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TOO MUCH OF A GOOD THING:THE DILEMMA OF RENEWABLE ENERGY OVERSUPPLY AND WIND ENERGY
DEVELOPMENT IN THE PACIFIC NORTHWEST
By
Andrew R. N. Phillips
I.INTRODUCTION
Humans have used wind to power our world for a quite some time.1 A long time
reallybut never quite like it is used today. Today the nations economy is powered by a
vast and complicated network of partially interconnected electrical grids2 that must
carefully balance the amount of electricity generated and the amount of electricity
delivered to its users. In recent years the electricity generated from wind in the United
States has increased dramatically from 5,593 MW in 2000 to 94,647 MW in 2010.3 The
electrical grid in Oregon has seen its share in this increase, as Oregon and Washington
have the fifth and six highest amount of wind generation capacity in the United States.4 In
addition to this wind energy, Oregon and Washington have significant amounts of
hydroelectric dams.5 Both wind turbines and hydroelectric dams benefit from large
seasonal variability and spring storm systems that bring wind to flow through the wind
turbines and rain and water to drain into rivers and flow through hydroelectric facilities.
1Humans first began using wind to power ships around 1000 B.C. KISSELL,THOMAS E.,
INTRODUCTION TO WIND PRINCIPLES 5, tbl. 1-1. By 200 B.C. wind machines were used inwhat is now Iran to pump water and grind grain.Id.2Id. at 20-21. The nations grids are split into three main grids called interconnects, TheWestern Interconnect, the Texas Interconnect, and the Eastern Interconnect.Id. at 151.3 U.S.DEPARTMENT OF ENERGY,ENERGY EFFICIENCY &RENEWABLE ENERGY, 2010RENEWABLE ENERGY DATA BOOK 58 [hereinafter RENEWABLE ENERGY DATA BOOK],available at http://www.nrel.gov/analysis/pdfs/51680.pdf4Id., at 63. Oregon and Washington each have 2104 MW of installed wind capacity.Id.
Id., at 89. Oregon has the nations third highest installed capacity of hydroelectric powerand Washington has the nations largest installed capacity of hydroelectric power.Id.
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In Oregon, however, many of the hydropower facilities are located in the same general
region as the wind turbines and both consequently may produce their maximum peak
amount of energy simultaneously while operating on the same set of transmission lines.
In about one out of three years this total peak exceeds consumer demand for electricity
for a month or more.6 This overlap in energy generation poses significant policy
dilemmas because one or both of these renewable electricity sources must be limited to
prevent the electric grid from becoming unreliable. Limiting the output of either
hydroelectric dams or wind turbines can have significant economic and environmental
impacts on their respective industries. This article explores the causes and implications of
this overlap and offers possible solutions to balancing these resources. At the heart of
solving the dilemma posed by wind power is reducing wind powers variability and
unpredictability. Through a mix of improved policy, technology, and planning this
conflict can be resolved. This article explores these solutions and discussed methods for
further integrating unpredictable wind electricity generating into an electric system that is
largely built on seasonably varying and periodically constrained hydroelectric resources.
II.WHY DOES OVERLAP OCCUR?
When and where does the wind blow? When does the water swell the Columbia
River? These are the basic questions that any study of electricity oversupply and wind
integration in the Pacific Northwest must consider.
Wind is an intermittent and unpredictable resource. There are, however, general
principals that help determine when and why the wind blows. Wind is influenced
6BONNEVILLE POWER ADMINISTRATION,NORTHWEST OVERGENERATION:
AN ASSESSMENT OF POTENTIAL MAGNITUDE AND COST 2(2011), available athttp://www.bpa.gov/corporate/AgencyTopics/ColumbiaRiverHighWaterMgmnt/BPA_Overgeneration_Analysis.pdf.
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primarily by pressure and wind is created as air moves from one pressure to another. 7
Wind generation, therefore, can surge when air pressure changes, and consequently
surges dramatically as storm systems move over and through wind turbines. Wind is also
affected by temperature and slows in the Pacific Northwest in periods of extreme heat or
extreme cold.8
Wind is also affected by geography. The best wind resources for generating
electricity are those that have strong winds with smooth topography and low vegetation
to minimize turbulence.9 Wind can also be amplified as it passes through certain areas
that channel the wind into a corridor much like a funnel, such as the mountain gaps in
Oregons ranges.10 Coastal areas also have a significant amount of wind energy
potential.11
Lastly ridges perpendicular to prevailing winds in the Basin and Range areas
of southeastern Oregon have significantly strong wind resources.12 Figure 1 shows the
diversity of wind resources in Oregon and reveals the patterns just discussed. The darker
colors indicate a higher wind speed, translating into a more cost efficient and productive
wind turbine. In Figure 1 below, you can see the high wind speed along the cascades
running roughly down the 122-degree longitude line. Figure 1 also shows the Basin and
Range areas as a potentially large resource for wind development.
