Transmission a Hot Topic at EEI’s Annual Meeting
James Rogers, president and CEO of Duke Energy, has been elected chairman of the Edison Electric Institute (EEI), the national trade association of shareholder-owned electric companies, international affiliates and industry associates worldwide. The announcement was made during EEI’s annual meeting, which took place June 18-21, 2006, at the Hilton Washington in Washington, D.C.
“At this time last year, we were working to help ensure passage of a major energy bill to bolster electric reliability, strengthen and expand the transmission system, and improve energy efficiency and conservation,” Rogers said. “Now we’re immersed in the process of implementing the new law’s many requirements and the scores of ensuing regulations. Our task is complex, but our goal is simple-to provide reliable electricity at a good value for our customers and shareholders.”
In a Tuesday afternoon forum titled “Expanding Transmission Capacity,” EEI gathered a group of experts to tackle the subject: Jim Fama, EEI’s executive director of energy delivery, John Fielder, president of Southern California Edison (SCE), Michael Hanson, president and CEO of NorthWestern Energy, Mike Heyeck, vice president of transmission with American Electric Power, and Jim Haney, vice president of Allegheny Energy.
Fama challenged each speaker to answer two basic questions: How much capacity is needed for their region? And, what are they doing to reach that capacity?
Hanson split his answer into two areas: capacity to secure reliability and capacity for expansion. Lamenting the lack of a regional transmission organization in the Pacific Northwest, Hanson discussed the major hurdle of recovering transmission costs with export generation.
“Pricing and permitting will make this a difficult process in the West, but we’re going to proceed,” he said.
Fielder turned the view to the Southwest in his discussion. “Keeping up with peak load growth in Southern California is a real challenge,” he said. In fact, in 2006, his company is projecting they will install 88,000 new meters. He also revealed that SCE will invest $2.7 billion in transmission through 2010, with an additional chunk of funds for distribution infrastructure (also in the billions).
Heyeck compared the idea of an expanded national grid to the development of the interstate highway system. Heyeck believes that the same three reasons that Eisenhower saw fit to develop the highway system are equally viable in the concept of a national grid, namely economy, personal safety and national defense.
“Reliability is value one for the U.S. grid, but that’s a minimal level,” Heyeck said. “We need to move farther. We should move the bar up.”
Haney used the forum to discuss another drawback to the current regional grid system: congestion. Right now, he sees congestion as an economic issue-what costs $50 in the West may cost $500 in the East-but he believes this can easily become a reliability issue as well.
After the closing of the transmission forum, EEI’s annual meeting held their second general session where Progress Energy and Xcel Energy were recognized as the 2006 recipients of the “Edison Award,” the highest EEI award presented to U.S. member and international affiliate member companies.
During 2005, Raleigh-based Progress Energy’s focus on customer satisfaction and operational excellence became a rallying cry for the companies’ employees, resulting in an extraordinary year. The result of a sustained effort over several years, Progress built a culture of “People, Performance and Excellence,” in which employees take responsibility for their own performance and understand how their jobs have a direct impact on reliability and service to their 3 million customers. As a result, Progress received the J.D. Power Founder’s Award for excellence in customer service, according to EEI.
Minneapolis-based Xcel Energy in 2005 began fully implementing a first-of-its-kind initiative, Utility Innovations, a partnership among its leading technology vendors to more fully leverage information technology to drive efficiencies in business operations, cost structure, and energy delivery, while increasing customer satisfaction. Xcel Energy fundamentally altered the traditional customer-vendor relationship in favor of a partnership between vendors, in which technology providers worked together to test and validate new technology, and to integrate existing technology, leading them to their Edison Award.
Korea Electric Power Corp. was named winner of the International Edison Award for its technological achievements in completing two major electricity delivery projects, including a first-of-its-kind transmission line connecting an island-bound generating station with mainland Korea.
Next year’s annual EEI meeting will take place in Denver, Colo., from June 17-20, 2007.
