provides market benefits for consumers, this may help to offset any concerns associated with the costs of modest increases in regulating reserve," says Hornung.

The situation has prompted the AESO to propose a method for managing the interconnection queue, a plan that has come under fire from the industry for unrealistic timelines and too much emphasis on cash payments to the AESO, rather than project development milestones, to lock up space on the grid.

Not so fast

Not all wind producers are convinced Alberta's wind capacity will hit 900 MW as quickly as the AESO expects. Unlike other provinces where long term purchase contracts are the norm, Alberta's competitive market model means wind producers will face some degree of merchant risk at a time when wind project costs are rising, says Vision Quest Windelectric's Kevin van Koughnett. There is also uncertainty about the timing of key transmission upgrades and about how wind will be treated under 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. It all makes for a pretty tough environment, says Van Koughnett.

"That is why I am not really spooked by this thing. I see it as a whole bunch of things that are swirling around out there that give you pause in terms of making an investment -- and this is just one more of those."

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