7 KISSELL, supra note 1, at 33.8
NORTHWEST POWER AND CONSERVATION COUNCIL, THE NORTHWEST WINDINTEGRATION ACTION PLAN 18 (2007) [hereinafter NORTHWEST WIND INTEGRATIONACTION PLAN], available athttp://www.nwcouncil.org/energy/Wind/library/2007-1.pdf9Id., at 15
10 KISSELL, supra note 1, at 35.11Id.12
Id.
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Figure 1. Annual Average Wind Speed in Oregon as measured 80 meters abovethe ground.13
Despite the geographic diversity of wind resources in Oregon, however, much of
the installed wind turbine capacity is located along the Columbia River just east of the
Columbia River Gorge.14 The area east of the Columbia River Gorge can be found in
Figure 1 between 121 and 119 degrees longitude and 46 and 45 degrees latitude. As
Figure 1 shows, this area is one of the better places for wind in Oregon, but is by no
means the only place with potential for wind development. In fact there are many other
13 U.S.DEPARTMENT OF ENERGY,NATIONAL RENEWABLE ENERGY LABORATORY,OREGON -ANNUAL AVERAGE WIND SPEED AT 80 M,http://www.windpoweringamerica.gov/pdfs/wind_maps/or_80m.pdf (last visited April 1,2012).14 NORTHWEST WIND INTEGRATION ACTION PLAN, supra note 8, at 16. Forty percent ofthe wind resources in the Northwest are located just east of the Columbia River Gorge. Id.
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areas with better wind resources for possible wind energy development in Oregon.15 The
placement of wind turbines is not driven solely by the quality of the wind resources there.
Instead the wind development east of the Columbia River Gorge is driven by the
availability of high-voltage transmission lines that ultimately carry electricity to
consumers. While considerations such as sufficient space, absence of sensitive species,
habitat areas, cultural features, and aesthetic qualities are important to successfully
siting wind energy projects, nearby transmission lines are so critical to wind energy
development siting that it has emerged as the key driver of [wind] project location in
the Northwest.
16
It is no coincidence that transmission lines run along the Columbia River. The
hydroelectric dams along the Columbia River are operated by the Bonneville Power
Administration (BPA) and have historically provided a considerable share of electricity
to Oregons electric market. Currently 44% of Oregons electricity comes from
hydroelectric dams,17 many of which are located along the Columbia River. Several
transmission lines exist to carry this hydropower electricity to Oregons main population
centers east of the Cascades. The transmission lines that are used to carry the
hydroelectrically generated electricity are also the same transmission lines that wind
power producers have flocked to for transmission of their wind-generated electricity.
It is not only that the transmission lines from these wind and hydro facilities
overlap geographicallythe production of electricity that must be carried over these lines
15Id., at 17.
16Id., at 15, 17.
17 OREGON DEPT OF ENERGY,STATE OF OREGON ENERGY PLAN 27, fig. 8, available athttp://www.oregon.gov/ENERGY/docs/reports/legislature/2011/energy_plan_2011-13.pdf.
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can also overlap temporally. Waterlike windis still subject to variability. Much of
the water that runs through the Columbia River falls as snow that later melts and
produces large volumes of annual spring run off that must flow through the dams.18
Spring storm systems also bring additional variation to water availability. The same
spring storm systems that produce wind also create precipitation. When this precipitation
falls as rain the resulting water must also flow through the several dams along the
Columbia River. When these events occur both the wind turbine and hydroelectric
generation are producing large amounts of power. Because significant amounts of water
must pass through the dams electrical generating turbines and because of the limitations
discussed later in Part III, these unexpected surges in wind output occur when
hydroelectric facilities are least flexible and least able to reduce their generation.19
BPA estimates that overgeneration will occur and last more than one month in
one out of three years.20 If both dams and wind power producers insist on operating at
full capacity during these events the overall reliability of the electrical grid will suffer and
lead to inconsistent power supply. Because these events are so likely to occur on a
recurring basis the electrical system must develop policies to balance these two
renewable resources, and limit them accordingly.
18NORTHWEST POWER AND CONSERVATION COUNCIL,SIXTH NORTHWEST CONSERVATION
AND ELECTRIC POWER PLAN 6-17 (2010), available athttp://www.nwcouncil.org/energy/powerplan/6/final/SixthPowerPlan.pdf.19
NORTHWEST WIND INTEGRATION ACTION PLAN, supra note 8, at 25.20 BONNEVILLE POWER ADMINISTRATION,NORTHWEST OVERGENERATION:AN ASSESSMENT OF POTENTIAL MAGNITUDE AND COST,supra note6, at 2.
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III.HOW IS POWER LIMITED?
Because of the above overlap, the next question is how to limit the power from
either the wind turbines or the hydroelectric dams during times of oversupply. This
limitation can be done in a variety of ways depending on the method of generation. As
one might expect, the water that powers the dams is generally a more constant resource
and could theoretically be favored over wind resources in times of oversupply. Each set
of resources, however, brings its own complexities that make limiting eithers output a
complicated affair.
