By Michael Kuser

BOSTON — Approaches to transmission for offshore wind energy, including in Europe and Asia, seem to come in as many variations as do recipes for clam chowder in the U.S.

The different flavors came to light Tuesday when the Massachusetts Department of Energy Resources (DOER) hosted a technical conference to explore whether it should solicit proposals for a coordinated independent transmission network in the state for offshore wind generation.

The Massachusetts DOER hosted an offshore wind transmission technical conference in Boston on March 3. | © RTO Insider

The approaches can be divided into two main camps, as distinctive from each other as creamy New England clam chowder (served at the café near the venue) and the Manhattan variety based on tomatoes.

One side favors generators developing the transmission — the generator lead line, or radial system. The other favors independent transmission ownership, or a network system.

People have strong opinions on the transmission issue, just as they always have had about food. In 1939, for example, Maine Rep. Cleveland Sleeper proposed a bill to outlaw tomatoes in clam chowder.

State Gatekeeper

DOER’s offshore wind study, released last May, looked at the impact of the state doubling its offshore wind goal to 3,200 MW. It recommended the department “conduct a technical conference … and if necessary, issue a separate contingent solicitation for independent transmission in 2020 prior to additional solicitations for offshore wind.”

“As we pursue offshore wind as a key element of our climate change strategy, it’s essential that we have the opportunity to continue to fine-tune our approach so it’s cost-effective [and] regionally coordinated, and so we can make the best, most environmentally appropriate decisions around our shared ocean resource,” Massachusetts Energy Secretary Kathleen Theoharides said. “The critical issue of transmission is often overshadowed by the focus on offshore development, but not so today.”

Cash Factors

Massachusetts Clean Energy Center Director for Offshore Wind Bruce Carlisle said there are 26 GW of proposed projects up and down the East Coast, with more than 9 GW in contracts awarded so far.

Bruce Carlisle, Mass. CEC | © RTO Insider

“It’s easy to lose sight of the role that transmission plays in connecting these generators to the grid,” Carlisle said, pointing out that significance in the estimate that transmission makes up 25% or more of capital expenditures for any offshore wind project.

The distance from the shore will always have a significant impact on transmission costs, but more important is the increasing size of projects, which seems to lean toward using HVDC over AC, said Alastair Mills, a specialist on renewable energy integration with Siemens.

“In the U.K., we’ve moved from 100 MW per cable circuit and are now set at 400 MW per cable circuit in less than 10 years,” Mills said. “We are therefore looking at the real boundary between AC and DC technology.”

Projects in the U.S. now average from 800 to 900 MW, while a new one in the U.K. is set at 1.2 GW, which will be connected with DC for the first time, he said.

“The trend is clear: The generators are getting bigger; the projects are getting bigger; and we need to be ready for that in the future,” Mills said. “The biggest trend at the moment is the levelized cost of energy and the reduction in that cost. We’re seeing targets where we wanted to have below 100 cents/kWh, which have been reached well ahead of schedule.”

ISO-NE is “really busy now with offshore wind,” and wind makes up more than two-thirds of the 20,927 MW in the interconnection queue as of January 2020, said Al McBride, the RTO’s director of transmission strategy and services. The offshore figures from his presentation showed 4,160 MW for Connecticut, 8,460 MW for Massachusetts and 880 MW for Rhode Island.

The RTO last month presented its latest study results on integrating up to 8,000 MW of offshore wind into the regional grid, analysis requested by the New England States Committee on Electricity (NESCOE). That and a separate offshore study requested by Anbaric should be completed by the third quarter, McBride said. (See ISO-NE Planning Advisory Committee Briefs: Feb. 20, 2020.)

“There are or have been historically large generating stations located along the coast, some of which are retiring or have retired, and that is an advantageous system for us in our ability to interconnect generation that could come in from offshore,” McBride said. “Compared to other regions that don’t have quite this coastline and historical infrastructure, we’re fairly well situated.”

