Navigating Interconnecion and Transmission in the Major US Markets

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A summary of wind generation interconnection issues and regional interconnection procedures

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  • PLEASE FILL IN YOUR OWN AGENDA TITLES AND TEXT. Change the blue bar location and add check marks as you move through the agenda.
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  • Navigating Interconnecion and Transmission in the Major US Markets

    1. 1. European Wind Energy Conference: April 22, 2010<br />Navigating Interconnection and Transmission in the Major US Markets<br />Rhonda Peters, Ph.D.<br />Grid Interconnection and Transmission Engineer<br />Kevin Brokish, M.S<br />Grid Interconnection and Transmission Coordinator<br />Clipper Windpower Development Co., Inc.<br />Carpinteria, CA<br />© 2010 Clipper Windpower, Inc. and subsidiaries. All rights reserved.<br />
    2. 2. Agenda<br />Navigating Interconnection and Transmission in the Major US Markets<br />Clipper Snapshot<br />1<br />Background: Key Transmission Policy Issues<br />2<br />FERC “Pro Forma” Generator Interconnection Process<br />3<br />Regional Interconnection Processes<br />4<br />Navigating Interconnection<br />5<br />2<br />
    3. 3. Clipper Snapshot<br /><ul><li>Established in 2001
    4. 4. Capabilities:
    5. 5. Wind Turbine Design/Engineering (R&D)
    6. 6. Wind Turbine Manufacturing
    7. 7. Wind Project Development
    8. 8. 740+ Employees
    9. 9. Headquarters: Carpinteria, California, USA / London, UK
    10. 10. Wind Turbine Assembly: Cedar Rapids, Iowa, USA
    11. 11. Publicly Traded on the London AIM Market </li></ul>3<br />
    12. 12. Clipper Product Line<br />Liberty<br />Britannia<br /><ul><li>10 MW
    13. 13. Offshore
    14. 14. Manufacturing: Blyth, England, UK
    15. 15. 2.5 MW
    16. 16. Onshore
    17. 17. 1,167.5 MW Installed
    18. 18. Manufacturing: </li></ul> Cedar Rapids, Iowa, USA<br />4<br />
    19. 19. Agenda<br />Navigating Interconnection and Transmission in the Major US Markets<br />Clipper Snapshot<br />1<br />Background: Key Transmission Policy Issues<br />2<br />FERC “Pro Forma” Generator Interconnection Process<br />3<br />Regional Interconnection Processes<br />4<br />Navigating Interconnection <br />5<br />5<br />
    20. 20. Electricity Business Regulatory Structure<br /><ul><li>Federal Energy Regulatory Commission (FERC)
    21. 21. Agency with jurisdiction over interstate electricity sales and wholesale electric rates
    22. 22. Independent System Operator / Regional Transmission Operator (ISO/RTO)
    23. 23. Coordinates, controls, and monitors the grid.
    24. 24. Public Utility Commission (PUC)
    25. 25. State-specific governing body that regulates the rates and services of public utilities.</li></ul>FERC<br />Entities<br />ISO/ RTO<br />Utility<br />Load<br />Gen<br />PUC<br />6<br />
    26. 26. Cost Allocation of Transmission<br />A Hotly Contested Issue<br />Wind shouldn’t get a free ride<br />Total Cost = Generation + Transmission<br /><ul><li>Separating generation from its transmission creates inaccurate economic signals</li></ul>Deciding which load should pay is difficult<br />Load will pay in the end, anyway<br /><ul><li>Generators with power purchase agreements can pass the cost through to consumers</li></ul>Cost Causers ≠ Sole Beneficiaries<br /><ul><li>Why should generators fund:
    27. 27. Lower emissions
    28. 28. Increased reliability and security
    29. 29. Local economic benefits
    30. 30. Capacity for future expansion</li></ul>Charging multiple generators is ineffective<br /><ul><li>When a project drops, its obligation can be “backfilled” with a new project, but the new project may not be prepared to fund a share of the transmission.