A dam operators discretion is limited in determining how much water to spill
because of the Endangered Fish Species passing through the dam. If a dam spills too
much water the Total Dissolved Gas levels in the water may harm the fish. If the dam
does not spill enough not enough water, then the dam impedes necessary fish passage.
The limitation ofa dam operators ability to strike a careful balance is particularly
difficult in times of oversupply when additional water cannot be spilled and there is
nowhere for electricity produced from the dam to go unless some non-hydro generators
are shut down.
Limiting wind power production on the other hand is physically easy to
accomplish, but economically much more difficult to achieve. The main incentives
driving the modern surge in wind power installationRenewable Energy Certificates and
the Production Tax Creditreward and incentivize maximum production because they
only pay if a wind power producer is actually creating and selling energy. The result of
these incentives is that wind power producers, unlike other power producers, have no
interest in curtailing productions in times of oversupply.
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A. Limiting Hydropower Production and its ConsequencesEndangered
Fish Passage and Total Dissolved Gas Levels
Hydroelectric dams are fairly simple in concept. Dams operate by storing water
behind the dam until a height differential is created between the water level behind the
dam and the level in front of the dam. Water is then run through a turbine below the dam
to generate the electricity and the water is released into the river. In hydroelectrically
developed systems such as the Columbia River water may flow through several dams and
generation turbines as it makes its way to the ocean. Water may also be spilled over the
dam without generating electricity or, where available, pumped up into additional storage
so it may run through the turbines at a later time when the power is needed.21
The fish that must flow through the dam, however, complicate the seeming
simplicity of dam operation and presents obstacles to both the fish and the dam operators.
Many of the fish that live in and pass through the Columbia River Basin are endangered
or threatened salmon and steelhead species22 listed under the Endangered Species Act.23
Salmon and steelhead are anadromous fish, meaning they are born in the freshwater
rivers, migrate to the ocean as juveniles, and later return to the freshwater rivers to
spawn.24 In order to move to and from the ocean the salmon and steelhead must be able to
pass one or more dams on the Columbia River. Juvenile fish pass these dams going
21See Part IV. B infra for further discussion of pumped storage.22 BONNEVILLE POWER ADMINISTRATION,MANAGING THE COLUMBIA RIVER SYSTEM TOHELP FISH 3 (2012), available athttp://www.salmonrecovery.gov/Files/Managing%20the%20Columbia%20River%20system%20for%20fish%20-%20Sept%202010.pdf. There are nine runs of salmon andsteelhead in the mainstream Columbia and Willamette rivers.Id.23 Endangered Species Act of 1973, 16 U.S.C. 15311544 (2006 & Supp. IV 2011).24 BONNEVILLE POWER ADMINISTRATION,MANAGING THE COLUMBIA RIVER SYSTEM TOHELP FISH, supra note 20, at 1.
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downstream by passing over the spillway, through surface bypass systems, through the
turbines, or can pass the dam after being collected and shipped via barge.25
Spilling water
to allow downstream fish passage is so effective and important to successful fish
migration that the dams have been under court order to spill sufficient enough amounts of
water during the spring salmon and steelhead migration to allow greater fish passage
rates and to decrease juvenile fish mortality.26
Despite the importance of spilling water for fish migration, dams may not spill too
much water without producing electricity. As water is spilled significant amounts of
dissolved gases become trapped in the water as it passes, consequently increasing the
concentration of the Total Dissolved Gases (TDG).27 If high enough, these gases cause a
condition known as gas bubble trauma, and can result in injury or death to the fish.
Because of the competing priorities of fish migration and TDG levels dams must
carefully determine how much water can be spilled at any one time.
In times of oversupply of runoff the primary limitation on the dams is the
permissible level of TDG in the spilled water. The options for moving water downstream
in an oversupply situation, therefore, are binaryeither spill the water and increase the
TDG or run the water through the turbines and generate additional energy.
25Id., at 1.26 National Wildlife Fed'n v. National Marine Fisheries Serv., No. CV 01-00640-RE,2011 WL 3322793, at *2, *12 (D. Or. Aug. 2, 2011) (ordering dam operators toimplement spring and summer spill operations consistently with courts previous spillorders).27
BONNEVILLE POWER ADMINISTRATION,FCRPSBIOLOGICAL OPINION UPDATE 2008-2018,at 2, available at,http://www.salmonrecovery.gov/Libraries/hemlock_doc_lib/FINAL_High_flows_TDG_Effects_Fact_Sheet_051711.sflb.ashx.
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B. Limiting Wind Power Production and its ConsequencesRenewable
Energy Certificates and the Production Tax Credit.
