Transcript Development Process (LTF)

Role of Investor Owned Utility in
Development of Wind Energy in
Iowa from an Engineers
perspective
Jeff Bales
June 2011
Who are we?
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Alliant Energy Corporation is a public utility holding company headquartered in
Madison, Wisconsin. Alliant Energy's two regulated utilities include Interstate
Power and Light Company (IPL) and Wisconsin Power and Light Company
(WPL). In addition it has several other non regulated entities. Two of those are
RMT and CRANDIC.
WPL generates, purchases and sells power in Wisconsin and has some
ownership in the American Transmission Company who provides transmission
service in Wisconsin
IPL generates, purchases and sells power in Iowa and Minnesota. Its service
territory serves the southern part of Minnesota and also is scattered
throughout the state of Iowa. IPL sold their transmission system to ITC (Iowa
Transmission Company)
Who are we ? Alliant Service Territory
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The IPL service territory is scattered due to the merging of several smaller
utilities in the past 20 years named Iowa Electric, Iowa Southern, and
Interstate Power and Light.
Energy Delivery Update
Technology
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Confidential
Alliant Strategic Plan
Alliant Energy Utilities Strategic Plan is built on three key
elements:
 Competitive Costs
 Reliable Service
 Balanced Generation
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Balanced Generation
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Our sources of electric power in 2007 were 54% coal, 6 % natural gas and
39% Purchased Power.
The 39% purchased power leaves our customers to unpredictable fuel costs.
These fuel cost can sometimes make up 50% of our customers bills.
Due to state and federal legislation it is important that we have a balance mix
of generation.
Alliant now owns and operates a total of three wind farms
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Cedar Ridge (68 MW near Fon Du Lac Wisconsin)
Whispering Willow (200MW near Iowa Falls Iowa)
Bent Tree (200MW near Albert Lea Minnesota)
Thru second quarter of this year the owned wind farms and Purchase Power
Agreements made up 6% of the generation in our service territory.
We have several locations under development such that if it makes sense to
add more wind to our fleet we will do so.
Role of Investor Owned Utility in
Development of Wind
Investor owned utilities are able to see the entire process from beginning to end.
Have key roles in the paradigm shift as significant milestones occur.
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Contracts for Purchase Power Agreements
Owning Wind Farms
Operating Wind Farms
Role of Investor Owned Utility in
Development of Wind
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Owning Wind Farms
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Forecasting the output of wind farms
Impact is to Production Tax Credits that are forecasted in our financials on a
quarterly basis.
Impact to our fuels forecast
Impact to the remaining fleet of generation in the area
Development Process – Long Term
Forecast (LTF)
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Development Process (LTF)- Wind Source
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The P50 number represents the probability of that level of generation being
met.
Probability numbers are used for different circumstances relative to bank loans
and in some instances negotiations around a purchase power agreement.
This number only takes into account the assumed losses and the statistics
around long term data.
One forecasting vendor is presently challenging some of the historical
information coming out of these reports (nationally) based on poor data sets
from the different ways of collecting long term data and comparisons to actual
data.
Part of due diligence is the comparison of a utility wind owned facility to a
purchase power agreement.
Bottom Line- When comparing different alternatives understand which P value
you are comparing to.
Development Process (LTF)Transmission
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Midwest Independent System Operations is the controlling entity for the state
of Iowa at the Regional level
Two transmission utilities presently provide the majority of services for MISO
Our two owned wind farms are located in the Iowa Transmission Company
footprint of service.
Currently each of our 200MW wind farms are working within a provisional
Generator Interconnect Agreement.
MISO continues to do studies to accommodate customer base however timing
of such studies and implementation seem to be in the 5-7 year time frame and
not in the current two to three year cycle.
Optional Studies have been completed by MISO for Alliant under, at that time,
current conditions and also with certain assumptions by the customer.
Under these conditions a Provisional Generator Interconnect Agreement can
be pursued with implementation in the 14 month timeframe while larger
studies continue.
