RENEWABLE ENERGY:

Bonneville Power to wind generators -- shut down, and you get free power

Correction appended.

The Bonneville Power Administration says it is preparing to sharply reduce the region's wind generators' output during extreme high water flows in the Columbia River system as a last resort to assure that hydropower dam operations do not threaten protected fish populations.

The pending order by BPA follows the rapid growth of wind generation along the Columbia River Valley and demonstrates the acute dilemma of too much wind, too much water, as the agency struggles to balance energy, economic and environmental laws and goals in the region. BPA operates the largest power marketing operations and transmission system in the Pacific Northwest.

Bonneville will hold a public hearing on the plan today and said it will make a final decision no later than April 1.

"They are in a tough spot," said energy consultant Randall Hardy, a former BPA administrator. He said BPA appears to have "locked in" to the mandatory curtailment of wind generation as the endgame solution when all else fails. "They need to have the ability to curtail wind generators and others. The concern I have is that it might preclude other solutions."

If the region's grid is carrying high power output from wind generators at a time when the river flow is extremely high, the combination of wind power and hydropower would exceed the demand for electricity, in expected scenarios.

BPA says in those circumstances, it would have to curtail wind generation or increase water flows over hydro dam spillways, bypassing dam generators. But excessive flows over spillways can raise nitrogen levels in the water below the dams, violating federal regulations that protect salmon and other fish species.

When laws, salmon needs and weather conflict

The answer BPA proposed last week is "environmental redispatch," an order to wind generators to cut back their output until river conditions ease, so that hydropower operations can be maximized to control spillage.

"After all reasonable actions to avoid excess spill during an over-generation event have been exhausted, BPA proposes to employ an environmental redispatch protocol as a last resort to comply with the Endangered Species and Clean Water Acts," BPA Executive Vice President Elliot Mainzer said in a letter to the region's energy providers and environmental organizations, with which BPA has been meeting on the issue.

BPA said it would provide wind generators with excess federal hydropower at no cost, which they could sell. And it will also try to limit the impact on wind producers by asking large coal-fired generators in the Pacific Northwest to agree in advance to take their plants offline during May and June, the expected high river flow period. The coal generators would be paid a small premium for doing so and could acquire replacement hydropower at market rates, from free to $12.50 per megawatt-hour.

The financial impact of curtailment on wind generators may be severe. Notes from a BPA-sponsored workshop in December record this warning: "BPA believes that displacement potential exists over periods of 6 to 10 weeks, and that the cost will be in the tens of millions of dollars as Northwest wind generation capacity grows to 6,000 megawatts from the current capacity." The wind generators could lost as much as $50 million per year under worst-case conditions of excess generation and limited transmission capacity to export power out of the region.

But BPA said it will not reimburse idled wind generators for the money they would otherwise be receiving from federal production tax credits and state renewable energy credits if they were operating.

"We feel it's not good policy to pay someone to take electricity when it's necessary to comply with the Clean Water Act and Endangered Species Act," BPA spokesman Michael Milstein said.

Can power help Calif. if it doesn't get there?

Between two-thirds and three-quarters of the wind generation in the Columbia River Valley is purchased to satisfy California's renewable energy mandate, but congested transmission lines limit the amount of wind power that is actually transmitted out of state.

BPA says the costs of federal and state production incentives should be borne by a broad group of taxpayers and ratepayers receiving the wind power, not concentrated on smaller subsets of consumers in the Pacific Northwest "with limited economic interest or benefits from the renewable generation."

Wind generation capacity has soared in the Pacific Northwest, from 250 megawatts in mid-2005 to over 3,250 megawatts at the end of last year, and more wind generation is being added. BPA is obliged to adjust hydropower flows to respond to rapid swings in wind generation, but its officials say its flexibility to continue that practice is nearing its limit.

High river flows in the Columbia River system are frequent in years when the snowpack is above average and an early onset of warm weather speeds the snow melt, BPA notes. Last June, strong Pacific jet stream wind currents brought storm systems and heavy rain into the valley. Snake River stream flows nearly tripled, and Columbia River stream flows nearly doubled. There is a 30 percent chance of a similar extended high water period this year, BPA said. Meanwhile, wind generation is still growing in the region.

The issue creates a complex storm of intersecting legal and fairness issues. The river system is managed to serve flood control, irrigation rights, navigation, endangered species protection, municipal water supply, power markets and utility interests.

Creating a 'perverse incentive' for coal

Utilities that sell excess power to California could see their revenues diminished by the additional free hydropower BPA would offer during high flow periods, Hardy said. Other utilities that generally purchase power to meet their requirements would benefit from the free BPA power.

BPA's proposal to provide free or lower-cost hydropower to coal-plant generators could create "a perverse incentive" for the coal operators to over-schedule generation at times when they were pretty confident that river flows would be high, triggering the BPA plan, the National Renewable Energy Laboratory said in a comment on the BPA proposal. "This could worsen the over-generation problem rather than improve it," NREL said.

"There are all kinds of legal issues," Hardy said. "There will undoubtedly be a lot of litigation and a significant amount of political activity, as well. ... That tends to make solutions more difficult, not less."

BPA noted that the Columbia Generating Station nuclear plant was taken down to the 20-to-25-percent range last summer to reduce over-generation -- the lowest level possible "without risking its ability to return to full power." It said it would have to study the costs of holding down nuclear generation as part of a solution to the wind-water dilemma.

Hardy and BPA officials agree that finding additional ways of dealing with excess river flow is vital, including increasing water storage in above-dam reservoirs and getting farmers to alter irrigation practices to reduce the wind generation cutbacks. BPA and the Bureau of Reclamation are studying the potential for increasing storage in the Banks Lake pumped storage reservoir above the Grand Coulee Dam.

BPA is expanding its transmission network, but that also takes years to carry out, officials said. BPA is also actively pursuing legislative amendments in California that would allow wind generation displaced by federal hydropower to still qualify for state renewable energy credits.

Whether these measures can arrive quickly enough to avoid the "last resort" curtailment of wind is now up to nature.

Correction: A photo caption in an earlier edition incorrectly identified the operator of the Grand Coulee Dam. The dam is run by the Bureau of Reclamation.

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