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Texas is moving closer to the establishment of five Competitive Renewable Energy Zones (CREZs), which proponents say could double windpower in the USA, and as Lyn Corum reports, the wind industry in the Western USA could also be set for a major boost, as plans for major transmission initiatives move forward.

Lyn Corum

Renewable resource developers face a conundrum in the US. There's plenty of wind and sun, but there is no transmission to bring their power from remote areas to rich markets. So why invest in renewables if it is impossible to find a market for the power generated? And from the transmission side, why build transmission if there is no generated electricity to move to market?

Texas is tackling the issue head on by pioneering certain areas rich in renewable resources as Competitive Renewable Energy Zones (CREZs), which will hopefully lead to the construction of transmission.

Away from Texas, and in the Western USA (also potentially rich in wind resources) there have been countless false starts. But now, three major transmission development efforts created in the past two years by various utility groups have evolved into to. And what is emerging is one intertwined web, linking 7 southwestern states as four major players forge an agreement to work together.

The three projects are the Frontier Line, TransWest Express and a yet-to-be-named plan from PacifiCorp.

What would the projects achieve?

The goals remain the same for all the developments: meet growing electrical demand; improve overall electrical reliability; and create access for renewable resources as demanded by almost a dozen state-mandated Renewable Portfolio Standards (RPS). New research has also indicated that transmission lines can be built based on the economics of wind resources, instead of fossil-fueled resources.

All the transmission developments reviewed here are being led by utilities not in California but in Oregon, Idaho, Utah, Colorado, New Mexico and Arizona - and are being joined by private companies, Trans-Elect Development Company and National Grid. The plans all have an identical originating point - Wyoming, which is rich in coal and wind resources.

The proposed lines also want to tap into the wind, solar and geothermal resources in Colorado and New Mexico, and move the power generated there into Arizona's load pockets, also possibly including Nevada and southern California. Pushing the plans and promising development dollars is the Wyoming Infrastructure Authority, which was created to foster economic development by exporting electricity west out of the state.

In addition, there were two more new transmission projects announced in 2007 that want to cover territory not included in the first three proposed projects. One would pick up windpower from projects being planned for the eastern Colorado front range, and bring it south to New Mexico where it would be picked up b another new transmission line running along the southern ends of New Mexico and Arizona. These projects are the High Plains Express and SunZia, respectively.

Demand Exploding

The demand for renewable resources is heating up throughout the southwestern USA. And population growth projections indicate massive amounts of new generation will be needed by 2025.

Colorado projections indicate that by that date, growth in demand from that state alone will increase by 20,000 MW. Demand for renewable resources is being driven by state mandates for RPS standards; utilities must buy or produce a certain percentage of their deliverable retail electricity from renewable resources including wind, solar, geothermal, biomass or hydropower smaller than 30 MW.

Eight of the western states have RPS standards and most of the 17, if not all, offer tax credits for clean energy.

Typical is Colorado's new RPS standard requiring the investor-owned utilities to have 20% of their retail electricity produced from renewable resources by 2020; 4% must be from solar, half of which must be on site. The rural electric associations (and there are many) and municipal utilities must have 10% of their deliverable electricity derived from renewables by 2020.

New Mexico recently replaced its 2004 legislation, establishing it's own RPS standard. Now, investor-owned utilities must have 15% of their capacity generated by wind, solar, biomass or geothermal resources by 2015, and 20% by 2030. Cooperatives must reach a renewables goal of 5% by 2015. Since 2003, New Mexico's utilities have signed contracts and are purchasing 644 MW of wind resources, but they are only halfway to their goal.

So exactly how much must be developed to satisfy these requirements?

By 2020, 8 western states - California, Washington, Colorado, Arizona, Nevada, Oregon, New Mexico and Montana - will need 23,343 MW of renewables to meet RPS standards, according to the Union of Concerned Scientists. California will have the largest demand - 10,610 MW, with Colorado needing 2,396 MW and New Mexico, 1,282 MW. Arizona will need 2,004 MW. Fortunately, Colorado and New Mexico boasts a deep vein of potential renewables, especially wind and solar to serve that need, as well as Wyoming with its high wind potential.

The goal of the Western Governors Association, the organisation behind the Frontier Line, is to have 30,000 MW or wind, geothermal, biomass, solar PV and central station solar on-line by 2015. The reasons are economic as well as environmental. Western Governors want to stimulate jobs, as well as reduce greenhouse gases. But if all the resources available in the southwest were ready to produce power now, they could not get the generated electricity to markets, because transmission lines do not exist in the areas where the resources lie. And hence the dramatic need for new transmission.

The Transmission Projects

The Frontier Line

The Frontier Line was announced in early 2005 by the Governors of Wyoming, Utah, California and Nevada. The US $3.3 billion line promised to bring coal and renewable resources to California. Utility representatives and developers say several of the new projects should be considered segments of the Frontier Line.

David Olsen, with the Center for Energy Efficiency and Renewable Technology (CEERT) who worked on the Frontier Line's feasibility study, said PacifiCorp's proposed line, discussed below, comes very close to covering the same territory. Jerry Vaninetti, vice president of western development for Trans-Elect Development Company, agrees with Olsen.

A year-long feasibility study for the Frontier Line was released in May, and concluded that it has positive economic value under a variety of scenarios. The project would involve constructing up to 1,300 miles of high-capacity power lines to help the energy-rich Rocky Mountain States wheel as much as 12,000 MW of power to load centres on the west coast. The sponsors, all western utilities, intend to move on to a Phase II development study to define the project plan and narrow down the feasibility study options.

