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Renewable energy in from the cold?


Lyn Corum

One of the hot topics for debate at the forthcoming Windpower 08 event in Houston, Texas, will be transmission. Following Texas' lead, four states possessing the wealthiest renewable resources in the Western USA have enacted their own laws to create Renewable Energy Zones, and define the transmission infrastructure that needs to be built to connect those resources to main transmission highways. Lyn Corum reviews the progress made to date in these states.

Using the siren songs of global warming, national security and economic development, California, Colorado, Utah and Nevada have passed legislation over the past year, in support of increasing the development of renewable energy. In addition, three other states have chosen alternative paths to reach the same goals, namely to attract power development to the large remote desert and mountain areas of the western USA where the best resources exist.

Most western states have already created Renewable Portfolio Standards (RPS), that dictate to utilities how much of the electricity they sell must be generated by wind, solar, geothermal, small hydro or biomass – by some future date. The pressure is now on to get this renewable energy developed so the utilities can buy the power for their customers.

Transmission is the huge hang-up for all southwestern states from Texas through to Wyoming, New Mexico, Colorado, Arizona, Nevada and California. Wind, solar and geothermal resources lie in remote areas far from load centers and most high voltage transmission infrastructure. Where transmission does exist in these remote areas, it is already fully loaded.

Once the renewable energy zones are created and the required transmission is specified, utilities facing compliance with RPS' can apply to public utility commissions with justification and costs in hand to build the transmission.

Texas: creating the first CREZs – where did it all begin?

The Texas State Legislature began it all in 2005 when it directed the Texas Public Utilities Commission (PUC) to create competitive renewable energy zones throughout the state, and develop a plan to build transmission capacity that would bring wind-generated power to the state's load centers.

An earlier law expanded the state's RPS from 2880 MW by 2009 to 5880 MW by 2015, and included a target of 10 GW by 2025. It currently has 4446 MW of wind resources installed, more than any other state including California, according to the American Wind Energy Association (AWEA).

The state's best wind resources are to be found in central west Texas and northern Texas in the panhandle. The limited transmission infrastructure is already fully utilized in these areas. While the 345 kV transmission system in east Texas is well developed, new bulk transmission lines are needed to support the significant transfers of additional wind generation from west to east Texas where the load centers are.

At the request of the PUC, the Electric Reliability Council of Texas (ERCOT) developed a preferred plan for the five CREZs with the highest wind potential already designated by the PUC. Two of the CREZs are in the Panhandle, and three are in west-central Texas. The Transmission Optimization Study, delivered to the PUC on 2 April, developed four scenarios for each of the CREZs, and the transmission needed to transport the electricity generated in these areas to load centers

By June, the PUC is to select the amount of renewable energy to be developed in each CREZ, as well as the transmission expansion routes. And by September, it will select the transmission service providers to build the new transmission.

Jeff Totten, an Electricity Industry Oversight Manager at the PUC, reported that about 10 companies had expressed interest in building the transmission, including the five in-state utilities. Babcock & Brown announced on 27 March that it had formed Tejas Transmission LLC – with the intent to qualify to build a CREZ facility. It has already responded to a request for qualifications from the PUC. Totten said the Commission appears eager to act speedily in reaching the necessary decisions.

California

California has created a multi-agency, multi-stakeholder group known as the Renewable Energy Transmission Initiative (RETI), to identify and quantify the transmission investments necessary to deliver renewable resources to California's electricity grid. This effort is tied directly to the need to meet the state's RPS, which requires that 20% of the electricity consumed in the state in 2010 be generated from renewable resources.

Furthermore, this RPS may be increased to “33% by 2020”, to meet the greenhouse gas emission reduction requirements established by the state's global warming solutions law.

RETI leaders have adopted the CREZ name, if not the exact model, created by Texas. The work is being managed by a stakeholder steering committee supervised by a coordinating committee and is being done in three phases. Black & Veatch was hired to do Phase 1 work, and the report it delivered on 15 March is available on the CEC website.

