Report: Shift to renewable power generation demands new approaches to transmission challenges

Washington, D.C., Oct. 22, 2008 — Significant progress is being made to prepare America’s electrical grid for the integration of renewable and carbon-neutral generation sources. But a successful, large-scale shift to clean energy demands a bold and far-reaching commitment by utilities, regulators, and policymakers to provide infrastructure and new rules that enable power from often-remotely located clean resources to be delivered to consumers efficiently and economically.

Those are some of the conclusions of a new report by the Working Group for Investment in Reliable and Economic Electric Systems (WIRES), which identifies the most effective technical, commercial, and regulatory practices for integrating “locationally-constrained” wind, solar, biomass, clean coal and other generation sources into the grid. WIRES is a non-profit trade association that promotes investment in the grid and provides information about transmission to state and federal policymakers.

Entitled “Integrating Locationally-Constrained Resources Into Transmission Systems: A Survey of U.S. Practices,” the study is available on the WIRES website, www.wiresgroup.com, and here (pdf).

“Our national transmission system’s key challenges include interconnecting and operationally integrating the clean and often volatile generation resources needed to comply with potential climate change legislation and renewable portfolio standards,” said Will Kaul, the president of WIRES. He added that while the amount of energy generated currently is somewhat small, much more will be built and need to come to the grid.

Widespread use of renewable energy is complicated by its locational constraints and operating characteristics, said WIRES’ vice president and principal supervisor of the report, Paul McCoy. “The wind doesn’t always blow; the sun doesn’t always shine. But we can harness these resources for the public good as a valuable part of the generation mix if we invest in additional transmission facilities.”

The report — which was prepared for WIRES by CRA International of Boston — details a survey of practices that will facilitate clean energy’s integration into the electric system. It addresses investment priorities, planning, operational and regulator issues, and rate and tax matters.

Among other positive developments, the report found:

* Regional and cross-utility collaboration are encouraging new transmission planning tools, including creation of transmission infrastructure authorities and renewable enterprise zones.

* Regulatory rules of the marketplace increasingly are being designed to address the technical challenges of connecting locationally-constrained resources, including relaxation of otherwise prohibitively costly scheduling and imbalance charges for intermittent resources.

* Because transmission pricing and cost recovery are critical elements of transmission investment decisions, certain jurisdictions have taken positive steps to ensure recovery of investment in transmission built to connect to renewable resources.

* Federal and state governments are providing incentives to accommodate integration of locationally-constrained resources, extending tax breaks for investment in renewable resources to transmission required to connect those resources.

* WIRES concluded in the preface of the report that a strong regional planning regime is critical, wind forecasting and regional aggregation of intermittent resources result in highly reliable power, cost allocation and cost recovery should be made less uncertain, and queue reform processes are promising and should be accelerated.

“We need major strengthening and expansion of the existing grid,” McCoy said. “We hope this analysis will awaken policymakers to the difficulties the industry is addressing — often with success, but sometimes with great frustration.”

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