The Bonneville Power Administration in the Pacific Northwest has run smack into an issue that may well be repeated elsewhere as wind power gains a larger share of the electric power generation mix.

The issue is wind integration and, more to the point, how to manage operational and cost allocation issues that arise as wind power projects come into service. It also touches on public perceptions about wind and what role it can and can't play in meeting electricity demand.

BPA Administrator Steve Wright wrote in a July 21, 2009 decision that while the "explosion of wind power on the BPA system" since 2005 should be cheered and further encouraged, his agency "cannot responsibly ignore the fact that the large amount of wind on our system has also led to operational challenges." Challenges include risks to reliability, substantial costs and the need to appropriately allocate them.

BPA's decision adopted a rate of $5.70/MWh for wind integration or wind balancing services. The charge is less than half the $12/MWh BPA initially proposed. The decision and tariff could, according to law firm Stoel Rives, signal the wind industry that transmission providers may "change course as they react to increasing amounts of wind being integrated into the grid." Stoel Rives represented a group of renewable energy companies during the proceedings. Parties to the case included the Los Angeles Department of Water and Power, which buys power from wind farms in the Pacific Northwest.

Precedent Setting?

Whether or not the BPA's approach wins any followers elsewhere remains to be seen. "Gosh, I hope not," said Brandon Kirby, a consultant who co-authored a report last year for the American Wind Energy Association and the National Renewable Energy Laboratory. In it, Kirby and co-author Michael Milligan wrote that when wind power plants serve load within a host balancing area, no additional capacity is required to integrate wind power into the system. That's because the wind energy displaces conventional generators' energy.

"When wind serves load outside the host balancing area, there can be additional capacity requirements," the report said. How much depends in part on the length of the market period: faster markets are better able to mitigate this requirement and slower markets will exacerbate the capacity requirement.

For example, in developing its regional power plan, the Northwest Power and Conservation Council applies a discount to wind when it figures in system capacity, said Tom Karier, Washington member of the Council. That means planners count on 5 percent of a wind farm's nameplate capacity to be generating at times of peak load. For energy planning purposes, by contrast, the Council considers 30 to 35 percent of nameplate capacity. And, using smart grid resources, operational tools and reserve generation, wind power can become even more useful and predictable as a substitute for baseload capacity, he said. "Wind without backup is an intermittent resource," he said.

In an interview, Kirby said he was disappointed BPA chose to impose a wind integration tariff. He said the issue might have been resolved by adopting "fast-market" sub-hourly scheduling, similar to what is used in the MISO (Midwest) and ERCOT (Texas) regions. Sub-hourly scheduling opens access to more "maneuverable capacity" within a control area and makes accommodating wind much cheaper, he said.

Managing Uncertainty

A large part of integrating wind into a system is managing uncertainty that exists around forecasts, said John Dumas, manager of operations planning for ERCOT. Any resource forecast will contain a degree of uncertainty. Planners quantify the uncertainty and then make certain they have enough reserve capacity to cover it. ERCOT's approach is to buy enough reserve capacity to cover 95 percent of the forecast errors seen over the previous 90 days. Dumas said ERCOT takes a conservative approach to forecasting wind using an "80 percent of exceedance" forecast. That essentially means that 80 percent of the time the wind resource will exceed the forecasted number.

Wright, in a preface to the 541-page BPA decision, said the power authority's challenges with wind integration have been exacerbated because "nearly 80 percent of the wind on the BPA system is exported to other balancing authority areas." He said failing to solve the problem threatens to limit the amount of wind power than can be interconnected with the BPA transmission system. BPA expects to move from a system that has 20 percent peak wind-to-peak load today to nearly 40 percent peak wind-to-peak load over the next two years.

Wind Growth

A decade ago, wind capacity on BPA's system was 25 MW. Today, more than 2,000 MW of wind is interconnected to its 10,500 MW peak load balancing area. That capacity could grow to 6,000 MW by 2013, placing BPA among the utilities with the highest concentration of wind energy in the United States.

As part of its larger 2010 wholesale power and transmission rate adjustment proceeding, BPA took up the issue of wind integration. It said wind resources are producing large ramp events over short periods of time. In general, these output changes had not been predicted in hourly schedules submitted by wind operators, even when the ramp occurred over the course of several hours.

As a result, BPA said it needs to reserve parts of its hydroelectric system to back up wind in case unscheduled wind ramps occur unexpectedly.

"Historically BPA has used the Federal hydrosystem to provide reserves for all variability that occurs within its transmission network, but wind has presented unprecedented variability."

Policy Errors

BPA said the problem of scheduling inaccuracy has been aggravated by its own policy. Starting in 2002 BPA exempted wind operators from penalties targeted at scheduling inaccuracies. It said the exemption was created on the basis of wind being a variable resource not under the operator's control and that the existing imbalance penalties were designed to stop generation operators who were seeking to take advantage of market prices through providing knowingly inaccurate schedules.

BPA said that as wind has grown on its system, its "lenient policy" has led to "rather indiscriminate use of balancing services even when within the control of wind operators."

It said its new policies have begun to alter this behavior.

For example, prior to its actions to investigate the issue, BPA said the wind fleet was operating at roughly two-hour "persistence scheduling accuracy." In recent months this has improved to a "one-hour persistence overall" with some operators approaching 30-minute persistence.

Persistence scheduling accuracy is a measure of how accurate the power generation schedules are that are submitted by wind energy producers. The number measures the difference between the wind energy generated and when the schedule said that amount of energy will be generated.

For example, if a wind project generates 100 MW at 1 p.m., but the schedule says it will not generate 100 MW until 3 p.m., that is a two-hour persistence scheduling accuracy said Michael Milstein in the BPA's Public Affairs Office. If it were only 30 minutes off, that would be 30-minute persistence scheduling accuracy.

"Wind operators are investing in meteorologists and 24-7 scheduling operations in order to better their scheduling accuracy," BPA said in its July 21 decision. What's more, moving away from two-hour persistence allows BPA to carry fewer reserves and not have to confront the issue of whether new sources of balancing reserves must be acquired.

BPA said that in arguing that its proposed charge penalizes wind generators for wind's natural variability, "the wind generators themselves recognize that wind generation is much more variable than other generation." It said wind generation puts stresses on the transmission system that thermal generation and load do not. BPA said historical data showed it has experienced persistent and large deviations. The larger the deviation the more balancing reserves BPA must deploy to correct it and the larger the impact to the system's hydro operations.

"Penalties for persistent and large deviations are necessary because such deviations may reduce BPA's ability to provide balancing reserves to maintain load and resource balance."