Developers have proposed interconnecting up to 1,200 MW at various points along the coast, from Barnstable and Brayton Point in Massachusetts, to Kingston, R.I., and Montville, Conn.

Integrated Process

The U.S. Bureau of Ocean Energy Management has exclusive leasing authority on the outer continental shelf, “and a lease is not only to develop generation projects, but it comes with a pertinent right to have one or more transmission easements to get basically the long extension cord from the generation facility to the shore,” said attorney Mark Kalpin, of Holland & Knight.

“It’s an integrated process that BOEM has set up already in terms of how to build a project,” Kalpin said. “So when you do your site assessment plan or your construction and operation plan, you’re really saying this is the entirety of the project that I want; not only the offshore component, but everything necessary to get it to shore.”

An independent transmission developer also can apply to BOEM for a right-of-way grant or right-of-use easement, but that application process would not cover the activities of the generation developer, he said.

“So right off the bat, there’s a little bit of potential disconnect,” Kalpin said.

Laura Manz, Navigant | © RTO Insider

Laura Manz of Navigant previously helped CAISO develop $8 billion worth of transmission in California for renewable generation development.

“Renewable resources are remote from load centers, that’s a fact, so it’s just how we want to have the electrons move,” Manz said.

It’s important to achieve an optimal solution when looking at congestion in a cost-benefit analysis, she said.

“It might be better to just not pay for that upgrade that will completely eliminate congestion, but for one that can sustain congestion once in a while,” Manz said. “I think most of the RTOs, especially in this area, are pretty good at looking at that.

“And then we have the public policy upgrades, which is where this gets into a bit of a mess when you’re in a multistate RTO and it’s not really clear whose public policy gets the price tag.”

Connecticut regulators in January convened a public hearing to examine whether ISO-NE’s wholesale electricity markets are really geared to serve the state’s clean energy objectives after determining that out-of-market actions resulted in increased costs to Connecticut ratepayers. (See Connecticut Weighs Pros, Cons of ISO-NE Markets.)

Left to right: Stephen Pike, Mass. CEC; Ksenia Kaladiouk, McKinsey & Co.; Alastair Mills, Siemens; Alan McBride, ISO-NE; Mark Kalpin, Holland & Knight; and Laura Manz, Navigant. | © RTO Insider

Limited interconnection points are not a phenomenon limited to offshore wind, she said.

“What we see on the West Coast is because we’ve had the once-through-cooling retirement mandate, there have been some locations where previous coal-fired power plants, fossil fuel-fired power plants and now our nuclear plants are retiring in those shore locations, so there are some places to drop your offshore wind,” Manz said.

She encourages developers to start with an injection study to see where it can be done without an upgrade, followed by an integration study to look at the chances of curtailment.

European Lessons

Ksenia Kaladiouk of McKinsey & Co. delivered lessons learned in Europe, highlighting different operational models in Denmark, Germany, the Netherlands and the U.K. — with the U.K. most similar to Massachusetts, so far, in letting developers lead site and radial transmission development.

Ksenia Kaladiouk, McKinsey | © RTO Insider

Denmark and the Netherlands both have the state build and own the radial transmission, while Germany has a network transmission system for developers to tie into offshore.

“If we look at where Massachusetts and the East Coast are today, you could say that we are headed in 2030 [24 GW] to a place where Europe is right now [29 GW] … but the situations are not identical,” Kaladiouk said.

“We’ve learned a lot, not just in regard to costs coming down and opportunities for technical innovation, but also in terms of what works from a market standpoint and what works from a regulatory standpoint,” she said.

“If we do go for a model where the developer is not responsible for transmission, what does it mean to actually align incentives properly?” Kaladiouk said. “Are they built in a way that actually minimizes outages? Are they front-loaded with certain costs or redundancies, or are you going to do that on the back end?”

Though the continental European system has seen lower borrowing costs and a stronger mechanism for compensating generators when needed, “we’re not co-optimizing development, so if you do have a developer building out both pieces of the system, do you actually see more coordination? Do you see stronger incentives to build on time?” Kaladiouk said.

