Meeting California's goal of a 20% renewable energy portfolio based largely on wind farms will require major investments in reliability services, conventional generation services, power markets and forecasting capabilities will be needed, according to a report to the California ISO Board of Governors Oct. 17.

The governors informally concluded that the engineering report will have a major impact on future California energy policies, but as ISO President and CEO Yakout Mansour put it, the 20% requirements is the law and the report only delves into the issues of what it takes to carry out the policy. The report is an engineering study, not a policy document, he said.

The governors expressed concern that legislation and policy are in play to expand the requirement to 33%, but Mansour said ISO officials have been very active in making these wind integration issues well understood among policymakers. Still, utility and ISO officials acknowledge the report and its successors on costs and market impacts are likely to figure prominently in policy and regulatory considerations, not only for the renewables standard, but for implementing the state's greenhouse gas limitation statutes and for regulating air quality, resource adequacy, reliability and energy markets.

To make the system function, the ISO will face many challenges, Clyde Louton, the grid operator's senior operation coordination engineer, told the board.

Louton said the study, produced with General Electric Co., assumed that 4,200 MW of wind generation would be built in the Tehachapi Wind Resource area by 2013, but that dynamic reactive support from the generators would be needed and that existing wind facilities do not have capabilities to ramp up and down by degrees,

Wind varies tremendously, Louton said. The study shows that wind could swing from 100 MW of capacity output to 6,000 MW from day to day and that existing variations ranged from 30 MW to 1,800 MW. When energy is needed most, wind drops off, but during off-peak hours the wind can exceed demand and needs to be regulated or the output compensated by backing off other generators. On July 27, 2006, during an extended heat wave, wind power output dropped back to 7% of capacity, or about 60 MW, Louton said.

The swing has serious implications for conventional generators and would lead to more operating costs, through the market for balancing requirements would present ample economic opportunities for generators able to meet those needs. The ISO's Market Design and Technology Upgrade would really help, he said.

The study estimates that 12,600 MW of other types of callable generation resources will have to be online to accommodate the 20% portfolio.

The ISO will need to develop keen wind and load forecasts and integrate them. Yet, even if forecasts are available five minutes ahead, wind could vary by hundreds of megawatts within the time it takes to respond.

The need for regulation to maintain current cycle frequency will require state-of-the-art equipment and forecasts and control operators with real-time information.

Improvements to the existing generation fleet, with the addition of quick-start units and development of energy storage devices, such as flywheels and pumped storage facilities, will be increasingly in demand.

Coordination of imported and exported energy with the Bonneville Power Administration and other operators will be required.

Brian Hitson, with PG&E Corp. subsidiary Pacific Gas and Electric Co., said that while the report contains a "mind numbing" array of graphs and information, he recommended further study. Hitson called for a study of costs -- which the report did not delve into -- to develop a supplemental stack of generators and other integration costs. He noted that the study may have been overly optimistic about the ability of existing resources to be used since a number of steam units are ready to be retired, and new units may not be as flexible as the old ones.

Also, Hitson noted that federally mandated reliability requirements will be more rigorous and introducing large amounts of wind into the system may make meeting those standards more challenging.

Monsour said there will have to be significant market changes to address operational issues and that further study will have to analyze existing facilities, including hydropower, which has its own variables.

Edison International subsidiary Southern California Edison Co.'s Wes Williams said that impact on meeting the renewable portfolio standard requirements despite wind curtailments will have to be examined. The PRS requires that utilities sell 20% of their energy from renewables, as measured annually.

Further, if the state moves to a 33% portfolio, the costs of integrating wind will increase at a steeper rate, he said. Williams emphasized the importance he thought the report would play in key state policy issues.