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GVEA rejects Delta wind proposal
In another skirmish in an ongoing battle over the desirability or otherwise of connecting wind power into the Alaska Railbelt electrical power grid, Fairbanks utility Golden Valley Electric Association has rejected an interconnection request from Delta Wind Farm Inc. Delta Wind Farm already has a small 2-megawatt wind system at Delta Junction connected to Golden Valley’s transmission system. But the wind farm company, owned by Alaska Environmental Power LLC, wants to build a new, larger farm at Delta Junction, with a capacity of 13.5 megawatts.
Golden Valley has evaluated the request under the terms of its tariff that the Regulatory Commission of Alaska approved in 2016 for the connection of renewable energy sources. That evaluation has concluded that the connection does not meet the tariff requirements, and that the wind farm would unacceptably reduce the reliability of Golden Valley’s system while also increasing the cost of electricity for the utility’s customers, Golden Valley told the commission in a March 15 filing.
The tariff that Golden Valley is using is itself the subject of an administrative appeal in Alaska Superior Court by Alaska Environmental Power.
Questions of cost The issues surrounding wind farm interconnection relate to the cost of the power and the fact that wind energy is intermittent: The power output from a wind farm fluctuates as the wind strength at the farm rises and falls. These fluctuations must be counterbalanced by equal and opposite fluctuations of other power sources on the electricity grid: How much this power regulation costs and how it is paid for is a contentious subject. Also, in terms of the cost of the wind power, a key parameter is what is referred to as the “avoided cost,” the cost of the power that the wind power displaces: The higher the avoided cost in relation to the wind power cost, the more beneficial is the wind power, and vice versa.
Under the terms of the federal Public Utilities Regulatory Policies Act, or PURPA, electric utilities are required to purchase power under reasonable terms from qualifying, independent renewable power producers. The RCA has adopted PURPA regulations in Alaska. The Alaska regulations require a utility to calculate both the cost of integrating a varying renewable power source into its system and the benefit to be gained from the use of the renewable power. The regulations also use an incremental approach to determining the avoided cost associated with the renewable source, an approach that assumes that a utility will preferentially displace its most expensive power sources through the availability of the renewable energy.
Golden Valley has argued that its new renewable energy tariff complies with the RCA regulations and the RCA has approved the tariff. Alaska Environmental Power has claimed that the tariff is illegal because it does not, for example, appropriately account for Golden Valley’s capital costs of its power generation, and that the tariff does not correctly allow for integration costs and integration benefits. In the latest twist in the resulting appeal in Superior Court the RCA has elected not to participate in the case.
Impact of power regulation In rejecting the request to connect a new Delta Wind Farm to its system, Golden Valley says that the need to regulate the fluctuating power from the farm would put stress on the power generation units used to provide the power regulation, thus adding to system maintenance costs and adding risk to the reliability of Golden Valley’s power supply system. Moreover, the fluctuating power output from the new wind farm would be highly correlated with fluctuations from the two wind farms that Golden Valley already has connected to its system, Golden Valley says. Thus, the variability of the wind power would increase substantially, but with no offsetting benefit from increased diversity of power sources, the utility says.
Currently, Golden Valley does not need any additional power generation to meet its customers’ long-term electricity needs and, although the utility supports renewable energy, the utility is not using all of the existing wind power connected to its system, Golden Valley told the RCA.
Golden Valley commissioned a system modeling consultant to analyze the likely system operating characteristics and financial impacts resulting from the integration of the proposed new wind farm into the utility’s power supply system. The analysis found that regulation of the power from the farm would require the increased use of Golden Valley’s less efficient fuel-burning power generation plants. The consequence would be an increase in Golden Valley’s annual fuel costs of $19.9 million in 2018, rising to $82.7 million by 2037, Golden Valley told the commission.
Because the integration of the wind farm would result in significantly increased costs to Golden Valley’s members, Golden Valley is not obliged to connect the wind farm to its system, Golden Valley told the RCA.
AEP’s response Mike Craft, managing partner of Alaska Environmental Power, vehemently disagrees with Golden Valley’s position. Craft told Petroleum News March 28 that the analysis commissioned by Golden Valley grossly overstated the fuel cost that Golden Valley would incur by integrating the Delta Wind Farm, especially given the modest size of the wind farm in relation to Golden Valley’s total power needs. Golden Valley already has to use its less efficient power plants as spinning reserves, to guard against shortfalls in non-firm power supplies that the utility obtains from Southcentral Alaska through the single power transmission intertie between Southcentral and the Interior, Craft said.
Craft also disputes Golden Valley’s assertion that the fluctuations in the power from Delta Junction would correlate with fluctuations in the utility’s existing wind power resources. Most of that existing wind power comes from Golden Valley’s wind farm at Eva Creek, a location at a significantly higher elevation and in a completely different wind system from Delta Junction, Craft said.
Craft, who has been pushing his wind power concept for the Interior for several years, expressed his extreme frustration at what he sees as utility obstruction to using power from an independent source. He said that he had purchased the Delta Junction wind farm site because of its particularly favorable location relative to the wind system that flows from the Wrangell-Saint Elias Mountains north through the Tanana Valley. The existing wind farm at Delta Junction enjoys a capacity factor of around 71 percent, including 18-day wind events, during the winter, when electricity demand is at its highest, Craft said.
“That’s unheard of anywhere in the world,” he said.
Croft also commented that a wind power integration study conducted in 2010 concluded that, while the Eva Creek could swing its input to the transmission grid by 24 megawatts in less than 10 minutes, the maximum swing at Delta Junction would likely be 10 megawatts.
- ALAN BAILEY
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