    31. 31. Developer cost of capital is much higher than utility cost of capital.</li></ul>Ad hoc system planning is inefficient<br /><ul><li>The system should be planned for both today and the future, but generators should not be charged for overbuilding.</li></ul>Load will pay in the end, anyway<br />Make Generators Pay!<br />Make Load Pay!<br />7<br />
    32. 32. Who Wants Regional Transmission Built?<br />My load shouldn’t pay. They aren’t using the transmission.<br />I don’t want to pay, either.<br />I want in-state wind because it brings jobs and property taxes.<br />Very Windy State<br />Low Load<br />Low Wind State<br />High Load<br />Transmission?<br />8<br />
    33. 33. Agenda<br />Navigating Interconnection and Transmission in the Major US Markets<br />Clipper Snapshot<br />1<br />Background: Key Transmission Policy Issues<br />2<br />FERC “Pro Forma” Generator Interconnection Process<br />3<br />Regional Interconnection Processes<br />4<br />Navigating Interconnection<br />5<br />9<br />
    34. 34. FERC “Pro Forma”Large Generator Interconnection Procedures<br />Transmission Credits<br /><ul><li>Transmission charges are discounted until network upgrade costs have been reimbursed.</li></ul>Interconnection Request<br /><ul><li>$10,000 (€7.500)
    35. 35. Site Control or an additional $10,000 (€7.500)</li></ul>Network Upgrade Reimbursement?<br />Feasibility Study<br /><ul><li>$10,000 (€7.500)
    36. 36. Technical Data</li></ul>System Impact Study<br /><ul><li>$50,000 (€37.000)
    37. 37. More Site Control</li></ul>Facilities Study<br /><ul><li>$100,000 (€75.000)
    38. 38. More Technical Data</li></ul>Large Generator Interconnection Agreement<br />10<br />
    39. 39. The Clogging of the Queue<br />Reason #1: Interconnection Requests Are Cheap<br />EXPENSIVE UPGRADES<br />Project #7<br />Project #6<br />“Cost Causers”<br />Project #5<br />Project #4<br />Project #3<br />Available Capacity<br />“Free Riders”<br />Project #2<br />Project #1<br />Used Capacity<br />11<br />
    40. 40. The Clogging of the Queue<br />Reason #2: Suspension<br />Project #7 (Waiting…)<br />MORE UP-GRADES<br />Project #6 (Waiting…)<br />Project #4’s Upgrade<br />Project #5 (Waiting…)<br />Project #4 SUSPENDED<br />Used Capacity<br />Project #3<br />Project #2 SUSPENDED<br />Project #1<br />Speculative suspended projects claim available system capacity<br /><ul><li>Queued generation faces uncertainty
    41. 41. Queued generation faces expensive upgrades</li></ul>12<br />
    42. 42. Agenda<br />Navigating Interconnection and Transmission in the Major US Markets<br />Clipper Snapshot<br />1<br />Background: Key Transmission Policy Issues<br />2<br />FERC “Pro Forma” Generator Interconnection Process<br />3<br />Regional Interconnection Processes<br />4<br />Navigating Interconnection<br />5<br />NOTE: Many LGIP details have paraphrased/simplified in the interests of time.<br />Please refer to Open Access Transmission Tariffs for the definitive rules of Generator Interconnection Processes.<br />13<br />
    43. 43. MISO: Midwest ISO<br />Interconnection Request<br /><ul><li>Size Dependent (<6MW to >1GW)</li></ul>$10,000 - $120,000 (€7.500 - €90.000)<br /><ul><li>Site Control or an additional $100,000 (€75.000)</li></ul>In Flux<br /><ul><li>Today: No (10% if 345kV or above)
    44. 44. Tomorrow: …?</li></ul>Feasibility “Test” determines if system upgrades are minimal and project can skip the “SPA” phase<br />Network Upgrade Reimbursement?<br />System Planning and Analysis Phase (“SPA”)<br />Optional 135-day “parking” <br />Definitive Planning Phase (“DPP”)<br /><ul><li>Size Dependent (<6MW to >1GW)</li></ul>$40,000 - $520,000 (€30.000 - €390.000)<br /><ul><li>M2* Demonstration of Project Seriousness
    45. 45. M3** Demonstration of Project Seriousness</li></ul>Interconnection Agreement<br /><ul><li>Cannot suspend</li></ul>*Milestone 2 (M2) is two of the following: application for air or land permits, PUC approval, approval to proceed from the project’s board of directors, purchase order or agreement for generating equipment, security equal to one month of transmission service (approx $2000/MW).<br />** Milestone 3 (M3) is one of the following: security equal to the cost of network upgrades, PPA, or a purchase/agreement for generating equipment<br />14<br />
    46. 46. SPP: Southwest Power Pool<br />Interconnection Request<br /><ul><li>$10,000 (€7.500)</li></ul>Feasibility Study<br /><ul><li>$10,000 (€7.500)</li></ul>Preliminary Interconnection System Impact Study<br /><ul><li>$60,000 (€45.000)
    47. 47. Demonstration of Site Control</li></ul>Network Upgrade Reimbursement?<br />Customer chooses where to enter process<br />Definitive Interconnection System Impact Study<br /><ul><li>$150,000 (€112.500)
