Integrating Solar and Wind Power Challenges and Solutions

Rob Wolaver

December 9, 2010

Topics

• Tri-State Overview

• Integration Challenges

• Integration Solutions

Tri-State Overview

Tri-State Member System

Tri-State is a not-for-profit, wholesale power supplier owned by 44 electric cooperatives and public power districts serving a population of approximately 1.5 million people.

Tri-State’s mission is to provide reliable, cost-based electric energy to our member systems consistent with cooperative principles

Tri-State At-a-Glance

• Annual operating revenue $ 1.2 billion

• Assets $ 3.7 billion

• Average wholesale rate 6.5 cents/kiloWatt-hour

• Member peak demand 2,447 MegaWatts

• Member service territory 250,000 square miles

• Employees 1,200

Tri-State Service Area

Generation Resources

Baseload resources

Natural gas resources

Solar resources

Wind resources

Hydropower

Internal Transmission Constraints

US Census - Metropolitan Areas

Interconnection Boundaries

RPS Mandates

• Applies to Tri-State

members in Colorado

and New Mexico

• 10% renewable energy

in 2020

• Assist members in meeting state Renewable Portfolio Standard (RPS) requirements

• Further diversify resource portfolio

• Gain operational experience with renewable resources

Tri-State Renewable Project Objectives

Renewable Generation Benefits

• Carbon Free

• Fixed Cost – Hedge against rising gas prices

• NOX, SO2, Particulate, Mercury

• Jobs

Renewable Project Background

• Issued Request for Proposals in December 2007

• Received 50 Bids from 37 entities - 4,200 MW

– Wind, Solar, Biomass/Biogas,

– Tri-State option of Small Hydro

• Developed shortlist

• Selected projects for negotiation

• Executed two Power Purchase Agreements

Cimarron Project

• 30-megawatts AC

• Owned by subsidiary of the Southern Company

• 500,000 thin film panels

• 250 acres near Springer, N.M.

• 25-year PPA

Kit Carson Wind Project

• 51 MW Wind Project – 34 GE 1.5 MW Turbines

• Owned by Duke Energy

• Burlington, Colorado

• 20 year PPA

Project Characteristics

• Proven Technology

• Proven Counterparty– Experienced

– Financially Sound

• No new transmission required

• Manageable size

• Significant incentives

• Nature of incentives

Integration of Renewable Resources

Integration: Basic Tenets

Supply = Demand

Generation = Load

Unique Electricity Attributes

No Storage

Instantaneous

Typical Daily Consumption Pattern AKA “Load”

Tri-State: December 10, 2009

Evening Load Pick-Up:Lighting, Cooking, TelevisionMorning Load Pick-Up:

Lighting, Heating, Business

Typical Daily Generation Pattern

Baseload – Coal, Nuclear

Intermediate – Hydro, Gas

Peaking – Gas, Oil

Supply = DemandGeneration = Load

Generation Fleet and Transmission System Was Designed and Constructed for Low-Cost, Reliable Operation – for a World Where CO2 was not a Pollutant

Solar PV Generation – November 26

How Do Renewable Resources Fit?

How Do Renewable Resources Fit?

$!

Tri-State Load: Nov 29 - Dec 6

Tri-State Wind and Solar – Same Time

Variable GenerationIntegration Cost Components

• Fleet Dispatch Impacts

– Increased Level of Operating Reserves

– Startup / Shutdown Cycling

– Ramping / Wear and Tear

– Efficiency / Emissions

– Loss of Capacity to Regulation

• Curtailment Payments

Integration

• Variable/Intermittent Renewable

Wind/PV Solar

• Non-Variable

Hydro, Geothermal, Biomass, Solar/Thermal with Storage

Integration

• Integration of small amounts of variable renewable generation is easy

• Integration of large amounts is difficult and expensive – Diminishing Returns

• Wind is less expensive to purchase but much worse to integrate – much more random and skewed towards off-peak

Integration Solutions?

Variable Generation Integration

• Transmission (aka “The Grid”) •Constructed and Operated for

–Reliability

–Economic Transfers

–Transportation of project power to purchasers

• New role – Integration?

Distance and Size Drives Transmission Costs

TransWest

• One 600 kV DC

• 725 miles• $3 Billion

SunZia

• Up to two 500 kV

• 500 miles

• $800M - $1 Billion

High Plains Express

• Two 500 kV

• 1,280 miles

• $5 Billion Texas CREZ

• Multiple 345 kV

• 2,300 miles

• $5 Billion

New Development in 2011?

• Development of any new resources is difficult

– Recession => Demand is down

– Cost of market gas and energy is down

• Ability and will to support renewable projects has diminished

Uncertain Regulatory Environment

• Likelihood of national carbon legislation– De facto carbon tax

• State RPS– Multipliers

– What counts what doesn’t count

– Large hydro

– Import

– Local jobs

Possibilities / Solutions

• New Transmission

• National Standard Definitions

• Just Add Money !

– “Dump Energy” – Sell at any price

– “Spill Energy” – Don’t generate

– Gas generation is more flexible than coal

– Smart Grid

Closing Thoughts

• Affordable Electricity = Competitiveness

• Economic Slowdown

• Local Solutions to Global Climate Change