AUSTIN, Texas — The Great Plains Institute last week convened state officials and other stakeholders from across the Midwest for a one-day workshop exploring trends in SPP’s footprint. The workshop, which was streamed on the Internet, featured multiple perspectives on ongoing challenges and included panels on wind development and SPP’s proposed expansion with the Mountain West Transmission Group.
The Great Plains Institute convened experts, state officials, and stakeholders for a one-day workshop that explored energy developments and trends in SPP’s footprint. | © RTO Insider
SPP Continues to Manage Growing Wind Resources
Lanny Nickell, SPP’s vice president of engineering, recalled a time less than 10 years ago when the RTO thought if it ever exceeded 25% wind penetration, “it’d be a miracle.”
It’s the miracle that keeps on giving. SPP, the first North American RTO to exceed wind penetration levels of greater than 50%, saw that level reach 56.25% on Dec. 4, when wind resources accounted for a record 14,150 MW of energy.
“We’ve exceeded [25%] by far, because of our large geographical footprint,” Nickell said. The RTO added the Integrated System in 2015 and is now working with Mountain West to add its entities to its membership rolls.
SPP has added almost 12.5 GW of wind capacity since 2010, giving it 17.75 GW of installed wind. With the addition of another 5.3 GW that have interconnection agreements but are not yet in service, the RTO’s wind capacity will exceed its minimum load of just more than 20 GW. Another 35 GW of wind capacity is under various stages of review in SPP’s generator interconnection queue.
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The RTO has approved $7 billion in transmission infrastructure since 2005 to accommodate the growth in wind energy, with another $3 billion planned. Half of the build are 345-kV facilities; the rest are primarily 100- to 300-kV infrastructure.
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“We don’t add transmission because we like transmission. We do so because it’s beneficial and helps keep the lights on,” said Nickell, who hinted at the need for 765-kV infrastructure in the future. “In order to reliably deliver the amount of wind that’s been requested, we’re probably going to need something more than just 345-kV.”
Nickell compared one of SPP’s windiest states, Kansas, with Denmark as an example of the RTO’s operational capabilities. He said Denmark had 116% wind penetration in 2015 and noted, “You can’t do that unless you’re exporting wind.” But when Kansas hit a wind penetration level of 106% on April 24, it wasn’t exporting wind out of the RTO.
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“It’s because we have a regional transmission organization,” Nickell said. “We can facilitate [those wind levels] and still keep the lights on.”
As more wind energy comes online, Nickell said, wind developers must face the question of what to do when energy exceeds load. “Exporting it does make sense, unless wind developers want to have their wind curtailed,” he said.
Landowner Opposition Formidable Obstacle to Tx Projects
Several speakers discussed the opposition Clean Line Energy Partners has faced from landowners and regulators in its plans to connect renewable resources with urban centers via long HVDC transmission lines.
“You’re going right back to the not-in-my-backyard thing,” said Ted Thomas, chair of the Arkansas Public Service Commission. “That’s causing intense pushback. ‘My granddaddy had this land. This is our family property. I don’t want this big, honking thing coming through here. You don’t understand, this property is not for sale.’”
Stoll | © RTO Insider
“Siting is difficult,” agreed Missouri Public Service Commissioner Steve Stoll. “Anytime you’re dealing with private rights and eminent domain, it’s difficult. You can say you’re helping our area by giving us the ability to sell our homes and attract business, but [the landowners] don’t see much value in it.”
“But even if [interregional] projects are built, it doesn’t draw down that massive supply of wind in the Oklahoma Panhandle,” Thomas said.
Nickell said another impediment to selling wind outside SPP is the cost of the transmission facilities themselves.
“It boils down to the question of who pays,” Nickell said. “Should the customer who wants to buy that energy pay for the upgrades to deliver it, as well as the cost of renting the transmission facilities? Or should there be a recognition of benefits to others that helps fund these projects?”
“SPP will have to grapple with what’s a fair cost to move wind out of the SPP footprint, and how that should work,” Stoll said. “It’s the biggest challenge since national electrification.”
Wind’s Economic Benefits Cross Party Lines
Xcel Energy’s Steve Beuning, one of the leaders of the Mountain West’s proposed membership in SPP, thanked the RTO for working with the Rocky Mountain entities and helping them increase their access to renewable resources.
“There’s an operational benefit that comes from the pooling of resources,” said Beuning, Xcel’s director of market operations. “That expansion of balancing diversity into a broader footprint is different. It didn’t exist when other RTOs were formed.”
“Any RTO can put a market together. I don’t know that we do a market any better than PJM, or any better than MISO, or any better than CAISO,” Nickell said. “From what we’ve been told, it’s how we do what we do that was important to the Mountain West group. They appreciate our stakeholder-driven culture. They appreciate our collaborative nature, the relationship-based culture.”