Record Attendance Seen at ABB’s Automation World
From May 8 through May 11, over 2,500 people from more than 40 countries gathered at the Hilton Americas in Houston to attend ABB’s Automation World Conference & Exhibition, an event ABB sponsors for its own companies, investors, vendors, partners and customers. At Tuesday morning’s keynote address, Dinesh Paliwal, president of ABB global markets and technology and head of group operations in North America, told attendees that the crowd of 2,500 was a record number for them-30 percent more than the previous year. (A post-conference-issued press release pegged that percentage at 45.) In addition, the exhibit space of the conference had grown 250 percent, with more than 40,000 square feet in 2006.
Conference attendance wasn’t the only thing on the “upswing” at ABB during Automation World; the overall company outlook was chipper as well. Paliwal revealed that ABB was operating in the black for the first time in approximately five years.
“This is a truly exciting time to be a part of the global automation industry,” Paliwal told the packed ballroom that Tuesday morning. “2005 was a very good year for ABB.”
Paliwal reiterated this statement at a press briefing later that morning, adding that “Financial analysts have upgraded ABB, and bond agencies have returned ABB to Investment Grade.” He additionally revealed that orders with ABB North America were up 26 percent and revenue 11 percent.
“We’re performing “Ëœbest in class,'” he added, noting that their biggest sales were through “partner” sales channels.
In fact, the talk of the conference itself was teamwork, partnerships-basically not hoeing that tough road all alone. These days, it’s all about the buddy system.
Denouncing competition based on a pure-price structure, Alan Boeckmann, chairman and CEO of the Fluor Corp., stated in his keynote address, “The future that I envision involves more collaboration between owners and contractors, contractors and suppliers.” Boeckmann, in fact, touted a three-fold use of collaboration: in risk allocation, capital projects, and the utilization of partnerships and alliances.
Paliwal, too, advocated collaboration, telling the audience that they all “must embrace the strategic partnership-working together early in the game.”
ABB’s automation business has a hand in numerous pies from pulp and paper to robotics. Specifically addressing the power sector at the press briefing, Paliwal gave kudos to that side of his company, citing the numbers that almost half of all equipment on the T&D side of North American power came through ABB or a legacy company, and that, additionally, nearly 75 percent of transformers in this region have been touched by ABB.
The production of transformers is an art at ABB, according to Tom Slovik, who specializes in industrial transformer applications.
“We don’t build transformers,” Slovik said to a packed room during a session on the fundamentals of power transformers. “They’re crafted. To meet certain needs. To apply to certain specifications.”
And that craftsmanship is definitely in demand.
“Aging infrastructure is catching up with us [in North America],” said Enrique Santacana, senior vice president of the Power Products Division NA for ABB. “the energy bill is a catalyst with its reliability standards-giving our industry a boost.
“The power side-both generation and T&D-is very exciting right now,” he added. “It’s a great time for our industry.”
The exhibit floor featured a number of ABB processes and products, including their power products. Among those were IEC and ANSI switchgear featuring arc resistant, modular designs; switching and protection for high-voltage transmission systems; everything one can imagine for substations and substation automation (including a modular substation set-up); life-cycle services; and, technologies for improving reliability and productivity.
“ABB Automation World has grown into the premier customer event of its kind in our industry,” stated Paliwal in a post-event wrap-up. “We are honored to provide this meaningful forum for learning and information exchange for our customers.”
ABB Automation World 2007 will be held at the Caribe Royale resort in Orlando, Fla., March 20-22, 2007.
Wind has “Arrived,” but will Transmission Follow?
By Bob Fesmire, ABB
A distinct sense of pride permeated the air at Pittsburgh, Pa.’s David L. Lawrence Convention Center when the American Wind Energy Association (AWEA) conducted its annual conference and exhibition there in June. The event attracted more than 5,000 attendees. That was a new record, and with the broad-based growth the wind industry has seen in recent years, perhaps it was to be expected.