Wind turbines also have methods to limit their electrical output. The blades on
many turbines may be feathered to allow some wind to be spilled and decrease the blade
speed.28 Similarly the entire turbine head may be pointed slightly off-wind to reduce
blade speed.29 Lastly, in times of extreme wind speeds a turbines blades may be stopped
entirely with hydraulic brakes and enter into a protection mode until wind speeds return
to safe operating speeds.30
Limitations on curtailing wind power come mostly in the form of economic
constraints, as opposed to the environmental considerations relevant to curtailing
hydropower. In the traditional electric market hydropower electricity becomes so cheap
and plentiful in times of oversupply that the utilities and independent power producers
will shut down their coal or natural gas generators and buyor take for freethe
hydropower instead.31 Wind turbine operators, however, work under a different set of
economic incentives that only reward the operator when the turbines are spinning and
producing power.32
These incentives include Renewable Energy Credits (RECs) and
Production Tax Credits (PTCs), and these credits are discussed in further detail below.33
28 KISSELL, at 37.29Id.30
Id.31 BONNEVILLE POWER ADMINISTRATION, BPAS PROPOSED OVERSUPPLY MANAGEMENTPROTOCOL, at slide 2 (February 14, 2012), available athttp://www.bpa.gov/corporate/AgencyTopics/ColumbiaRiverHighWaterMgmnt/20120207-proposed-protocol/Feb14WorkshopPresentation.pdf.32Id.33
Id.
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RECs are a tradable credit that represents the non-electricity aspects of the
renewable energy.34
That isthey represent the environmental benefits of the renewable
energy, but not the physical unit of electricity used to power machines and the like.
Because of their abstract nature, RECs, unlike the actual electricity moved over grids,
may be traded freely across geographic boundaries without requiring physical
transmission. In this way RECs may be purchased by parties who may not in the end use
the actual electricity generated by the wind turbine, but wish to pay for the environmental
benefits of the electricitys production.35
RECs, however, are only created when a qualifying production unit is actually
producing energy that is sold on the electric market. A wind operator, therefore, may not
trade a REC unless the blades are spinning on the turbine, something that does not occur
if a turbines blades are locked. Even without a complete shutdown, a wind turbine is
only able to trade as many RECs as correspond to actual energy produced. So this way
even if the blades are spinning at partial capacity, the wind power producer is still not
receiving the normal REC income generated by the unit.
The Production Tax Credit (PTC) acts in a similar way to the RECs. The PTC was
originally created by the Energy Policy Act of 2002,36 and was most recently
reauthorized by the American Recovery and Reinvestment Act of 2009.37
The Production
34 ENVIRONMENTAL PROTECTION AGENCY,EPAGREEN POWER PARTNERSHIP,RENEWABLE ENERGY CREDITS 1 (2008), available athttp://www.epa.gov/greenpower/documents/gpp_basics-recs.pdf.35See id.36
Energy Policy Act of 1992 1914(a), 106 Stat. 2776, 3020 (codified at 26 U.S.C. 45(c) (1992)).37 American Recovery and Reinvestment Act of 2009 (ARRA), Pub. L. No. 111-5, 123,123 Stat. 115 (2009). For further discussion on the PTC See Christopher Riti, ThreeSheets to the Wind: The Renewable Energy Production Tax Credit, Congressional
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Tax Credit is calculated based on the grid-connected electrical output of the wind
turbine.38
The tax credit generally lasts for ten years and equals 2.2 cents per kilowatt-
hour (kWh).39 Given the 2012 average cost per kWh in Oregon for retail consumers was
8.33 cents40
, this tax credit can make up a substantial share of the amount the wind power
generator receives for their investment. But like the RECs, the PTC requires the
electricity from the wind power to be connected to the grid and sold. If a wind turbine is
stopped or slowed the turbine operator is losing the value afforded by the PTC. It should
be noted, however, that the PTC is set to expire at the end of 2012 and future of the PTC
is both in doubt andat the time of this writinghotly contested in the U.S. Senate.
41
Because both RECs and the PTC require actual energy production these systems
incentivize wind energy operators to operate their turbines at full capacity regardless of
whether there is a market for their energy in times of high demand. The structure of both
RECs and PTCs then put the wind operators in competition with the hydroelectric
facilities for generation and transmission in times of oversupply. The combination of
Political Posturing, and an Unsustainable Energy Policy, 27 PACE ENVTL.L.REV. 783,790 (2010).38 WORLD RESOURCES INSTITUTE,THE BOTTOM LINE ON RENEWABLE ENERGY TAXCREDITS 1, available athttp://pdf.wri.org/bottom_line_renewable_energy_tax_credits_10-2010.pdf.39 Database of State Incentives for Renewables & Efficiency (DSIRE),http://dsireusa.org/incentives/incentive.cfm?Incentive_Code=US13F (last visited Mar. 5,2012) (DSIRE is partially funded by the U.S. Department of Energy).40
U.S. Energy Information Administration, ELECTRIC POWER MONTHLY MARCH 2012, at110, Tbl. 5.6.A. Average Retail Price of Electricity to Ultimate Customers by End-UseSector, by State, January 2012 and 2011 (2012), available athttp://www.eia.gov/electricity/monthly/pdf/epm.pdf41See Liz White, Senate Finance Panel Debates Extending Incentives for RenewableEnergy Sectors, Daily Environment Reporter (BNA March 28, 2012)(explaining that theU.S. Senate continues to debate whether to extend the PTC).
