While much has been made about the challenges that arise with large-scale power plants attempting to connect to the U.S. power grid through transmission and substations, relatively little has been said when it comes to smaller-scale renewable energy projects, such as community wind projects, trying to do the same.
Community wind projects, developments owned by co-ops or by local communities that are generally under 50 MW of generating capacity, need to be able to connect to the transmission and distribution systems in their area, but sometimes can be held up by costs, paperwork or non-acceptance from the community. Some utilities include the smaller projects within their own developments but often times community wind developers make a go of it by themselves. They find the issue is not from lack of assistance from larger utilities, but from connection problems, project costs and lack of communication between project developers and transmission companies.
Several companies, such as Basin Electric Co-op, Northern Power Systems and Juhl Wind, have helped to develop several community wind projects throughout the U.S. and say a major problem some of these projects face is cost-based.
They don’t have the economy of scale and are more costly than larger projects, said Ron Rebenitsch, manager of alternative technologies and project manager for wind projects with Basin Electric. Rebenitsch said he was building a 151.5-MW project in South Dakota and was approached by South Dakota Wind Partners who wanted to add seven more turbines for a total of 10.5 MW. Rebenitsch was able to integrate that into Basin’s environmental impact statement. The utility then bought and built the turbines and will operate them.
“Now, they can be cost-competitive with a larger project,” Rebenitsch said.
“A project’s cost per kilowatt-hour (kWh) increases as the size of the project increases,” Rebenitsch said. The economy of scale is ideal for a project between 80 and 100 MW, which is a bit larger than a community wind project is able to leverage. He emphasizes to project owners that finding the economy of scale is usually the hurdle of the project.
Which then begs the question: Who pays for the projects when community wind developments are unable to afford any part of the project from the planning to the operations?
We try to work with community wind, but we have to be careful that we don’t provide a subsidy, Rebenitsch said. Community wind projects typically don’t have money to hire engineering resources to be successful.
“In the case of South Dakota Wind Partners LLC, which includes some 650 local investors, they were able to keep their project scale manageable without having to add new switchyards or transmission lines by folding their project in with the larger project,” Rebenitsch said.
Rebenitsch said that small-scale projects have the opportunity to cut costs on turbines, too, if they work with larger projects.
“There has been a significant drop in turbine prices in the past few years, but bigger companies get a bigger price drop,” Rebenitsch said. “The sweet spot for community wind is if they can tie in to local distribution that does not have big voltage.”
The planning services that larger companies can provide to community wind developers, such as receiving regulatory approvals, buying the necessary equipment and studying transmission lines and distribution stations, may be priceless.
“When I sited (SD Wind Partners), I determined where the congestion points are to avoid on the transmission line,” Rebenitsch said. “That takes expertise, engineering and money. You’ve got to have those resources to avoid going down a blind alley in terms of siting a project.”
Community Wind 101
Nick Sershen, vice president of finance with South Dakota Wind Partners LLC, said partnering with Basin Electric made the process a smooth one.
The South Dakota group let Basin handle the permitting and regulatory steps. SD Wind Partners then negotiated its own power purchase agreement, construction and operations and maintenance contracts with Basin for the 10.5-MW wind project.
“They were basically our general contractor,” Sershen said.
The project is located adjacent to the 100 turbine, 150-MW capacity South Dakota PrairieWinds Project, owned by Prairie Winds SD1 Inc. Prairie Winds SD1 Inc. is a unit of Basin Electric.
Prairie Winds built and is operating the community wind farm and will buy the electricity generated from the development. As of May 2011, the farm was producing 3,859,000 kWh of electricity, according to the project’s Web site.
One thing that helped the project get off the ground was community outreach. SD Wind Partners held meetings for eight weeks and received $17 million in financial backing from the community by the time project construction started.
Another feature that helped was a different kind of business model.
“We sold our equity and our debt,” Sershen said. “The strategy broadened the amount of our investors and allowed everyone to be able to invest in the project without putting up a lot of money.”
Most of all, Sershen said the group’s project was successful because of the assistance they received from Basin and Val-Add Service Corp., the partner that developed the idea and put the business model together. Val-Add Service specializes in simplifying the start-up process of a project from concept to full operations.
On the other side of the project spectrum, at least one transmission company says they face challenges when adding any amount of generation to existing or new lines.
Jeff Schraufnagel, manager of interconnection services with American Transmission Co., said that without effective coordination among the transmission company, distribution company and power generator, adding even relatively small amounts of generation could have significant safety or reliability impacts on the bulk electric power system, and not just where the generation is connected.
“If we have a fault or a problem on the transmission system, even though generation is connected to the distribution system, we need to make sure it too is cleared as a source to the transmission fault,” Schraufnagel said.
Rebenitsch agreed. “People need to look at the grid like it’s a highway,” Rebenitsch said. “You can’t just hop on it without adding an interchange or an extra lane. It’s a system that is pretty delicately balanced.”
Any amount of power connected can have an impact further down the transmission line, Rebenitsch said.
“Security of the grid is paramount,” he said. “We have to be careful that we don’t cause overloads that could disrupt the system. For example, we could build a project in Minnesota that could burn out a substation in Nebraska.”
In terms of connecting projects to the grid, the amount added is also crucial.
“If you add 5 MW here, 10 MW there, the impact could still be significant, sometimes like one big generator” Schraufnagel said. “If you dismiss the small ones too quickly, that’ll be another one that’ll sneak up on you when dealing with reliability issues.”
Another tranmission reliability and safety issue is when power generators make modifications to their generation facilities and fail to tell the transmission or distribution company.
“There are always safety procedures, but workers can be surprised when they go to check on a line that is supposed to be dead and it isn’t,” Schraufnagel said. “It happens a lot more than you think.”
Schraufnagel said “That’s why we’d like to see more information shared between distribution and transmission operators.”
In areas that are more remote, power transmission can be greatly affected.
“In areas where load and generation is more sparse, one distribution generator can have a huge impact on the swing of power flows,” Schraufnagel said.
Schraufnagel said those are reasons why formal administrative code that would require any certain distribution-connected generation projects of any size to give notification to the transmission company would be helpful.
“You would love people to know what could happen before you get on the road,” Schraufnagel said, referencing Rebenitsch’s highway analogy. “Sometimes, the end results cause us to have upgrades to not only the distribution system but also the electric power superhighway, the transmission system itself.”