After nearly a decade in the making, Texas’ Competitive Renewable Energy Zones (CREZ), a $6.9 billion transmission-based project which figures to have a dramatic impact on wind generation in the state, is expected to be completed by the end of this year.
Approved by the Texas legislature in 2005, CREZ includes 186 projects comprising the construction of 345 kV transmission lines and network upgrades to dozens of substations, switches and terminals. The projects span across nearly 3,600 miles, running as far north as Amarillo and as far south as San Antonio. CREZ’s scope and cost have grown considerably from a 2008 estimate envisioning 109 projects for approximately $4.9 billion.
The Electric Reliability Council of Texas (ERCOT), the system operator overseeing the project, says that the CREZ enhancements were made with an eye toward reactive power that stabilizes voltage conditions on the grid, and the transmission projects are poised to alleviate curtailment and unlock congestion.
Once completed, the CREZ transmission projects will have the capability to transmit approximately 18.5 GW of wind power – much of it emanating from windy West Texas – to load centers in the eastern part of the state.
In addition, CREZ will help mitigate wind energy curtailment, which has historically been a big issue within ERCOT’s footprint. For example, ERCOT curtailed approximately 2,500,000 MWh – about 8% of the total possible production that was available to the grid.
“CREZ will turn out to be the most visionary thing this state has ever done electricity-wise,” predicts Paul Clark, executive director at the Wind Coalition, a regional partner of the American Wind Energy Association (AWEA). “The curtailment that we’ve been experiencing in the state will be largely alleviated.”
Kent Saathoff, executive advisor at ERCOT, explains that while most of the heavy construction related to the project has been completed, some system refinements, mostly technical modifications, remain.
As Saathoff explains, when power travels along a circuit, the voltage can become less stable as the electrons become less organized. It can also become difficult for generators at the end of long lines to stay in sync with the rest of the system.
One way to address the problem is to add generators or other electrical devices, such as capacitors and reactors, at strategic locations along the circuit to electrically bring the remote generator (or load) closer to the rest of the system.
“Sometimes with long transmission lines that are lightly loaded, such as CREZ, it can be hard to control voltage,” he says. “Wind energy needs a source to stabilize it and make it stay in sync.”
Also, as more CREZ-related projects attempt to tie in with the grid, abnormally hot or cold spring and fall temperatures – leading to unexpected high power demand on the system – could cause delays.
A secondary effect of a missed outage window is that it may impact neighboring projects. While not affecting the neighboring project’s construction schedule, a construction delay to project A could delay project B’s scheduled energization date.
Another benefit to the CREZ lines is that they may help alleviate negative prices caused by transmission constraints/congestion.
To relieve transmission congestion, generation must be reduced to decrease power flows on the constraint, Saathoff explains. “Because our market is based on economic dispatch, curtailment would begin with the highest-priced generation and, as needed, continue down to the lowest price.”
Because wind generation has no fuel cost and receives a production tax credit for power it generates, wind operators can afford to bid a negative price – in essence, pay to generate power.
“When wind generation has to be reduced to relieve the constraint between West Texas, where most wind generation is located, and the rest of ERCOT, where the load is located, this results in negative prices in the West Texas area,” says Saathoff. However, he explains that adding more capacity between West Texas and the rest of ERCOT to reduce instances when congestion occurs should result in fewer negative prices.
The CREZ lines will undoubtedly enable Texas to maintain its No. 1 wind ranking in the U.S.
According to AWEA, Texas surpassed 12 GW of installed capacity last year – a 17% increase over 2011. In the fourth quarter alone, Texas installed more than 1.2 GW of installed capacity, the most of any state.
Other ERCOT matters
Putting CREZ aside, ERCOT has worked through some technical issues to help wind energy become a more trusted generating resource on the grid. At times, however, rival electric generators within ERCOT’s territory took issue with wind energy.
Two years ago, Kevin Howell, president of NRG Texas, which operates nuclear and coal plants and owns 345 MW of installed wind capacity in West Texas, told NAW, “It’s time for wind energy to be held to the same standards as other generators within ERCOT. We take our scheduling responsibilities very seriously.”
Howell was referring to two instances in which wind’s shortfalls required other generators, such as NRG, to continue to run their gas plants. In fact, Howell pointed to two past instances where low wind power levels caused ERCOT to scramble to call in reserves to avoid rolling brownouts in the state.
Fortunately, those issues are largely behind wind energy. ERCOT has implemented several wind-forecasting tools and revised some operating procedures that have greatly improved the system operator’s ability to manage the increased amount of wind on the grid.
“Going back over the last few years, there were some technical requirements that needed to be worked through our stakeholder process,” Saathoff explains, adding that wind developers could not be blamed for feeling as if they were being targeted.
“That might happen,” he says, “particularly if the complaints were coming from a competitor.”
Patrick Woodson, CEO at Austin-based E.ON Climate & Renewables North America, credits ERCOT for slowly erasing reliability issues on the grid.
“Much of the prior contention has disappeared, as ERCOT’s capability to integrate large amounts of wind has quelled prior concerns,” he says.
Milton Howard, vice president and lead developer for Texas at Duke Energy Renewables, also gives ERCOT high marks for the manner in which it has worked to integrate wind energy onto the grid.
And as evidenced by the 950 MW of installed capacity completed by Duke in Texas, Howard prefers to develop wind projects here. “There’s great wind resources here, and Texas is an easy state to do business.”
Just the same, Howard says several macroeconomic factors can give wind developers reason for concern.
“Because of deregulation, Texas does not have the amount of buyers for your power that were once available,” he explains, adding that cheap and abundant natural gas makes wind projects challenging to get built. “So, you could say the barriers to enter the Texas market are pretty high.”
Working with natural gas
Natural gas is not only cheap in Texas; it is also plentiful. According to reports, new shale supplies and drilling techniques have doubled the state’s natural gas supplies through 2030. As Howard mentions, low prices have fueled concerns that natural gas will soon crowd out renewable resources, undermining Texas’ progress toward developing wind and reducing emissions.
However, maintaining low-carbon generation in the Texas electric power market will likely require the co-development and integration of both natural gas and renewable energy resources. According to a recent report from The Brattle Group prepared for the Texas Clean Energy Coalition, the pairing of wind (and solar) energy resources with natural gas can have wide-ranging system benefits.
According to the report, “Partnering Natural Gas and Renewables in ERCOT,” wind and solar power are inexpensive to dispatch because they have no fuel cost. In comparison, natural gas-fired generation is more expensive to dispatch even at $4/MMBTU gas prices, the report adds. However, when utility planners build new electric plants, the report finds that wind farms and solar plants likely are not the lowest-cost resource because of their higher upfront capital costs.
A more accurate comparison, notes the study’s authors, should take into account costs from natural gas and new renewable energy projects compared with the total rate impact on consumers. w
Nearly Completed CREZ Lines Unlock Wind Congestion
By Mark Del Franco
The massive transmission project will carry wind output from West Texas to the state’s load centers in the east.
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