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wind powers lack ofmarket sensitivity and hydropowers physical constraints creates
this conflict at a time when the grid system is least likely to be able to accommodate it.
IV.HOW CAN WE CONTROL EXCESS ENERGY WHEN IT OCCURS?
Because neither the current markets nor physical factors will allow for a quick
resolution of the issues, there must be a change to one or both so compromise may be
reached. There are several different avenues that may be pursued, and many or all of
these avenues may be pursued simultaneously. The first of these avenues has been hotly
contested in litigation, while the later avenues and options reflect longer-term goals to
balance out the surging effect of wind resources on the electrical grid.
A. Negative Pricing Schemes
One avenue that has generated a significant amount of news recently is the
possibility of using negative pricing schemes. At heart, a negative pricing scheme is a
pricing policy that effectively pays a power producer not to produce power. For example,
in times of high spring runoff and high TDG levels a hydroelectric dam would pay
another power producer not to produce electricity and deliver free hydro-generated
electricity to that power producers customers. In this way the hydroelectric dam would
be able to stay within acceptable TDG levels and the non-hydro power producer would be
compensated for its loss.
The Federal Energy Regulatory Commission (FERC) recently issued an opinion
inIberdrola Renewables, Inc. et al. v. Bonneville Power Administration that appears
favorable to such a negative pricing scheme. 42 FERC is authorized to regulate interstate
transmission of electricity. The case centers on BPAs first attempt to resolve the
42 Iberdrola Renewables, Inc. et al. v. Bonneville Power Administration, 137 FERC 61,185. (Dec. 7, 2011).
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oversupply issue that essentially shut down wind turbine operators without compensation
in times of oversupply. BPA is a federal authority and is responsible for operating and
maintaining the transmission lines discussed in Part II. BPA can, subject to the Open
Access Tariffs approved by FERC, modify its agreements with individual power
producers and can require certain conditions be met before BPA will transmit the
electricity from these producers.43
In this case, BPA developed an Environmental Redispatch Policy44
that addressed
how BPA prioritized access to the transmission lines in times of oversupply. As a
condition of transmission the wind operators agreed follow BPAs instructions on
redispatch orders and agreed to reduce their generation as BPA ordered.45 The
Environmental Redispatch Policy worked mainly by temporarily substituting Federal
hydropower, at no cost, for wind power or other generationin the BPAs balancing
area.46 In essence the BPA environmental redispatch policy allowed BPA to unilaterally
substitute its own hydropower for the wind power to maintain system balance and to
avoid spilling water. This unilateral substitution had the effect of removing the value of
both the REC and PTC from the wind operator because the wind turbines were not
producing any electricity and the Environmental Redispatch Policy made no offer to
compensate for this lost revenue.47
43Id. at 7.
44 Bonneville Power Administration, Environmental Redispatch Policy, available athttp://www.bpa.gov/corporate/pubs/RODS/2011/ERandNegativePricing_FinalROD_web.pdf.45 Iberdrola Renewables, Inc. et al., 137 FERC at 7.46Id. at 4.47
Id. at 6.
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The wind power operators filed the complaint with FERC and argued the BPA
should be required to engage in a negative pricing scheme that would essentially require
BPA to pay the wind power operators to reduce or stop their energy production.48 The
wind power operators argued the Environmental Redispatch Policy was unduly
discriminatory pursuant to Section 211A of the Federal Power Act49 because the policy
shifted all of the costs of the over generation away from BPA and BPAs customers and
moved it onto the wind power operators.50
The commission agreed with the wind generators that the BPAs approach
unfairly discriminated against the wind facility owners.
51
FERC found that BPA had used
the Environmental Redispatch Policy between May 18, 2011 and July 10, 2011 to
redispatch a total of 97, 557 MWh of wind generation, which equals 5.4% of the
1,760,905 MWh ofpower produced by wind generators in BPAs service area.52 Based
on these numbers the Commission estimated the Environmental Redispatch Policy had
cost wind generators $2.15 million dollars in lost RECs and PTCs.53
On February 12, 2011, a few months after the FERC decision, BPA released a
proposed oversupply management protocol that would ultimately compensate wind
generators for lost RECs and PTCs.54 On March 6, 2012, BPA submitted a Compliance
48Id. at 6, n. 14, 8.49 Federal Power Act, 16 U.S.C. Sec. 824j-1(b) (2006).50 Iberdrola Renewables, Inc. et al., 137 FERC at 8.51
Id. at 62.52Id. at 63, n. 99.53
Id.54
BONNEVILLE POWER ADMINISTRATION, Fact Sheet: BPAPROPOSES RESOLUTION TOELECTRICITY OVERSUPPLY 1, (February 12, 2012), available athttp://www.bpa.gov/corporate/pubs/fact_sheets/12fs/FS-BPA-proposes-resolution-to-electricity-oversupply-Feb-2012.pdf.
