Exploration of resource and transmission expansion decisions in the Western Renewable Energy Zone initiative

Abstract

Building transmission to reach renewable energy (RE) goals requires coordination among renewable developers, utilities and transmission owners, resource and transmission planners, state and federal regulators, and environmental organizations. The Western Renewable Energy Zone (WREZ) initiative brings together a diverse set of voices to develop data, tools, and a unique forum for coordinating transmission expansion in the Western Interconnection. In this report we use a new tool developed in the WREZ initiative to evaluate possible renewable resource selection and transmission expansion decisions. We evaluate these decisions under a number of alternative future scenarios centered on meeting 33% of the annual load in the Western Interconnection with new renewable resources located within WREZ-identified resource hubs.Of the renewable resources in WREZ resource hubs, and under the assumptions described in this report, our analysis finds that wind energy is the largest source of renewable energy procured to meet the 33% RE target across nearly all scenarios analyzed (38-65%). Solar energy is almost always the second largest source (14-41%). Solar exceeds wind by a small margin only when solar thermal energy is assumed to experience cost reductions relative to all other technologies. Biomass, geothermal, and hydropower are found to represent a smaller portion of the selected resources, largely due to the limited resource quantity of these resources identified within the WREZ-identified hubs (16-23% combined). We find several load zones where wind energy is the least cost resource under a wide range of sensitivity scenarios. Load zones in the Southwest, on the other hand, are found to switch between wind and solar, and therefore to vary transmission expansion decisions, depending on uncertainties and policies that affect the relative economics of each renewable option. Uncertainties and policies that impact bus-bar costs are the most important to evaluate carefully, but factors that impact transmission costs and the relative market value of each renewable option can also be important. Under scenarios in which each load zone must meet 33% of its load with delivered renewable energy from the WREZ-identified resource hubs, the total transmission investment required to meet the 33% west-wide RE target is estimated at between $22 billion and $34 billion. Although a few of the new transmission lines are very longover 800 miles-most are relatively short, with average transmission distances ranging from 230-315 miles, depending on the scenario. Needed transmission expenditure are found to decline to $17 billion if wide use of renewable energy credits is allowed; consideration of renewable resources outside of WREZ-identified hubs would further reduce this transmission cost estimate. Even with total transmission expenditures of $17-34 billion, however, these costs still represent just 10-19% of the total delivered cost of renewable energy.vi

Improving estimates of transmission capital costs for utility-scale wind and solar projects to inform renewable energy policy

“…However, basing costs on interconnection reports tends to neglect the costs of region-wide transmission investments. A study of the western United States found transmission costs of $9/MWh or $314/kW when considering the integration of wind, solar, geothermal, biomass, and hydro resources (Mills, Phadke, and Wiser 2011). Finally, a study of utility-scale wind and solar transmission costs found costs of $0.83-$75/MWh for proposed western U.S. projects, with wind transmission costs often at least $20/MWh (Kahn 2010;.…”

“…Numerous stakeholders support continued growth of cost-competitive VRE, and many researchers have studied the potential for high VRE penetrations on the electrical grid (Sørensen 2008;BNEF 2018;Elliston, Diesendorf, and MacGill 2012;Connolly et al 2011;Mathiesen, Lund, and Karlsson 2011;Lund and Mathiesen 2009;Liu et al 2011;Shoshanna 2011; . To make VRE investment decisions, policy and electric-sector decision makers face numerous tradeoffs related to location constraints, solar/wind resource potential, supporting infrastructure requirements, and so forth (Mills, Phadke, and Wiser 2011). Analysts typically incorporate these tradeoffs into project benefit calculations (estimates of VRE energy and capacity value) and project cost calculations (estimates of VRE integration costs such as supply-demand balancing and transmission investment) (Mills and Wiser 2012).…”

Changes in the economic value of wind energy and flexible resources at increasing penetration levels in the Rocky Mountain Power Area

“…Without the virtual load, the day-ahead * The load growth rate is based on a load forecast developed for WECC transmission planning studies and includes the impact of state and national efficiency programs. † Specifically, at 30% wind penetration, wind is procured from the WY_EA, WY_NO and WY_SO WREZ hubs based on the analysis in 35 . This analysis does not consider policy influences in wind siting decisions.…”

A Transmission-Cost-Based Model to Estimate the Amount of Market-Integrable Wind Resources

“…Here, the primary objective is neither to minimize the cost of the transmission investment, nor to maximize the market-based definition of social welfare, but to maximize the integration of wind generation into electricity markets while assessing the financial risk of the required transmission expansion/reinforcement. This way, the proposed model naturally yields an estimate of the amount of market-integrable wind resources at a given location and the resulting decision support tool may be very useful to conduct analysis complementary to those available in the technical literature, in which the economic potential of wind resources is appraised (see [15]- [17] and references therein). In these studies, however, crucial factors such as demand and wind uncertainty, load and wind correlation, investments costs and financial risk, market competition or network congestion are either accounted for based on estimates, not explicitly modeled, or just disregarded.…”