    48. 48. *Demonstration of Project Seriousness</li></ul>Facilities Study<br />Revenue Credits<br /><ul><li>Generators are reimbursed as the network upgrades are used for transmission service.</li></ul>Generator Interconnection Agreement<br /><ul><li>Shared upgrades cannot be suspended
    49. 49. Suspension limit of 18 months, $5,000,000 (€3.750.000) deposit due at 6 months.</li></ul>*Demonstration of project seriousness means one of the following: Letter of Credit for Network Upgrades, Power Purchase Agreement, evidence of a “Designated Resource”, Purchase Order for Generating Equipment, Application for Air Permit, Filing of FAA Notice<br />15<br />
    50. 50. CaISO: California Independent System Operator<br />Direct repayment<br /><ul><li>Over a 5 year period</li></ul>Interconnection Request<br /><ul><li>$250,000 (€190.000)
    51. 51. $100,000 (€ 75.000) is not refundable
    52. 52. Site Exclusivity or an additional $250,000 (€190.000) </li></ul>Network Upgrade Reimbursement?<br />Phase I Interconnection Study<br />Phase II Interconnection Study<br /><ul><li>The Lesser of
    53. 53. 15% of network upgrade cost or
    54. 54. $20,000/MW (€15.000/MW) or
    55. 55. $7,500,000 (€5.600.000)</li></ul>Large Generator Interconnection Agreement<br />16<br />
    56. 56. PJM Interconnection<br />Interconnection Request<br /><ul><li>$100 - $200/MW (€75 - €150/MW) up to $100,000
    57. 57. Plus $10,000 - $30,000 (€7.500 - €22.500)</li></ul> Depending on timing in 3 month submit window<br /><ul><li>Demonstration of site control</li></ul>Network Upgrade Reimbursement?<br />Feasibility Study<br />System Impact Study<br /><ul><li>$50,000 (€37.500)</li></ul>Facilities Study<br /><ul><li>$100,000 (€75.000)</li></ul>Interconnection Service Agreement<br />No.<br />17<br />
    58. 58. ERCOT:Electric Reliability Council of Texas<br />Yes.<br /><ul><li>Security is required, but the utility funds network upgrades</li></ul>Network Upgrade Reimbursement?<br />Generator Interconnection Request<br /><ul><li>$1,000 - $5,000 (€750 - €3.700)
    59. 59. Not refundable</li></ul>Security Screening Study<br />Can delay up to 180 days<br />Full Interconnection Study<br /><ul><li>Cost dependent upon project and utility
    60. 60. Demonstration of Site Control</li></ul>Large Generator Interconnection Agreement<br />18<br />
    61. 61. Agenda<br />Navigating Interconnection and Transmission in the Major US Markets<br />Clipper Snapshot<br />1<br />Background: Key Transmission Policy Issues<br />2<br />FERC “Pro Forma” Generator Interconnection Process<br />3<br />Regional Interconnection Processes<br />4<br />Navigating Interconnection<br />5<br />19<br />
    62. 62. Navigating Interconnection<br />Often the interconnection rules/tariff change mid process making it critical to attend ISO/RTO stakeholder meetings.<br />Midwest ISO<br /><ul><li>2008: Interconnection Process Task Force (IPTF) Change from first in/ first out to milestone based queue process, suspension no longer allowed, and up to $120k to enter queue plus $520k to complete studies
    63. 63. 2009: Regional Expansion Criteria and Benefits Task Force (RECBTF)—change from 50% reimbursement for network upgrades to 0% if less than 345kV, 10% if 345kV and above</li></ul>SPP<br /><ul><li>2009: Generator Interconnection Task Force (GITF) changed from first in/ first out to milestone based queue process, suspension limited and more costly, higher deposits required</li></ul>CAISO<br /><ul><li>2008/2009 Generator interconnection changed from serial to cluster study, two phase process with $250k to enter queue and up to $7.5M security required to enter Phase II study</li></ul>20<br />
    64. 64. The challenges faced by the US wind industry cannot be met by individual companies. Industry Organizations play a critical role in responding to policies that create barriers to wind development<br />Wind on the Wires (“WoW”) – MISO, Midwest<br />The Wind Coalition – SPP, ERCOT<br />AWEA Transmission Committee – National<br />Center for Energy Efficiency and Renewable Technologies – CAISO and West<br />CALWEA—California Wind Energy Association – CAISO<br />Interwest Energy Alliance – West<br />Mid Atlantic Renewable Energy Coalition<br />RENEW New England – ISO-NE<br />Renewable Northwest Project (“RNP”) – BPA<br />Alliance for Clean Energy New York – NYISO<br />NWCC-Northwest Wind Coordinating Committee<br />21<br />
    65. 65. Thank You <br />Rhonda Peters, Ph.D.<br />Grid Interconnection and Transmission EngineerTel: +1 (805)-576-1188Email: rpeters@clipperwind.com<br />22<br />

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