RETI has extended its assessment of resources outside of California to include Arizona, Nevada, Oregon, Washington, British Columbia and the northern part of Baja California. Phase 1A work has already defined potential renewable resources and the study methodology. The renewable energy sources assessed include biomass – which could feasibly provide 17.7% of California's load in 2020; geothermal – which could provide 11% of California's 2020 load; both solar PV and solar thermal – which could each theoretically provide as much as 100% of California's 2020 load; and wind power – which could feasibly supply 51% of California's 2020 load.

Phase 1B will use the methodology developed to aggregate the resources into CREZs, and identify the costs of developing the renewable energy resources and delivering the energy. It will also broadly identify the transmission requirements needed to access the zones. Phase 1B will also describe the renewable resources and associated transmission options and their economics.

Phase 2 will examine generation and transmission in more detail, and will develop conceptual transmission plans to the highest ranking zones. Phase 3 is designed to support transmission owners in developing detailed service plans to build viable transmission projects, and develop the work plan for the regulatory approvals needed to build those projects.

Colorado

Colorado Governor Bill Ritter has created a New Energy Economy program to develop new jobs, economic development, energy security and environmental improvements by developing its abundant renewable resources.

The state has established an RPS of 20% renewable energy for investor-owned utilities by 2020, and 10% for rural electric cooperatives (and municipal utilities) by the same date. It also plans to export generated power to other electricity markets in Arizona, Nevada and Southern California.

Colorado has a wealth of renewable resources, according to Morey Wolfson, Utilities Program Manager in the Colorado Governor's office. It ranks number 11 in the nation for wind potential, and fourth for solar potential, as well as being fourth among western states for geothermal development site potential.

The Colorado State Legislature has passed two bills to develop the new energy economy in the state. Senate Bill 07–091 required that a report be produced by the Task Force on Renewable Resource Generation Development Areas. And it has produced a comprehensive report, Connecting Colorado's Renewable Resources to the Markets, which was delivered to the Governor in December 2007.

The task force mapped out the renewable resources throughout the state, and where they could be developed through competition among developers for utility-scale wind and solar projects. Called renewable resource generation development areas (GDAs), the task force defined them as a concentration of renewable resources within a specific geographic region – that provides a minimum of 1 GW of developable electric generating capacity (that could connect to an existing or new high voltage transmission line).

Eight GDAs were identified for wind and two for concentrating solar power (CSP) farms. Other renewable resources such as hydropower, geothermal or biomass were unable to meet the 1 GW threshold, but the task force did map them as local resources and made recommendations for their development.

At roughly the same time, Senate Bill 07–100 required Colorado's utilities to designate energy resource zones every two years – roughly based on the resource areas identified by the task force – and then to develop plans for the construction or expansion of high voltage transmission facilities to support those zones.

Public Service Company of Colorado, an Xcel subsidiary, has filed its certificate of public convenience and necessity (CPCN) with the Public Utilities Commission. It selected four energy zones for wind in its service territory – three in the eastern part of the state, and one in the south.

The second much smaller investor-owned utility, Aquila, also filed its CPCN and designated all of its service territory in the southern port of the state around Pueblo as an energy resource zone. It has already proceeded with the upgrading of one line in its territory.

The PUC has 180 days to approve the utilities' applications, and if it doesn't rule within that time, state law stipulates the applications will be deemed approved.

Finally, once the applications are approved, the two utilities can start recovering monthly costs they incur in planning, developing and completing, or expanding the transmission facilities needed to move the wind or solar resources to market.

Morey Wolfson said this legislation has produced increased involvement in transmission planning (none has been built in 30 years). It is also leading to better regional relationships, which is important to get the necessary transmission built, he said.

Utah

Utah has arrived late to renewable resource initiatives.

The legislature failed to pass a bill in March that would have created a task force to study renewable energy development zones. It did pass a bill on 18 March to create an RPS, called the “energy resource and carbon emission reduction initiative”, which requires an electrical corporation – such as PacifiCorp and its subsidiary Rocky Mountain Power – plus the many municipal electric utilities in the state, to ensure that “20% of [those utilities'] adjusted retail electric sales beginning in 2025 come from qualifying electricity, including renewable energy resources, if cost effective.”

Jason Berry, the Acting Director of the Utah State Energy Office, said Governor Jon Huntsman Jr.'s Energy Advisor, Dr. Dianne Nielson, intends to set up a task force to identify renewable energy zones and send an interim report to the legislature by summer 2008. The task force, he said, will identify energy zones and the transmission they need. At the same time it will start to tackle how renewable projects can be incentivized.