There was no mistaking the satisfaction in the room when AWEA executive director Randal Swisher said, “Wind power is no longer an exotic technology. We have arrived.”
Several panelists throughout the conference repeated the “20 percent by 2020″ mantra started by Swisher, and when you’re surrounded by wind advocates it’s easy to get caught up in the idea of the United States deriving a fifth of its electricity from wind turbines. But there are a number of impediments to reaching that goal. To the credit of the event’s organizers, they were discussed openly.
Perhaps the greatest obstacle to wind is transmission. The specter of grid interconnection came up again and again at Windpower 2006 and understandably so: Transmission is often a make or break consideration for a proposed wind project. Recalling what an Eltra employee told him when asked about his country’s success with integrating large quantities of wind, PPM Energy’s James Caldwell said the Danish experience came down to three things: “smart people, the right attitude and a stiff grid.” If this year’s Windpower conference is any indication, the United States has plenty of the expertise and a growing acceptance of wind technology, but the fact remains our grid is in many cases something less than “stiff.”
Aside from basic NIMBY-ism, there are several factors that line up against transmission expansion: cost (and cost recovery), siting and, in the case of wind, interconnection standards. Speaking during the Utility Leadership panel, FPL Energy senior vice president Mike O’Sullivan explained that, though his company is by far the largest wind developer in the United States, he sees even a 10 percent penetration rate unlikely given current siting and transmission constraints.
“Doing business in the U.S. is like doing business in 48 separate markets,” O’Sullivan said in describing the patchwork of interconnection standards that his company must navigate. Indeed, transmission lines are probably always going to be difficult to site-whether to interconnect wind farms or improve reliability-but it’s clear that the status quo is incompatible not only with the 20 percent objective, but with more modest penetration goals as well.
That said, if you’re waiting for the Department of Energy or another Federal agency to step in to simplify the transmission problem, you’ll probably still be waiting next year when Windpower 2007 hits Los Angeles. If there was any doubt on this point, Alexander Karsner, assistant secretary of energy efficiency and renewable energy, made it clear when he said the DOE would not impose what he termed a “top-down solution.” Instead, he put the ball squarely back in the wind advocates’ court and challenged the industry to “make it happen.”
Obviously, much more remains to be done. As FPL’s O’Sullivan soberly pointed out, his company invests in wind projects because they make money, and if we are ever to see 20 percent of our power coming from wind it will be because the economics are as sustainable as the fuel source. However, now that wind power has earned its place at the adults’ table of generation technologies, it seems only fitting that the transmission requirements for further wind development should be considered on an equal footing with other transmission issues. In thinking about wind power in the context of reliability, market efficiency and energy security, there may be more convergence than divergence.
E.ON Sweden Selects Metering System
Sweden’s largest utility, E.ON Sverige AB, has selected Echelon’s NES System for deployment to 370,000 customers in the Malmo, Orebro and Stockholm areas. Echelon expects shipments to begin in the fourth quarter of 2006 and continue throughout 2007.
“With this win, we have done something truly remarkable-in under six months, we have gone from a virtual standstill to a formidable competitor in the smart metering business,” said Ken Oshman, Echelon’s CEO and chairman. “Our work in Italy, and the successful completion of a 27 million meter smart metering project that many said would never succeed, was the catalyst that began the transformation of the metering industry to the digital age.”
During the six-month period beginning in late December 2005, Echelon and its partners have won smart metering tenders with Vattenfall of Sweden (up to 700,000 meters), Nuon of The Netherlands (25,000 meters), and E.ON (370,000 meters).
“The networked metering market has moved from simple to advanced systems,” said Thomas Thorkelsson, E.ON Sverige’s project manager. “With this award, we intend to become leaders in driving that change and bringing our customers the benefits that only modern systems can offer. We have been operating an NES System for quite some time now, and it has proven that it can deliver the high performance, advanced functionality, and “Ëœfuture-proof’ design that we need to drive this change.”