An issue plaguing this - and its replacement projects - lies with California, which is making it nearly impossible to import coal-generated power into the state. It is requiring that all imports match the emissions levels of combined-cycle natural gas-fired power plants. Currently the only exports from Wyoming, Colorado and New Mexico that will qualify, are their potential renewable resources.

The TransWest Express line

The TransWest Express line was announced by Arizona Public Service (APS) in October 2005. Salt River Project, a municipal utility in Arizona, Tucson Electric and Southern California Edison expressed interest in subscribing to the project. APS completed a feasibility study in late 2006 establishing the technical feasibility of bringing 3,000 MW from Wyoming to the southwest market. It would consist of two 500 kV DC transmission lines originating in the Powder River Basin, near to high-quality open range wind locations in Wyoming, and running through Utah to northern Arizona and New Mexico, with potential links to Las Vegas, Nevada and Los Angeles.

PacifiCorp's original proposal in late May 2007, with a price tag over US $4 billion, described two 500 kV lines totaling 1,200 miles originating in Wyoming and diverging in Utah, with the northern line going to Idaho and Oregon and a second line heading to the desert southwest. Each of the northern and southern routes would be capable of delivering up to 3,000 MW.

In mid-August 2007 APS, PacifiCorp, National Grid and the Wyoming Infrastructure Authority announced an agreement to combine TransWest's next development phase with that of the southern line in PacifiCorp's proposal. National Grid will take the lead on activities during the following six months, with a decision on the next steps to be taken in 2008.

The High Plains Express

The High Plains Express is being developed by a consortium of utilities, including Xcel Energy, and Trans-Elect Development Company, along with Tri-State Generation and Transmission Association, a multi-state rural electric cooperative, and the Western Area Power Administration. Recently, the Wyoming Infrastructure Authority and the New Mexico Renewable Energy Transmission Authority joined the project study.

The intent of the project is to develop 345 kV and 500-kV AC liens to run south from Wyoming down the Front Range on the eastern side of Colorado, to connect 2,000 MW - 3,000 MW of wind projects being developed in that area, to the grid. An initial feasibility study is to be completed this fall, according to Xcel Energy.

Jerry Vaninetti, Trans-Elect's vice president for western development, said the highest quality wind resources are located in southeast Wyoming where the High Plains Express project is to be built. "Wind is economically viable in the marketplace, and new renewable resources require new transmission," he said. He indicated the line could possibly be completed by 2016.

SunZia

The SunZia transmission line is being developed by the Southwestern Power Group, a gas-fired power developer headquartered in Phoenix, Arizona and subsidiary of MMR, a privately-owned construction services firm based in Baton Rouge, Louisiana. SunZia's footprint would run east-west from the southern end of the High Plains Express in New Mexico along its southern border, and across Arizona where it would eventually connect with lines being developed there.

Mark Etherton, president of PDS Consulting, is managing the SunZia proposal for the Southwestern Power Group. He predicts growth of 10,000 MW in the next 10 years in the Phoenix/Tucson, Arizona area, which will establish the need for the line. It is to be built in segments and completed in the 2013 to 2014 time line, he said.

Renewables' first transmission?

David Olsen, with CEERT, argues that building a transmission line dedicated largely to wind resources is entirely feasible. Using numbers produced by a task force of western utilities for the Frontier Line feasibility study released in early May. Olsen argues that large-scale renewable energy generation projects could economically justify major transmission projects with no initial participation by coal.

Once advanced coal generation and sequestration technologies are developed, they can take advantage of transmission facilities built initially for renewables, Olsen said. Further, Vaninetti points out that building a transmission line with wind in mind, allows wind developers to contract for firm capacity on the line, and overbuild for non-firm capacity.

The key, said Olsen, is overbuilding wind generating capacity along a transmission line b 10% to 20%, assuming that wind capacity factors are in the range of 35% or higher. For example, building 3,600 MW to supply a 3,000 MW-rated double circuit 500 kV line could increase loading to 58% - 60%.

Olsen presented a case where 3,600 MW of wind developed in Wyoming, would displace an equivalent amount of energy in California produced by 2,077 MW of combined-cycle gas-fired turbine operation. He based his calculations on the Frontier Line feasibility study's cost and performance data for a 2015 in-service year, in levelised 2006 dollars.

The cost to build the wind generation was calculated at US $46.90/MWh. The gas generation cost, including a greenhouse gas adder of US $16/MWh, was calculated at US $84.10/MWh, assuming a natural gas price of US $6.50/MMbtu. The cost to build an AC line was estimated at US $29.90/MWh, and a DC line at US $19.10/MWh. Other costs included US $3.00/MWh to integrate wind into the California system, and US $1.80/MWh for transmission losses. It was assumed utilities would finance the transmission line, and generation would be built with merchant financing.

Olsen said the difference between the wind and gas generation costs - US $37.20 - is large enough to to pay for the necessary transmission, assuming the higher-AC transmission cost of US $29.90/MWh, including a competitive rate of return on the overall generation-transmission project.

Olsen said regional differences in the cost of power drive the economics of the overall project. The break-even price for gas is US $5.45/MMbtu. That, or a higher price will keep wind generation competitive, Olsen said, noting that today's natural gas is US $8.00/MMbtu. Other sensitive regional differences include capacity factors of both wind and gas-fired generation, carbon price and project capital costs.

So what is to be made of these plans? Will any new transmission actually get built? Trans-Elect's Vaninetti put it this way: "Any new generation coming on-line in the west [will find it] difficult because no firm capacity is available. New renewables involves new transmission, and this is why Trans-Elect is involved." The common view in the industry is that something will get built, for sure.