Berry did some initial work in mid-2007, and identified zones with potential for large wind generation in the west / central area of the state – known as West Desert – and along the Utah / Wyoming border in the northeastern corner of the state.

Other areas have less potential, making it harder to designate them as energy zones. Resources for CSP are also available in West Desert, as well as in southern Utah. Geothermal resources are concentrated, for the near term, in southwest Utah.

In brief: what do the big five western US States have planned for renewable energy?

  • Texas: Currently has 4446 MW of wind resources installed, more than any other state including California (source: AWEA). The Electric Reliability Council of Texas (ERCOT) has identified CREZs – two in the Panhandle, and three are in west-central Texas. ERCOT has also developed four scenarios in which various amounts of wind resources could be developed in each of the identified CREZs. By September, the Texas Public Utilities Commission (PUC) has said it will select the transmission service providers to build the new transmission;
  • California: California has created a multi-agency, multi-stakeholder group known as the Renewable Energy Transmission Initiative (RETI) to identify and quantify the transmission investments necessary, and has adopted the CREZ name, if not the exact model, created by Texas. The work is being managed by a stakeholder steering committee supervised by a coordinating committee and is being tackled in three phases (see main article). Phase 1A work has already defined potential renewable resources and the study methodology (see main article). RETI has extended its assessment of resources outside of California to include Arizona, Nevada, Oregon, Washington, British Columbia and the northern part of Baja California;
  • Colorado: The Task Force on Renewable Resource Generation Development Areas has produced a comprehensive report, Connecting Colorado's Renewable Resources to the Markets, which was delivered to the governor in December 2007. 8 resource generation development areas (GDAs) have been identified for wind, and two for Concentrating Solar Plants. [NB: a GDA must provide a minimum of 1 GW of developable electric generating capacity, which could connect to an existing or new high voltage transmission line];
  • Utah: Utah lags behind the other Western States when it comes to renewable energy's development. There is currently no task force set up to study renewable energy zones, though one may be in the pipeline. However, Utah has created an RPS requiring an electrical corporation – such as PacifiCorp and its subsidiary Rocky Mountain Power – plus the many municipal electric utilities in the state, to ensure that “20% of [those utilities’] adjusted retail electric sales beginning in 2025 come from qualifying electricity, including renewable energy resources, if cost effective”;
  • Nevada: In May, 2007, Nevada Governor Jim Gibbons created the Nevada Renewable Energy Transmission Access Advisory Committee, whose job was to propose recommendations that would assist renewable energy industries in gaining access to the grid system – allowing them to have market access in Nevada and neighbouring States. The Committee defined 6 geothermal zones, four solar zones, 12 wind zones and four biomass zones. It identified 13 possible transmission links to connect the renewable energy zones to Sierra Pacific's transmission grid.

Nevada

Nevada adopted an RPS in 1997, which has been modified by the legislature several times.

Currently, the RPS requires the state's two investor-owned utilities, Sierra Pacific Power and Nevada Power, to generate or acquire renewable energy, or reduce energy use through energy efficiency measures by at least 20% of electricity sold by 2015.

In May 2007, Nevada Governor Jim Gibbons created the Nevada Renewable Energy Transmission Access Advisory Committee. Its job was to propose recommendations that would assist renewable energy industries in gaining access to the grid system, allowing them to have market access in Nevada and neighboring states. The committee was to report back to him by 31 December 2007, which it did.

The 14-member committee defined 6 geothermal zones, four solar zones, 12 wind zones and four biomass zones, but did not quantify the exact MW potential, due to insufficient information. It identified 13 possible transmission links to connect the renewable energy zones to Sierra Pacific's transmission grid.

The committee recommended that the Governor's office support the construction of transmission lines and collector systems to provide access to the renewable energy zones identified in the report. It also recommended the Governor support the State's two regulated utilities' plans to build the Eastern Nevada Transmission Interconnection (En-ti).

Northern Nevada – where Nevada Power's service territory lies – has abundant geothermal and wind resources. Southern Nevada has abundant solar resources where Sierra Pacific Power's service territory is located. However, the utilities' transmission systems are not connected. The two utilities already have plans in their respective resource plans to build a north-south En-ti connector line.

