By David Wagman, Chief Editor

The Bonneville Power Administration has run smack into an issue that may be repeated elsewhere as wind power gains an increasing share of the electric power generation mix.

The issue is wind integration and, more to the point, how to manage operational and cost allocation issues as wind power projects come into service.

BPA Administrator Steve Wright wrote in a landmark July decision that while the “explosion” of wind power on the BPA system since 2005 should be cheered and encouraged, his agency “cannot responsibly ignore the fact that the large amount of wind on our system has also led to operational challenges.” Challenges include risks to reliability, substantial costs and the need to appropriately allocate them.

BPA in its July order adopted a rate of $5.70/MWh for wind integration or wind balancing services. The charge is less than the $12/MWh BPA initially proposed. The decision and tariff could, according to law firm Stoel Rives, signal the wind industry that transmission providers may “change course as they react to increasing amounts of wind being integrated into the grid.”

Whether or now BPA’s approach wins followers elsewhere remains to be seen. “Gosh, I hope not,” said Brandon Kirby, a consultant who co-authored a report last year for the American Wind Energy Association and the National Renewable Energy Laboratory. In it, Kirby and co-author Michael Milligan wrote that when wind power plants serve load within a host balancing area, no additional capacity is required to integrate wind power into the system. They argue wind energy displaces conventional generators’ energy.

Wind serving load outside a host balancing area may impose additional capacity requirements, however. The authors said how much depends in part on the length of the market period: faster markets are better able to mitigate the requirement; slower markets less so.

In an interview, Kirby said he was disappointed BPA imposed the wind integration tariff. He said the issue might have been resolved by adopting “fast-market” sub-hourly scheduling, similar to what is used in the MISO and ERCOT regions. Sub-hourly scheduling opens access to more “maneuverable capacity” within a control area and makes accommodating wind much cheaper, he said.

Wright, in a preface to the 541-page BPA decision, said the power authority’s challenges with wind integration have been aggravated because “nearly 80 percent of the wind on the BPA system is exported to other balancing authority areas.” He said failing to solve the problem could limit the amount of wind power than can be interconnected with the BPA transmission system.

A decade ago, wind capacity on BPA’s system was 25 MW. Today, more than 2,000 MW of wind is interconnected to its 10,500 MW peak load balancing area. That capacity could grow to 6,000 MW by 2013. That would place BPA among the utilities with the highest concentration of wind energy in the United States.

BPA said wind resources are producing what it called large ramp events over short periods of time. In general, these output changes had not been predicted in hourly schedules submitted by wind operators, even when the ramp occurred over several hours. As a result, BPA said it needs to reserve parts of its hydroelectric system to back up wind in case unscheduled wind ramps occur unexpectedly.

“Historically BPA has used the Federal hydrosystem to provide reserves for all variability that occurs within its transmission network, but wind has presented unprecedented variability,” the tariff decision said.

BPA said its own policy was at least partly to blame in aggravating the problem. Starting in 2002, BPA exempted wind operators from penalties targeted at scheduling inaccuracies. It created the exemption recognizing that wind is a variable resource not under the operator’s control. Its aimed the penalties, instead, at operators who were taking advantage of market prices by knowingly providing inaccurate schedules.

BPA said that as wind has grown its policy has led to “rather indiscriminate use of balancing services even when within the control of wind operators.” It said its new policies have already begun to change this behavior.

For example, BPA said the wind fleet previously operated at roughly two-hour “persistence scheduling accuracy.” In recent months this has improved to “one-hour persistence” with some operators approaching 30-minute persistence.

Wind operators are investing in meterologists and 24x7 scheduling operations to better their scheduling accuracy, BPA said. Also, moving away from two-hour persistence allows BPA to carry fewer reserves and defer deciding whether new sources of balancing reserves must be acquired.

BPA said some parties to the care argued that its proposed charge penalizes wind generators for wind’s natural variability. It said that many wind generators recognize that wind generation is more variable than other generation and that wind places stresses on the transmission system that thermal generation and load do not. BPA said historical data showed its system has seen persistent and large deviations. The larger the deviation the more balancing reserves BPA must deploy to correct it and the larger the impact on the system’s hydro operations.

As wind farm development continues it will be interesting to see how influential BPA’s decision proves to be.