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Integrating Renewables

Ocean Renewable Energy:

Why Would Anyone Buy It?

John Schaad

Customer Service Engineering,

Generation Integration -

Bonneville Power Administration

Transmission Services

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Washington State Ocean Energy Conference

November 8-9, 2011

Bremerton, WA

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What is the Value of Ocean Energy?

1. Ocean Energy as an Alternative Ancillary Service for Balancing Wind Generation “Variability”

2. Offshore Ocean Energy as a “Non- Wires” Alternative to: 1)Building New 500-kV East-West Transmission to provide more ATC for New Wind Energy, and 2) Building costly coastal transmission system reinforcements such as new Static Var Compensators, and new 230-kV and 500-kV lines to serve coastal area load growth.

3. Ocean Energy -- Cost Comparisons showing cost-effectiveness for State Renewable Portfolio Standards Fulfillment ------ (WA, OR, CA)

4. Other Concepts?

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Growth of Wind in BPA Balancing Authority

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Behavior Traits Volatile Ramping Behavior

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BPA Balancing Authority Load and Total Generation

Winter 2011

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FCRPS (A Large, but Limited, Machine)

Demands on Federal Columbia River Power System (FCRPS):– Meet ESA requirements – Serve load– Meet non-power requirements– Support variable generation

BPA Balancing Authority uses FCRPS to supply Balancing Reserves required to integrate wind generation

FCRPS ability to supply balancing reserves is limited; it can supply roughly the following amount of balancing reserves for wind: 1000 MW of DECs and 1000 MW of INCs

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Increase the Pool of Balancing Reserves

The ability for the FCRPS to supply Balancing Reserves is limited. The greatest resource need is developing additional sources of balancing reserve capacity– Developing the ability to supplement the

FCRPS by acquiring balancing services from the region’s natural gas facilities is important.

– BPA began exploring this third-party supply concept in September 2010 with a three month purchase of 75 megawatts of DEC imbalance reserves from Calpine.

– BPA currently has an Request for Proposals asking for additional DEC bids.

– In the future, BPA will be looking at acquiring INCs along with DECs.

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Customer Supplied Generation Imbalance

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BPA has developed systems and processes to enable customers to self-supply a portion of their within hour balancing requirements from their own and/or contracted dispatchable resources for one or more wind plants. Under the CSGI Service:– Participant supplies its own Generation Imbalance.– BPA continues to supply load following and

regulation. Currently, approximately 1400 MWs of wind is

supplying its own Generation Imbalance, reducing the balancing reserves that BPA must supply by more than 150 MWs.

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Supplemental Service

The Supplemental Service allows wind customers to acquire balancing service that is of a higher quality than that supported by the BPA balancing resources which, when exhausted, result in DSO-216 curtailment/limit instructions.

Under Supplemental Service:– Wind customers may acquire and use additional

balancing reserves in addition to the balancing reserves provided by BPA.

– The additional reserve capacity for this service will be provided from non-federal resources either supplied by the customer or purchased by BPA on the customer’s behalf.

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1. Alternative Wind Balancing Resource

Ocean Energy as an Alternative Ancillary Service for Balancing Wind Generation “Variability”

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2. Possible Lower-Cost Alternative to Costly System Upgrades

Offshore Ocean Energy as a “Non- Wires” Alternative to Building New 500-kV East-West Transmission to provide additional ATC for New Wind Energy, or Adding New 500-kV Lines and Costly Static

Var Compensators to Support Load Growth and New Industrial Loads in Coastal Areas

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Wind farms are clustered along the Columbia Rivernear existing BPA transmission and new transmission projects

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3. Possible Lower-Cost Alternative for State Renewable Portfolio

Standards

Ocean Energy -- Cost Comparisons as a Resource for Fulfullment of

State Renewable Portfolio Standards ------ (WA, OR, CA)

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Based on BPA’s wind interconnection queue and work done by E3

• PNW and CA RPS targets would require ~10,000 MW of installed NW wind by 2020.

• Nearly 6,000 MW currently operating or under construction.

• Existing wind projects and wind interconnection requests to at least 14,400 MW.

• Significant exceeds 2020 regulatory demand.

• BPA has offered ~ 9,300 MW of transmission service to wind projects.

Wind Resources to 2020

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Conclusions

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Ocean Energy can provide a valuable addition to the PNW generation mix, with its unique,

consistent, more predictable characteristics -- which are very marketable.

As Wind’s contribution continues to grow, Ocean Energy can help provide needed Balancing and

ATC.

Integration of Ocean Energy presents some challenges.

Longer term solutions will involve:

• Integration of ocean energy into the FCRPS Operation

• New utility operational protocols and business practices

• Exploration of imbalance markets for Ocean Energy

• New Off-Shore Ocean Energy Storage Developments

• Other ideas and concepts?

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About BPAService area (sq. miles) 300,000(Primarily Washington, Oregon, Idaho, Western Montana)

Transmission circuit miles 15,215

BPA substations 263 Grand Coulee Dam

BPA is a Federal Power Marketing Administration in the U.S. Department of Energy

2010 Balancing Authority (BA) Statistics FCRPS/CGS BA Total

Nameplate Rating (MW) 21,600

Peak Generation (MW) 16,300 18,400

Average Generation (aMW) 6,900 8,000

Peak Load (MW) 9,800

Average Load (aMW) 5,900

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Your Feedback is Welcome!

John SchaadCustomer Service Planning & Engineering Bonneville Power AdministrationEugene, Oregonjgschaad@bpa.gov541-988-7421

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