Sweden is in the process of transitioning to fully automated metering in response to legislation designed to promote a more open and efficient energy market and requiring all electricity meters in Sweden to be read on a monthly basis by July 1, 2009.
Illinois Muni Selects Cellnet for AMI
Cellnet Technology Inc. has executed an agreement with City of Geneseo, Ill., as its advanced metering infrastructure (AMI) provider. The contract calls for the deployment of the Cellnet wireless mesh network radio infrastructure, new electric endpoints, and host software in the initial phase of the project with water endpoints following in a subsequent phase.
The City of Geneseo is located in northwest Illinois just east of Davenport, Iowa. Geneseo sources power through long-term power purchase agreements with Iowa-based utilities including Mid American Energy.
City of Geneseo cited the cost-effectiveness of the Cellnet solution and the comprehensive functional capabilities of Cellnet’s packaged software supporting outage detection, on-demand reads, daily customer usage history, and restoration verification as the main reasons for its selection. The project will utilize two-way solid state meter technology.
City of Geneseo public utilities manager Ken Stock remarked, “(The system) will improve the efficiency of our utility operations and the service we provide our residents. The system will also provide us with an intelligent network platform to support our future needs.”
City of Geneseo Mayor Pat Everhardt said, “This project will help us reduce our cost of utility operations and improve service levels while also positioning us to provide additional energy and utility management services to our citizens in the future.”
Cellnet offers several options to municipalities and utilities seeking to deploy AMI solutions, including a hosted service solution where Cellnet builds, owns and operates the system while providing ongoing services; a second option to build, operate and then transfer operations over time; and a full sale model where Cellnet or one of its partners provides training for a municipality or utility to install and fully own and operate the system.
California ISO Plans for Renewables Boom
With thousands of megawatts in new wind, geothermal and solar generation due on line in California over the next five years to meet the state’s renewable generation targets, the California ISO is working on a comprehensive strategy to integrate these renewable resources into the wholesale power grid.
In June, California ISO staff presented a comprehensive renewable resource integration plan to the Board of Governors and encouraged the public to provide comments. Some of the plan’s elements will need board approval down the line. More information about the renewable plan is available on the California ISO website (www.caiso.com).
Current California state law and regulation requires investor-owned utilities to obtain 20 percent of the power delivered to their customers from renewable resources by 2010. By 2020, 33 percent of deliveries must be renewable power.
“These are important and ambitious goals, not only in terms of developing renewable resources, but also in terms of integrating these renewable power plants into the California ISO’s planning and operations,” said Yakout Mansour, California ISO president and CEO. “We fully support the state’s renewable generation goals, and we want to make sure we are ready to put that renewable power to good use.”
Renewable energy resources, like wind, solar and geothermal pose unique challenges that need to be addressed. For instance, wind and solar generation fluctuate with the weather and the season. Also, renewable power plants are typically located far from populated areas, so they may require new transmission lines to deliver their output to consumers. Because of these issues, the California ISO developed a four-part program to make sure the grid is ready for the coming renewables boom. The four parts of the plan are: transmission upgrades, market integration, operations tools, and updating the Participating Intermittent Resource Program (PIRP).
Currently, the California ISO evaluates a proposed transmission project to determine if it is needed for reliability or if it provides significant economic benefit. The California ISO is considering asking the Federal Energy Regulatory Commission (FERC) to create a third category of transmission project that would facilitate development of transmission projects that increase access to renewable resource areas.
Market integration refers to removing undue financial disincentives that might keep renewable energy projects from being built. Because production from wind and solar generators can be sporadic, grid operators need the best possible forecasting and management tools to efficiently integrate renewable resources into California ISO operations.
Finally, the PIRP program was implemented in 2004 to remove barriers and encourage renewable generators to participate in the ISO market structure. The program has been successful, but now, two years after its inception, the California ISO is exploring some program enhancements that will help now, and in the future, under the Market Redesign and Technology Upgrade (MRTU) program.
