#Lubbock load not enough to fill the sails of panhandle wind RSS Feed

Lubbock load not enough to fill the sails of panhandle wind


ƒ Wind development in the Texas Panhandle continues to be strong despite low natural gas prices and a saturated renewable energy credit market.

ƒ Recommended transmission options to integrate Lubbock Power & Light into the ERCOT system reduce the risk of negative pricing for future wind development.

ƒ ICF still expects additional transmission expansion in the Panhandle to support the surge in wind project demand.

Executive Summary

Despite strong headwinds from record low natural gas prices and a saturated renewable energy credit market, the Texas Panhandle continues to attract wind investments. Incentives in the form of federal
production tax credits, along with some of the highest quality wind sites, have attracted investors to this region. With no local demand, these wind farms rely on transmission lines to export their supply to load centers. Since 2008, ERCOT has proactively attempted to keep up with the interest in wind through the ambitious Competitive Renewable Energy Zone (CREZ) transmission expansion and more recently through the Panhandle Renewable Energy Zone (PREZ) assessments. Transmission options recommended by the PREZ analyses and approved by the Public Utility Commission of Texas are expected to increase transmission access to the Panhandle wind. Recent news that Lubbock Power & Light (“LP&L” or “Lubbock”) will integrate into the ERCOT system is also a positive development. LP&L provides much-needed local demand to the Panhandle wind, and the transmission reinforcements to integrate LP&L into ERCOT will further improve the Panhandle wind farm’s transmission access to the rest of ERCOT. Despite these positive developments, the Panhandle is projected to experience significant negative pricing unless additional transmission is built.

Evolution of the Panhandle Grid

Panhandle wind development started after ERCOT’s multibillion dollar CREZ transmission expansion. CREZ included a set of 345 kV transmission lines that connected the Panhandle region to the rest ofERCOT. At the start of CREZ construction in 2008, ERCOT queue had no generation units with interconnection agreements for the proposed Panhandle substations. Moving forward eight years, the region has added 2,459 MW of wind capacity. As of May 2016, the interconnection queue has more than 11,000 MW of proposed wind projects in the Panhandle region (more than 40 percent of the total across ERCOT). Approximately 25 percent (~2, 600 MW) of this capacity meets ERCOT’s firm capacity criteria.1 According to ERCOT’s recent planning reports, power exports from the Panhandle are currently limited to approximately 2,711 MW.2 This interface limit is inclusive of a 10 percent de-rate for reliability margins. Review of ERCOT’s real-time constraints reveals that the transfer limit was as high as 3,000 MW in some hours. The average transfer limit for the first five months of 2016 is 2,590 MW, while the lowest transfer limit during the same period was 1,853 MW.

Where a Lot May Not Be Enough

Through the initial PREZ reports released in April 2014 and December 2015, ERCOT has attempted to stay lockstep with the pace of wind activity but has ultimately fallen short.

In the April 2014 study, ERCOT released a road map that included system upgrade needs and the associated triggers in terms of wind generation capacity in the Panhandle. In Stage 1, synchronous condensers and double circuiting of the existing panhandle transmission loop were proposed as the most viable options at a 3,000 MW wind level. The trigger for Stage 2 upgrades was set at 6,500 MW of wind and includes a new 345 kV double circuit line from Ogallala to Long Draw and additional reactive power support.

In December 2015, the ERCOT board endorsed the Stage 1 upgrades. These upgrades are expected to provide approximately a 6003 MW increase in export capability (from the current export limit of 2,711 MW) and are expected to be in service by 2018. In its ruling, the board also made clear that “energizing the second circuit completes the CREZ project and no further transmission projects could be authorized under the CREZ order.”

The Panhandle has 2,459 MW of existing wind. In the five months after the extension of the production tax credit in December 2015, firm4 wind capacity in the region has increased by 600 MW to approximately 2,600 MW. By 2018, approximately 5,1005 MW of wind is expected to be operational in the Panhandle. At this level, the wind capacity is too much for the 3,332 MW export limit but far below the 6,500 MW trigger for the Stage 2 upgrades.

Read full article at ICP International