Upgrading the grid has been an issue for some time considering that most lines are well over 20 years old and deliver power at relatively low voltage levels. A panelist at a recent AWEA Wind Transmission Conference remarked that one stretch of cable in his service area was built in the Taft administration and needs frequent maintenance. What’s more, said another, the national grid loses some 350 billion kWh each year, about 8% of the total generated power, as a result of low-voltage and inefficiencies.
Session facilitator Jimmy Glotfelty, Executive VP for Clean Line energy Partners, began the discussion by recalling a utility getting “beat up” for “gold plating” its transmission system as part of the nuclear build out a few decades ago. “But if we did not have the higher voltage lines, 500 kV and 765 kV systems, we would be in deep trouble now,” he says. So what is the right size for a wind transmission line and how long should it last?
Weighing the question provoked several comments. For instance, when building wind transmission lines, it’s necessary to make sure they stand the test of time. “They could hang there for 60 years or so,” says Mike Heyeck, Senior VP Transmission for AEP. “Although 60 years seems long, you don’t want to build for five years and endure rounds of upgrades because that costs more in the long run.” Heyeck says some areas of the country are stuck on 345 kV, and will build what the regional transmission organization or the planning authority wants. But that can lead to a lot of series capacitors and shunt compensation devices that don’t last 40 to 60 years. They are maintenance hungry and need replacing. Although they work, capacitors in series are subject to failure. “You really need to look at the horizon,” he says. If it is five years out, you’re likely to build something good for five, but it won’t last 20.”
Consider too the 350 billion kWh lost in transmission and distribution. “We can do better. As we upgrade transmission lines, we should make sure it is more efficient. Higher voltage wind transmission is efficient. Unfortunately, we have driven manufacturers to a least-cost scenario. Building efficiency in may call for a higher initial cost, but over its service life, transmission will be less expensive to consumers.”
Merchant transmission projects, those whose costs are spread not across a broad retail consumer base but instead sold via bilateral contracts with interested shippers, provide another perspective. “Most merchant projects will be financed on the basis of the revenue guaranteed by the capacity contracts it enters into, which will be based on a certain size,” says Pattern Energy’s Director of Asset Operations and Maintenance Chris Shugart. He recalled that FERC in a recent formal request for comment asked if the Commission should get involved with sizing of merchant transmission projects by dictating ideas or making sure there is surplus capacity for anyone who wants it. “Our position is that all the right commercial drivers are there to build what’s needed, so there is no need for FERC to intervene,” he says.
There is a challenge in over-building for future needs in this business model, however, because most financial structures do not have the luxury of planning for the capacity needed in 10 years. Merchant transmission projects are driven more toward what is needed or contracted on day one, and once built are difficult to expand. However, the shippers contracting for the capacity on these kinds of projects can be forward looking in determining the quantity of capacity they subscribe to, thus ensuring adequate capacity for their own current and future needs.
A group of three CapX2020 projects in Minnesota were proposed primarily as single circuit 345 kV based on traditional utility economics, the kind of analysis usually accepted by a public-utility commission in a certificate-of-need proceeding. “During the proceeding it was proposed by multiple parties that we upsize our project to double circuit, to double the capacity,” says Great River Energy’s VP Will Kaul. The Public Utility Commission approved the up-sizing. Their rational: You only get one chance to do this so let’s oversize it. “We ended up with a double-circuit-capable structure and we are single circuiting most of it to begin with, but will be able to string other conductors later as needs dictate.”
According to Kaul, planners at the Midwest Independent System Operator, have expressed frustration with the short 20-year planning period. “You get a different answer for transmission size when you plan for a longer period, and the longer periods add value to transmission projects.” WPE
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