“We are in the process of developing the infrastructure to bring on-line the forecasted renewable resources,” said Jim Detmers, California ISO vice president of operations. “We are confident that we will be able to incorporate all the green power we know is coming and put it to work for the people of California.”
Black & Veatch Identifies “ËœBig 10′ Challenges to Electric Industry
The electric industry and its regulators-after years of restructuring-now face an unprecedented set of 10 challenges which, if not adequately addressed, could threaten power system integrity and lead to significant rate increases, according to Black & Veatch.
“The Enterprise Management Solutions (EMS) division of Black & Veatch will, shortly, begin a survey to explore these big challenges and to analyze them in depth,” said Richard J. Rudden, senior vice president. “We would greatly appreciate the cooperation of those contacted by our survey firm over the next few months. We expect to publish the results in the fall and will be happy to make the more detailed study results available to all survey participants.”
These are the 10 big challenges:
1. Aging infrastructure. To maintain adequate levels of reliability and security, the industry has to replace the larger part of plant installed in the 1960s and 1970s, now fully depreciated and technologically obsolescent, and figure out how to get paid for the replacements.
2. Aging workforce. With half the workforce likely to retire within a decade, companies must develop the means to preserve the knowledge that will walk out the door and find skilled replacements for the retiring staff.
3. Security. As if protecting electric plant from the threat of terrorism were not enough of a challenge, the industry must also prepare to protect itself against disruptions within the fuel supply chain caused by stoppages at the suppliers or by international difficulties.
4. Reliability. Complying with newly mandated grid management rules will, no doubt, constitute a challenge, but not as much as efficiently providing the levels of reliability required by individual customers in a digital environment.
5. Environment. Although electric generators have reduced polluting emissions substantially, they will have to do more and do it more efficiently, as additional coal generation comes on-line, and as attempts to mitigate global climate change and water shortages will affect plant siting, fuel choice, competitiveness of particular power stations and cost of doing business.
6. Investment. The old regulatory rules attracted long-term investment; the new market-driven rules seem unable to do so. It appears that the regulators and the industry will have to come up with another model to bring in the capital needed to expand and repair the electricity supply industry.
7. Technology. Although technology exists that could improve industry reliability and reduce costs, policymakers must find ways to lift barriers to implementation and put in place incentives that would make the industry a technical leader again.
8. Fuel policy. As a result of volatile prices, insecure supplies, environmental mandates and market design, developing a conscious fuel policy that takes new risks into account has become a major challenge for power producers and their customers.
9. Market structure. Between repeal of the Public Utility Holding Company Act and the creation of new types of companies in restructured markets, the energy supplier now has choices of how to configure for the marketplace, and must plan the right corporate structure and also consider how the restructuring of other firms might affect its future.
10. Regulation. Even after a decade of trying, regulators still need to develop firm borders between regulated and unregulated pricing, incentives that would cause electricity suppliers to act efficiently and on behalf of consumers, and signals that bring in needed investment capital.
Asplundh Brings e-Vegetation Management Solution to Market
Asplundh Tree Expert Co. has signed a license and distribution agreement to bring its eVMS (electronic vegetation management solution) to its customers in North America, the United Kingdom, Australia and New Zealand.
The solution allows utilities to create, plan, execute, monitor and report on every aspect of transmission and distribution vegetation management programs and activities. Such activities may include performing an inventory of vegetation, prioritizing pruning activities, and scheduling the people and equipment to perform the required tasks. eVMS will also help utilities comply with and report on new NERC mandatory transmission clearance requirements.
eVMS was developed by three companies in the United States: CN Utility Consulting, Enporion and ViryaNet. A pre-production field trial of eVMS has been successfully completed with Asplundh and Southern California Edison. The project, conducted in the second half of 2005, demonstrated the capabilities of eVMS to capture and update inventory information, dispatch work assignments to crews, capture completed work, and report results.
As a result of the license and distribution agreement, Asplundh Tree Expert Co. will now market eVMS.