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Filing describing the Oversupply Management Protocol.55 The new policy would, in
order of necessity, maximize the availability of transmission lines, spill water up to the
permissible TDG levels, reduce generation of any facility that does not receive RECs or
PTCs to minimum generation levels, and then lastly replace any electricity from non REC
or PTC dependent facility with free federal hydropower.56 If none of the above cure the
overgeneration, BPA would begin to displace REC and PTC dependent generators in
order of least cost and will compensate these generators for actual losses so they remain
economically whole, but do not profit when their generation is curtailed.57 As BPA has
only recently filed this Oversupply Management Protocol, FERC will have another
chance to determine whether this solution is satisfactory.
One solution to take away from the FERC decision inIberdrola Renewables, Inc.
et al. v. Bonneville Power Administration, is that to avoid overgeneration or spilling
water through the dams hydro producers must ultimately engage in negative pricing
schemes and pay wind producers and other variable rate producers to cut power. A
negative pricing scheme is certainly one approach, but there are also several other
available, mutually acceptable, and long-term solutions that focus on leveling out the
fluctuations in wind energy production. This leveling of wind power production would
help mitigate the difficulties of integrating variable wind electricity into a largely
seasonal hydroelectric market.
55Compliance Filing Of The Bonneville Power Administration, No. EL11-44-000
(March 6, 2012).56Id.57
Id, at 1-2.
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B. Pumped Storage and Other Storing Power Methods.
Another suite of options to reduce and control the overgeneration of hydropower
is through a number of methods that use the hydro resources in times of oversupply to
store power for later use. These options include pumped storage, compressed air,
batteries, and flywheels.58 All of the above options take hydro-generated electricity and
move the energy into another form for storage. Once the energy is stored in this manner it
can be used to generate electricity when the overgeneration ends.
Pumped storage is the most efficient of these options and is best for long-term
energy storage.
59
Pump storage has been used since the 1890s
60
and works by using
excess hydro-generated electricity to pump water uphill to a storage reservoir.61 When the
electricity demand increases or oversupply ends, the water may then be run back down
and through the turbines to generate electricity.62 The process of moving the water results
in a turnaround efficiency of about 70-85%.63 This means that anywhere from 15-30% of
the original energy from that water is wasted in the process. This loss of efficiency is not
significant in times of oversupply though, because there is simply too much water to be
58 BONNEVILLE POWER ADMINISTRATION,PUMPED STORAGE AND PUMPED STORAGEINTEGRATION OF RENEWABLE EVALUATION RESOURCES, at slide 13 (Feb. 11, 2010)[hereinafter PUMPED STORAGE], available athttp://www.nwhydro.org/events_committees/Docs/2010_Annual_Conference_Presentations/Thursday/NWHA%202010%20Conf%202-18%20Pumped%20Storage%20Jones.pdf;Yuri V. Makarov et al., Sizing Energy Storage to Accommodate High Penetration ofVariable Energy Resources, PNNL-SA-75846, 1 (2010), available athttp://energyenvironment.pnnl.gov/ei/pdf/Sizing%20energy%20storage.pdf.59Id., at slide 14. See also A.G.TER-GAZARIAN, ENERGY STORAGE FOR POWER SYSTEMS85 (2
nd. ed. 2011).
60 TER-GAZARIAN,supra note 59, at 85.61
U.S.DEPARTMENT OF THE INTERIOR,BUREAU OF RECLAMATION,POWER RESOURCESOFFICE,RECLAMATION:MANAGING THE WATER IN THE WEST,HYDROELECTRIC POWER12 (2005), available athttp://www.nwhydro.org/resources/docs/pamphlet.pdf.62Id.63
TER-GAZARIAN, supra note 59.
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spilled, the process still results in a net energy gain, and the energy is not produced until
there is a demand for the electricity.
Pump storage does have some limitations. First, the water must be physically
pumped uphill before it may be released again, and this pumping requires a significant
amount of time. This time lag delays the ability to quickly use or quickly store these
reserves. Secondly, pumped storage facilities are generally small64 and their limited size
means they may not be able to hold sufficient quantities of water to mitigate the inflow of
excess water capacity in high runoff periods. New pumped storage would also require a
significant capital outlay because of the amount of construction involved.
Another technology available to store excess energy is through compressed air.
