Northwest Wind Integration Action Plan

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It has been eight months since we began addressing the challenge of how to best integrate wind energy into the Pacific Northwest’s existing hydro-rich electricity system. The attached Northwest Wind Integration Action Plan is the result of the hard work and collaboration of many of the region’s utility, regulatory, consumer, and environmental specialists. The report has several important policy findings and conclusions:

1) There are no fundamental technical barriers to operating 6,000 megawatts of wind in the Pacific Northwest. 
There is a range of estimated costs associated with integrating wind into the Northwest power system. When wind energy is added to a utility system, its natural variability and uncertainty is combined with the natural variability and uncertainty of loads. As a result, there is an increase in the need for system flexibility required to maintain utility system balance and reliability. The cost of wind integration starts low, particularly when integrating with a hydropower system that has substantial flexibility, and then rises as increasing amounts of wind are added. Locating wind resource in geographically diverse areas can help reduce costs. Ultimately, costs plateau at the cost of integrating wind with natural gas power plants. 

The preliminary cost estimates for integrating 6000 MW of wind power are based upon existing levels of system flexibility. Load growth and other competing uses for that flexibility, and possible further constraints on system operations will diminish the supply and increase the cost of wind integration services.

With increasing amounts of wind, there will likely be times when large, unexpected changes in wind output (so-called “ramping events”) coincide with periods of limited hydro flexibility. Initial analyses indicate that these will be low probability events, but if other sources of flexibility are not available at the same time, system operators will need to limit wind output for brief periods in order to maintain reliability. The Federal Energy Regulatory Commission now requires wind plant operators to help protect system reliability. Northwest utilities and wind developers are collaborating to implement the requirement in a mutually-satisfactory and cost-effective manner.

2) Wind energy is providing value to Northwest electricity consumers, but the Northwest will still need other resources to meet peak loads. 
The fundamental value of wind to a utility’s portfolio is its ability to provide energy to displace fossil fuel consumption, limit exposure to uncertain and volatile fuel prices, and hedge against greenhouse gas control costs. Because wind is primarily an energy resource with relatively little contribution to meeting system peak requirements, the Northwest will need to build other resources with greater capacity value to meet growing peak loads. 

3) In the short term there is available transmission capacity to integrate additional wind resources – but this is not expected to last for long. 
New transmission will be needed to support growing loads and resource additions and can help open up new areas for wind development, helping to diversify wind production. This diversity helps smooth variability and therefore lowers the cost of wind integration. Because of the limited contribution of wind to meeting system peak requirements, traditional models for transmission development and marketing should be altered to achieve greater economic efficiency. A more economical and efficient approach for a resource such as wind is to provide a mix of firm, non-firm, and conditional firm transmission that achieves a balance between the cost of transmission capacity and the value of delivered wind energy. Cooperation among transmission planners, regulators, utilities, and the wind development community is essential to create a workable model for planning, financing, and marketing transmission for wind energy.

4) The major portion of wind integration costs are due to the need for additional flexibility resources to balance loads and resources in real time in order to accommodate wind variability.
Control area operators must have sufficient flexible generating capacity or load management options available to accommodate load and wind variability to ensure that reliable service will be maintained. There should also be provisions for equitable recovery of the associated costs.

5) There are steps we can take to increase integration capability and to lower integration costs. 
The cost of wind integration services can be reduced through generally four types of actions: (1) developing more cooperation between regional utilities to spread the variability of wind more broadly; (2) developing markets that will reward entities who choose to market their surplus flexibility; (3) making more low-cost flexibility such as that provided by hydroelectric resources available; and (4) development and application of new flexibility technologies. Achieving these goals will require coordinated actions similar to those required to establish the Pacific Northwest Coordination Agreement of the Columbia River Treaty. Fortunately, the region has a long history of forging cooperative agreements designed to increase the size of the pie for all regional consumers that can provide a model for what will be needed over the next several years to address wind integration issues.