Ackermann | © RTO Insider
At some point, the Colorado Public Utilities Commission will be asked to give its regulatory approved to the merger. PUC Chair Jeff Ackermann said he is viewing the expansion in three parts.
“There’s the part about reliability, the part about transmission and the market,” Ackermann said. “It comes through really clear … that the culture and how SPP chooses to operate spills into the governance subject. I’ve heard a lot of good stuff about that pursuit of consensus, but the world we live in doesn’t lead to consensus. As you add more parties to things, and they haven’t had experience with discord, how is that done? How do you deal with discord? How do you factor in whatever is the next iteration, and how does that fit into the market?”
Moore | © RTO Insider
“Bringing those distant resources to urban centers is why we value those regional organizations,” said the National Resources Defense Council’s John Moore, director of the Sustainable FERC Project. “With all of the discussion around this integration, you ask, ‘Is this good for the customer?’ We hope so. We don’t want to see the balkanization that you see in the east, with interregional barriers … the last thing we want to see in the west is three or more RTOs developed.”
Tutos | © RTO Insider
Speaking on a panel on wind power, Vanessa Tutos, director of government affairs for EDP Renewables, said the economic benefits of renewables are clear, “irrespective of your political persuasion.” She cited a two-thirds drop since 2009 in the cost of wind energy, $128 billion of private investment and more than 20,000 wind industry jobs.
“Job opportunities are coming back to these rural areas,” Tutos said. “When you have a wind farm, you maintain the agricultural capabilities. The wind turbines, though they alter the landscape, allow [farmers] to maintain that form of life.”
But while the wind industry provides economic benefits, it doesn’t do it alone, Tutos said.
Mike Gregerson of Great Plains Institute (left) and Gaw | © RTO Insider
“Transmission planning is very important. I love the idea of a 765-kV overlay. I know reliability organizations don’t work that fast … but what wind generation is trying to do is ensure [that] the maximum amount of wind can be integrated in a reliable and efficient way. SPP has a huge opportunity to help implement policies to help reach a 21st century economy.”
“If you don’t have adequate transmission, things will grind to a halt,” said the Wind Coalition’s Steve Gaw. “If building transmission results in a lower cost of power, you’re doing your consumers a disservice by not examining [those options]. We have not gotten close to what low-cost energy would do to the [SPP] footprint. It’s not just transmission capacity; it’s also the scheduling of power across interfaces, and how much you have to pay for energy in pancake rates.”
Alternatives to DOE NOPR
Several speakers suggested there are better alternatives to the Department of Energy’s Notice of Proposed Rulemaking to provide price supports to coal and nuclear generation. (See McIntyre Takes FERC Chair; Wins Delay on NOPR.)
Rob Gramlich, a consultant who served as an adviser to former FERC Chairman Pat Wood III, said he expects the discussion in D.C. to become focused on price formation and market-based approaches.
“Obviously, the proposed resiliency rule is a major focus,” he said. “But since 90% of [the rule’s] eligible generators are in PJM, and PJM is more committed to markets than anyone else, it’s hard to imagine PJM doing anything to upend those markets. I’m not sure what we get from resiliency that we didn’t get from other new rules.”
“If it was me running the whole thing and giving them advice, it would be 180 degrees from what [the Trump administration is] doing,” Thomas said. “They ought to be embracing the fact that markets serve consumers. Markets serve consumers, and the administration should not squander opportunities to make that point.
“We should let the NERC engineers tell us when we have problems. We always say we might have a crisis in 30 days. Well, we had a crisis. It was the polar vortex, and it got to the edge of reliability problems. The next year, we had a weather event that came close to the polar vortex, but it didn’t cause a problem. Why? Because we had engineers study the problem and come up with solutions. Let the markets serve consumers, and let engineers tell us what the problems are.”
Stoll suggested another potential solution to the reliability issue: small (50-MW) modular nuclear reactors (SMRs) that are brought onsite already assembled. Taking great pains to say he was not shilling for the technology, he offered up SMRs as a source of baseload power.
“I wouldn’t want to put all our eggs in the natural gas basket. We don’t know what’s going to happen with natural gas,” Stoll said. Referencing the Utah Associated Municipal Power Systems’ work with SMRs, he said, “They rely on coal, but they’re going to put the first [SMRs] in their footprint. If everything goes right, they plan to replace their coal plants with SMRs. It’s a very interesting technology, and a technology the rest of the world is working on.”
Thomas agreed, saying the SMR market will likely be ready by the mid-2020s.
“We don’t need to be focused on subsidizing nuclear energy. We probably have a window with gas that will take us to that,” he said.
— Tom Kleckner
