Northwest, which could grow to 3600 MW over the next three years, is not being driven by policies or public mandates. It is the beneficial economics of wind power over other generating sources that has made it so attractive to a region that needs power fast. A few key problems must be solved before it can happen, but so far wind is looking like a good fit
The huge region that is the Northwest of the United States is nearly void of utility scale wind turbines today. At the region's only wind farm, 38 units are spinning out 24.5 MW at Vansycle Ridge near Pendleton, Oregon. By the end of this year these turbines are expected to be joined on the ridge by 450 more machines, crossing the border into Washington and marching out towards the Columbia River. When all is done, PacifiCorp Power Marketing will buy the entire output of FPL Energy's 300 MW Stateline wind project, which will be the largest single wind development in the US (Windpower Monthly, February 2001).
And there is more. In Washington, nuclear plant operator Energy Northwest plans to build a 25-50 MW project at Nine Mile Canyon and distribute the green energy to its member utilities (Windpower Monthly, April 2001). Farther northwest, the Bonneville Power Administration (BPA) and Washington Winds Inc plan to build the 150 MW Maiden Wind Farm (story page 51). Washington Winds also has another 150 MW project in the works along the Columbia River. In Oregon, SeaWest is working with BPA to build up to 50 MW near Condon.
That is only the beginning. BPA is determined to be buying 1000 MW of wind energy by the end of 2003 -- a third of the region's 3000 MW power deficit. The federal power marketer asked wind developers in February to bid for contracts for up to 1000 MW of new wind facilities and it received more than it bargained for -- bids for up to 2600 MW (Windpower Monthly, May 2001). That is just for projects that could be developed before the end of this year. With this solicitation and projects already in the works, George Darr of BPA is predicting that as much as 1500 MW of wind energy could come on-line in the Northwest in the next two years. With potential expansions, this could increase to as much as 3600 MW of new wind capacity within the next three years.
Rates on the rise
In a region that relies on hydropower to generate almost 80% of its electricity -- but is both short of water and energy to meet the demands of consumers -- this new spate of wind development is good news indeed. A shortage of generation across the West, made worse by California's electric industry restructuring plan, is driving wholesale electricity prices higher than ever throughout the West. The problems in California continue, and Northwest river levels are low, meaning the region's usually abundant hydropower production is expected to drop by as much as 25%. That virtually guarantees that the Northwest will continue to see power supply problems and high prices for at least the remainder of this year and probably through 2002 until developers build more power plants.
The power situation is in such dire straits that Steve Wright, acting Administrator at BPA, has asked Northwest customers to conserve 10% of their energy use and is calling for a two year shutdown of the region's aluminium plants, which use 3000 MW of energy. Otherwise, the federal power agency may have to raise rates by a factor of two and a half. Even with the conservation, he says, rates are likely to hike 60% by October.
The cost counts
None of this wind development has anything to do with public mandates or regulatory actions. There are no Renewables Portfolio Standards setting minimum levels for the renewable energy content of electricity portfolios in either Washington, Oregon, Idaho or Montana -- the states of the Northwest. No state legislature has targeted a utility and forced it to include wind power in its generation portfolio. The closest thing to a mandate is an agreement made by UK utility Scottish Power to invest in 50 MW of renewable energy. This was a promise made by Scottish Power during negotiations for its buy-out of locally owned PacifiCorp back in 1999 (Windpower Monthly, April 1999).
The wind power development does have something to do with a Northwest ethic that demands non-polluting energy resources. A number of outlets have sprouted up for consumers through green pricing programs and for industrial customers and utilities through the Bonneville Environmental Foundation's Green Tag program.
Mostly, however, this large build up of wind resources is a result of economics. The current price of wind generation is lower than other resources and it can be brought on-line faster to help relieve today's power crunch. In Colorado, the Public Utility Commission (PUC) determined that utility Xcel had to include a 162 MW wind project in its resource portfolio at Lamar. The cost to produce power at the Lamar project simply pencilled out lower than the cost for new natural gas generators (next story).
This comes as no surprise to wind advocates. The American Wind Energy Association recently reported that FPL Energy's Stateline wind farm will spin out energy at $0.025/kWh. Compared to the going price in the Northwest for gas generation -- $0.05-$0.06/kWh -- wind is looking good.
"The price curves crossed and suddenly, even with all the services added into the cost of wind to do an apples to apples comparison, large wind projects are now competitive with other energy projects," Darr says. "That's the big deal. Now we have to try to figure out how to integrate wind into the system."
In its ruling on the Lamar project, the Colorado PUC said that integrating a couple hundred megawatts of wind into Xcel's large system is not a problem. With the thousands of megawatts of wind power potential in the Northwest, however, integration of large amounts of an intermittent energy source requires some major and detailed system planning. BPA has commissioned a systems impact study with ElectroTek of Arlington, Virginia, and is talking with the Electric Power Research Institute about developing a meteorological prediction model.
The system impact study will look at how wind generation affects the region's massive hydroelectric system at every location and how it affects scheduling the movement of power around the region. It will also cover transmission constraints. Currently wind is subject to extra charges for energy imbalance and capacity reserve that, according to Darr, could amount to as much as $0.025/kWh. The BPA is most excited to acquire a well-working tool to predict wind resources from day to day and hour to hour, says John Pease of BPA. He says the BPA wants to make wind work in the Northwest, and the weather prediction model could be the ticket to integrating wind efficiently into the system.
"If we can get a decent forecast of wind, then wind can get a better price for its power," Pease says. "The penalties for not being able to schedule a day ahead or an hour ahead are substantial. But, with the prediction model, we wouldn't have to hold as much in reserves and the risk on energy imbalance would be reduced, so the added charges to wind would be less. What we learn will shape how the wind industry develops this decade."
Marriage with hydro
The weather prediction model could also enable wind to take better advantage of the Northwest's other energy asset, the Columbia River hydroelectric system. Wind predictions would give a better sense of when and how the wind and hydro systems can best be used together -- when wind can provide electricity for pumping water into reservoirs, and when that water can be released to drive turbines when the wind stops blowing.
BPA believes the Northwest's wind resource will show wind to be an asset. "Harvesting the strong, steady winds of the Columbia River Basin works especially well with our hydro power base," says BPA Acting Administrator Steve Wright. "When the winds blow, we can save more water in reservoirs. When the winds are still, we can release the river's power. Wind farms add to our local renewable resources."