The concept is theoretically similar to how pumped storage and batteries operate.65
In this
system electricity generated through hydropower is used to compress air and then the air
is injected into a storage container. The storage container can be in a tank, or for larger
projects, a stable rock formation. When energy is again needed the compressed air is
released, heated, and then run through a turbine to generate electricity.66
One limitation to compressed gas systems is the expense required to build an
electrical facility that is in effect is a net electricity consumer. As with pumped hydro,
there is a loss of efficiency for this process because energy must be expended to
compress the air and store it, and fuel must be burned to head the air as it is released.
There is also limited data available on compressed air facilities because few currently
64 U.S.DEPARTMENT OF THE INTERIOR, supra note 61.65Id.66
TER-GAZARIAN, supra note 59, at 10203.
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exist. One such facility has been planned in Iowa that was designed with storage of
excess wind power in mind.67
Flywheels may also be used to temporarily store energy. In this situation a large
flywheel is sped up to rotate at extremely high speeds. When the generator needs
electricity it can use the energy from the spinning flywheel to generate electricity.
Flywheels may be ramped up and down quickly to respond to power needs, but they are
not particularly efficient storage devices and are generally only effective for very short
time periods.68 A flywheel has a turnaround efficiency of 85% for very short term storage,
but only a 45% turnaround efficiency after twenty four hours.
69
Lastly, batteries70 may be used to temporarily store excess hydropower in times of
oversupply or when there is a lack of demand. Batteries take electricity and store that
electricity chemically for later removal. Batteries are able to give and receive power
quickly, but can be bulky and expensive.71 There are, however, several competing battery
designs that may promise to bring down both the bulk and the expense of these battery
systems. Despite the promise of these developing systems, this approach remains a costly
method of storing power in times of oversupply.
C. Smart Grid Technologies and Demand-Side Response Programs
Another possibility now exists through what is known as the smart grid.
Historically the utility has only been able to influence the power consumption level of its
consumers through price signals, which are in turn set by regulation. There are some
67NORTHWEST WIND INTEGRATION ACTION PLAN, supra note 8, at D-2.68 PUMPED STORAGE, supra note 58, at slide 13.69TER-GAZARIAN, supra note 59, at 83.70Batteries for the purposes of this article refer to Electrochemical energy storagesystems in general.71
Id.
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exceptions to this, such as agreements with large-scale electricity consumers, but utilities
are generally unable to control short-term electricity demand in any meaningful way.
New technology and the encouragement provided by the Energy Independence and
Security Act of 2007,72
however, have opened up the possibility that a utility can
communicate directly with electricity consumers and their appliances.73 Direct
communication with various machines in a consumers house or business would allow
the utility to increase or decrease power consumption in response to the needs of the
grid.74 During times of oversupply the utility would be able to turn on certain necessary
appliances to use up excess energy. Essentially a smart grid allows for this two-way
flow of information and increases the efficiency of power production and distribution.75
One possible future development revolves on using the batteries in electric cars as
buffers to grid variability. In this situation a utility would be able to communicate directly
with an electric car as it charges. When there is excess electricity the utility may send
electricity to charge the cars battery, and when there are short periods of peaking
electricity demand the utility could send some of the cars power back into the grid.
Many other examples of these smart grid technologies could exist in a typical residential
home including water heaters and home thermostats that turn up and down depending on
electricity supply and demand, as well as a utilitys ability to temporarily power down the
72Energy Independence and Security Act of 2007, 42 U.S.C. 17001-17386, 17381-
17386, Pub. L. No. 110-140, 121 Stat. 1492 (2010).73
U.S.DEPT OF ENERGY,THE SMART GRID:AN INTRODUCTION 11, available athttp://energy.gov/sites/prod/files/oeprod/DocumentsandMedia/DOE_SG_Book_Single_Pages%281%29.pdf.74Id.75
Id., at 11, 13.
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heating element in a consumers dryer.76 With the addition of these improvements
electricity generators can not only smooth out their supply as they have traditionally done,
but they can now also smooth out demand.
V.HOW CAN WE EASE THE INTEGRATION OF WIND POWER?
Negative Pricing Schemes, Storage, and Smart-grid technologies can help control
and absorb energy as it is produced, but there are additional strategies that focus on the
long-term and will help make wind power less variable and, therefore, easier to predict
and integrate into the electrical grid. While these solutions are not directly responsive to
solving oversupply in the short term, they are very much related to successfully merging
variable wind power into a system dominated by seasonal hydroelectric electricity.
A. Regional Diversification of Wind Energy Production
One such long-term method of successfully integrating wind energy into the grid
isperhaps counter intuitivelybuilding additional wind capacity. Building additional
wind capacity in the same place east of the Columbia River Gorge, however, would not
solve this problem. More important than the amount of installed wind capacity for overall
grid reliability is how a grids wind capacity is diffused and spread over geographically
diverse areas. Gaining this regional diversification will require new transmission lines,
but there may be some avenues that mitigate the impact and costs associated with their
construction.