Regional Effort

DOER Commissioner Patrick Woodcock kicked off the afternoon session by noting that “we do have some other states here — New Hampshire, Connecticut, Rhode Island and New York I believe is participating online.”

Patrick Woodcock, DOER Commissioner | © RTO Insider

New York Gov. Andrew Cuomo is now pushing a bill that would allow the state to procure “submarine transmission facilities needed to interconnect offshore renewable generation resources to the state’s transmission system.” (See NY Renewable Supporters Push for New Siting Agency.)

“We really have found that [planning for offshore wind] requires participation from the entire region, and that was reflected in the New England States Committee on Electricity request for the economic study,” Woodcock said. “We look forward to continuing that partnership with the other states.”

Woodcock thanked stakeholders who submitted comments for the conference and said the department would be making a second request for comments after the conference.

“I assure you that our policy response will likely disappoint a lot of you,” Woodcock said. “It seems that there are a lot of strong opinions on this topic, and we do look forward to giving clarity to the marketplace on how we’ll be designing future” requests for proposals.

Getting to Shore

Joanna Troy, DOER director of policy and planning, outlined the legal background and statutory authority for the agency regarding offshore wind energy and related transmission procurement.

Joanna Troy, DOER | © RTO Insider

She emphasized that DOER “has not made a decision yet on whether to authorize a separate and independent offshore wind transmission solicitation.”

Perhaps not surprisingly, the offshore generation contractors were openminded about independent transmission developers but tended to favor the status quo for now, at least to get the industry rolling.

“There’s no doubt that if this region fulfills its offshore wind potential … at some point in time we have to look at integrated grid solutions,” Vineyard Wind CEO Lars Pedersen said. “The biggest issue we face is actually the onshore grid … which is not built to take off all the potential offshore wind energy we can deliver, and at one point in time we need a regional approach … that accommodates the multi-gigawatt scale of offshore wind.”

“What we’re talking about here … is a solution looking for a problem,” Pedersen said. “If you define success as clean, affordable energy at a rapid scale, while you continue to have the buildout of an industry — this will not deliver it.”

Lars Pedersen, Vineyard Wind | © RTO Insider

Pedersen said that any independent transmission developer coming into Vineyard Wind’s projects now would face a “very, very complex process,” which would make it extremely unlikely that the independent company could win on cost or project risk.

Theodore Paradise, Anbaric senior vice president for transmission strategy, said, “If your goals in Massachusetts are a few thousand megawatts, then maybe this works. But there’s a fallacy in the thinking around, do you do radials or do you do meshed networks?

“The U.K. is moving toward meshed networks for fewer ecological impacts and increased savings to consumers … because their goal is more than just a radial world.”

The region only has to look at onshore wind bottled up in Maine, he said: “Onshore wind in Maine is dead because it was expedient [to build before upgrading nearby transmission], and for that moment, it looked like the cost-effective choice,” he said.

“An example of this would be if I’m doing one project into the cape, I might do a 115-kV network for 1,600 MW. I spend $500 million doing that, and I think about my next project,” Paradise said. “I have to tear that down [and] I need to build a 345-kV. I should have built a 345-kV to begin with.”

Theodore Paradise, Anbaric | © RTO Insider

Stranded cost is not the issue, but lack of planning, he said, citing how Texas built out a transmission network for wind and the developers came with their own proposals, unsubsidized.

“If you want to make a choice here for the 1,600 MW, you need to be thinking about where we are,” Paradise said.

He cited a Brattle Group study from last September that said in order for New England to achieve an 80% reduction in greenhouse gas emissions by 2050, the region will need to procure 3,000 MW of wind per year through 2050 if it’s going to electrify the transportation sector and home heating.

“And if you’re going to do that, you’re not going to do that with radials,” Paradise said. “By the way, we’ve already decided that in this country, and that is we have separate generation and transmission. We separated the two. The ocean isn’t different from on land; it’s still the grid.”