The third recommendation is for the Governor to initiate the Advisory Committee's Phase II work of defining the environmental and physical feasibility issues, costs and potential financing mechanisms associated with the recommended transmission routes; this is to be completed by 31 December 2008. Dr. Hatice Gecol, Director of the Nevada State Office of Energy, said a committee was organized in March to begin this work.

Wyoming, New Mexico, Arizona

Wyoming has chosen to pursue transmission development through merchant arrangements. As Steve Waddington, Executive Director of the Wyoming Infrastructure Authority explained, renewable energy zones are being developed in other states to facilitate utilities filing for rate recovery at their public utilities commissions, once a need for the transmission has been identified.

Instead, the Wyoming Infrastructure Authority was created in 2004 to develop electric transmission infrastructure to diversify and grow the state's economy.

Its responsibilities include planning, financing, building, maintaining and operating interstate transmission. While it has been tasked to finance and promote advanced coal technologies, WIA is also promoting wind development, which will share transmission capacity with coal resources. Black & Veatch estimates Wyoming has 14.3 GW of economical wind development potential for 9 site areas on the eastern side of the state.

In a 2005 announcement by the Governors of Wyoming, Nevada, California and Utah that received much press coverage, the Frontier Line was introduced. It was to be built to stretch from Wyoming to California. It has since morphed into several newer projects being developed by the Wyoming Infrastructure Authority, and its partners.

The WIA is working with a multiple number of utilities on four transmission projects, all of which have one merchant company partner. These are the Wyoming-Colorado Intertie, the TransWest Express, Gateway South and the High Plains Express. All of the projects propose originating in Wyoming, and then cut south on different paths through Colorado, Utah or New Mexico and Arizona to Nevada, where there are interties to California.

WIA announced on 31 March its open season auction for up to 900 MW of transmission capacity on the Wyoming-Colorado Intertie. Once a majority of the capacity is subscribed, the partners, including Trans-Elect Development Company and the Western Area Power Administration, will commence development.

New Mexico chose to create the Renewable Energy Transmission Authority through state legislation in 2007. A 9-member Board oversees the activities of RETA, which is housed within the New Mexico Energy, Minerals and Natural Resources Department. RETA will focus on electric system transmission infrastructure planning, financing and implementation. It is the only entity in the state that has this responsibility.

Furthermore, through multi-state, multi-electric utility negotiations, RETA intends to facilitate the development of New Mexico's transmission infrastructure for renewable energy development and export, positioning the state to be competitive in an emerging market.

Given that RETA is just getting established, its first major responsibility will likely be its oversight of the 500 kV SunZia Southwest Transmission Project which is being developed by a private company, SunZia Southwest LLC, to export power to western markets.

It will be built from east to west across the southern part of New Mexico into Arizona. The project is still in the planning process with siting and permitting beginning this year.

Arizona Corporation Commission adopted an RPS in 2006, requiring regulated utilities to obtain, by 2025, 15% of their generation from renewable resources. Currently they derive just 0.07% from non-hydro renewable resources. Arizona Public Service, Tucson Electric Power and Salt River Project, the largest utilities in the state, hired Black & Veatch to study the resources available to them – to satisfy the RPS mandate. That report was delivered in September 2007.

Black & Veatch identified 5468 MW of various near- to mid-term renewable resources in the state, of which 4.3 GW were for solar thermal projects. It labeled the solar potential as “vast” and said solar technologies will play a key part of the renewable energy future in Arizona. The report did not touch on transmission infrastructure needs. However, Arizona Public Service is participating in the TransWest Express Transmission Project, being developed by the Wyoming Infrastructure Authority and others (discussed above).

Summary

A stated goal of western Governors and independent developers, especially in Wyoming, Colorado, New Mexico and Arizona, is to tap into the lucrative California market with its large but currently unfulfilled desire for renewable power. However, initial reports indicate that the pool of near-term renewable resources is so large, especially in California, that there could be a glut of renewable power in the marketplace, if it all gets built. Which would be good for prices, if it all gets built. Watching that market develop in the next five years will certainly be fun.



About the author

Lyn Corum is a freelance Western US correspondent for Renewable Energy Focus magazine.

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