The primary reason that Oregons wind turbines are located east of the Columbia
River Gorge is because of the transmission availability there.77 Part of why BPA has such
a difficult time integrating wind energy into the electric grid is because the wind blowing
76Id.77
NORTHWEST WIND INTEGRATION ACTION PLAN, supra note 8, at 17.
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through the mass of turbines largely rises and falls simultaneously, exacerbating the
surges and drops in wind power production. Regional diversity of wind generation has a
natural balancing effect that reduces the overall variability of wind that makes planning
around wind power so difficult.78
In order to balance the ever-increasing load of turbines
built east of the Columbia River Gorge there must be a correspondingly significant
increase in wind generation elsewhere in the grid to achieve the calming effect that
regional diversity promises for the electric grid.
The same limitations that put all of the wind in the same spot east of the Columbia
River Gorge still exist; the lack of diverse regional transmission capacity remains the
primary limitation on achieving this geographic diversity.79 This increased transmission
capacity will, however, require significant transmission line construction and the capital
expenditure for this construction will ultimately be born by the regional electric
ratepayers.80
One possible way to reduce these costs is to modify the way in which wind
generation facilities plan for transmission. Currently projects begin their planning process
by gaining access to enough dedicated firm transmission to ship out the maximum
amount of electricity the wind facility is capable of producing. Firm transmission
essentially means the project developer is reserving the right in advance to pass the
electricity on for transmission as it produced. But despite this reserved access, wind
turbines rarely achieve 100% of their potential electricity production and instead
produces on average approximately 5% of the turbines capacity at a time.This is known
78Id., at 27.79Id., at 26.80
Id.
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as the capacity factor of wind.81 For example, a 100 MW wind farm has the capacity to
produce 100 MW of power at any given moment. Some of the time though the wind will
not blow hard enough to produce 100 MW of power. Using the above capacity factor of
5% the wind farm in this scenario would only produce 5 MW of power on average.
Given this constraint one potential solution would shift facilities away from
obtaining 100% firm transmission to lesser amounts of firm transmission rights. Because
of wind powers low capacity factor, wind power producers do not end up using all of the
firm transmission rights. Under this approach a wind power producer would obtain a mix
of transmission rights including firm, nonfirm or conditional firm transmission.
82
This
approach, without more, is likely to be unattractive to wind power producers because it
effectively limits the ability to sell the total amount of electricity generated during times
of high wind and high energy production. Undershooting the transmission requirements
for new wind power in this way, however, would have the dual effect of keeping costs
low for regional ratepayers and gaining the geographic diversity that wind energy
requires for stability.83
B. Improved Wind Forecasting
One last important technological improvement that will allow for more efficient
integration of wind into the grid is improved wind forecasting. Generating electricity
from wind is challenging not just because of winds variability, but how unpredictably
wind varies. If grid managers and power producers knew how much wind was going to
81Id., at 47 (defining capacity factor as a measure of the actual annual energy output of
a generating resource divided by the theoretical maximum output if the machine wererunning at its rated capacity during all 8,760 hours of a year).82Id., at 11.83
See id.
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come in to the grid well ahead of time, they would be able to better prepare for these
sudden surges and lulls.84
A key tool in gaining this knowledge is through improved wind
forecasts.85 To predict how the wind will blow, data is collected from weather stations,
radar systems, aircraft, and satellites.86
This data is then run through computer models to
simulate the future state of the atmosphere, and the likely resulting winds.87 The data,
however, is only as good as the quality of the original data and the accuracy of the
computer simulation.88
Despite the lack of completely accurate or comprehensive data,
improved wind forecasting significantly reduces the cost of wind generation and
improves the ability of the grid to reliably integrate more wind energy into the system.
VI.CONCLUSION
The environmental benefits of hydropower energy and wind energy are real. At
times, however, these two renewable resources come in to conflict because of physical,
economic, and environmental considerations. Oregon and the Pacific Northwest have
relied on hydropower for decades. Only recently has wind power made a noticeable
impact on the electrical markets here. While there are no easy win-win solutions to this
dilemma to overgeneration there are various changes that will decrease the overall
volatility of the two energy sources and as a result create a strong electrical grid. A
negative pricing policy is a start, but such a policy has clear economic winners and losers.
84Mark Ahlstrom et al.,Atmospheric Pressure Weather, Wind Forecasting, and Energy
Market Operations, November/ December Issue IEEEPOWER &ENERGY MAGAZINE 97,98 (Oct. 2011).85
Id.86Id.87Id.88
Id.
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If the status quo continues without increasing the geographical diversity of wind
resources, wind energy will continue to be a worrisome uncertainty in a system regularly
overburdened with variable electrical capacity. While building infrastructure for this
diversity may also be controversial it will significantly improve Oregons electrical grid
and increase the amount of renewable electricity generated in the state. This diversity
combined with technological improvements to energy storage, smart grid communication
and improved wind prediction, will go far to ease the current conflict.