Example of Optional Study Result (LTF)
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Development (LTF)- Bringing them
together
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Previous number represents the Provisional Limit and is posted by MISO
quarterly. In some instances this can change which will effect your forecasted
outputs.
How do Purchase Power Agreements handle Provisional status ?
Internally owned Wind farms
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Power Curves
EAPC vs. Calculated
250.00
200.00
Power MW
150.00
EACP Power Curve
Calculated Power Curve
100.00
50.00
0.00
0
5
10
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Wind Speed m/s
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Development Process (LTF)-Internal
xxxx - May 2011
Variance Report
70,000
60,000
MWh
50,000
40,000
30,000
20,000
10,000
0
-10,000
-20,000
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Wind
Curtailments
Reduction due
to 165 MW Op
Limit
Total
Forecast
47,925
0
0
47,925
Actual
60,920
-12,112
-1,163
47,645
Variance
12,995
-12,112
-1,163
-280
xxxx Observed Power Curve
MAY 2011
180
160
140
120
MW
100
80
Series1
60
40
20
0
0
2
4
6
8
10
-20
Wind Speed m/s
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12
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Development Process (LTF)
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What makes up the other curtailments?
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Two buckets
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Operations Curtailment
Economic Curtailment
Development Process(LTF)-Operations
Curtailment (MISO document June 2010)
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Wind Farm that is registered Intermittent Resource or (IR) cannot be
dispatched as part of the real-time dispatch software at MISO
Result of this necessitates manual curtailment by MISO to relieve transmission
constraints
LMP node under this condition does not reflect congestion
Results of these conditions were that until April of this year 90% of
curtailments were operational in nature and not economically based.
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Development Process(LTF)- Economic
Curtailments
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Beginning in April Alliant Energy wind farms began seeing much more volatility
in LMP prices at the wind farms.
Result of this necessitated manual curtailment by Alliant GDC to relieve
economic concerns over negative LMP prices
Due to timing issues Alliant GDC could not keep up with the changing 5 minute
LMP pricing.
Results of these conditions were that a large shift in curtailments between
operations and economic began to change on a percentage basis.
As a result Alliant has signed up Wind Farms for Dispatchable Intermittent
Resource so it can take advantage of automatic control to maximize efficiency.
Two of our Three wind farms will implement this feature in September.
Forecasting- Economic Curtailments
Date
1-Apr-11
2-Apr-11
3-Apr-11
4-Apr-11
5-Apr-11
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April-11
Generation
(Revenue) /Expense
($28,514.55)
$85,561.15
($10,861.37)
$13,299.28
($10,103.95)
Volume
-1,963,000
-1,040,000
-977,000
-1,499,000
-609,000
Development Process (LTF)-Economic
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Existing Purchase Power Agreements do not have language to address issues
around negative LMP.
When new PPA are negotiated this will definitely be taken into account.
Will have impact on developers ability to execute on loans and quality of their
forecast
Present PPA did not have scrutiny around producing at negative rates.
Impacts operations as well with most contract services being driven off
availability.
Present take is on shoulder months where load vs generation has base units
backed off to minimum will be the months where forecasts will be impacted.
No longer can assume the best wind months are the best for wind farm output
presently at Alliant.
Summary Long Term Forecasting
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Investor owned utilities are learning that the wind forecast is just one
component of the forecast.
As wind generation continues to make penetration expect local congestion
issues to continue. Investor own utilities will need to understand all conditions
as the wind becomes more of a segment of the generation on how there fleet
of generation will be dispatched.
Wind farms must develop a y=f(x) concept to ensure they manage each
component of the forecast well to understand the dynamics moving forward
and are able to report to their customer base.
Vendors and suppliers of forecasting services will need to get into the
operation segment of wind farms to understand controls and maintenance to
provide turn key services. Signals from turbines as it relates to local conditions
will become next generation of improvement in short term forecasting