Clean Line says Oklahoma wind offers advantages for Georgia Power

Clean Line Energy Partners LLC told the Georgia Public Service Commission in Sept. 10 testimony that wind-powered electricity it will be able to wheel out of Oklahoma can help serve the capacity needs of Georgia Power.

This testimony was filed in response to a commission initative to examine issues related to the value of renewable and distributed energy resources in preparation for Georgia Power’s filing early next year of its 2016 Integrated Resource Plan.

“While solar energy has been a recent focus in Georgia, high capacity factor wind power also has an important role to play in a cleaner energy mix with less fuel volatility,” said Clean Line. “Wind energy is the highest capacity factor, lowest cost renewable energy resource. However, transmission access is the key constraint.

“Clean Line is developing the Plains & Eastern Clean Line (‘Plains & Eastern’), an approximately 700-mile high voltage direct current (‘HVDC’) transmission line to be located in Oklahoma, Arkansas and Tennessee. This project will deliver 3,500 MW of high capacity factor, low cost wind generation located in the Oklahoma Panhandle region to the Southeastern United States via a converter station near [the Tennessee Valley Authority‘s] Shelby Substation. Plains & Eastern will interconnect with TVA’s 500 kV system at this substation.

“Using TVA point-to-point transmission service, wind transmitted on the line can be delivered to Georgia Power and other TVA neighbors. Plains & Eastern is in an advanced stage of development and the current schedule projects energization as early as 2019. Georgia Power’s upcoming Integrated Resource Plan (‘IRP’) is an opportunity to examine the merits of high capacity factor wind energy and the Plains & Eastern Project.  We hope that this option receives a thorough evaluation in the hopes it can reduce costs and provide other benefits to Georgia electric users.”

The exact capacity contribution of Oklahoma wind to the Georgia Power system will need to be calculated based on the specific system parameters. Clean Line said an indicative example assumes that Oklahoma wind has a capacity contribution of 25%, and the value of avoided new capacity build is $141,200/MW per year, so that 500 MW of Oklahoma wind represents an annual capacity contribution of $18 million dollars per year, or a net present value of $165 million dollars assessed over 25 years.

In August, the U.S. Environmental Protection Agency finalized the Clean Power Plan which places limits on carbon emissions from existing power plants, including those in Georgia. Under the final Clean Power Plan, Georgia will need reduce annual carbon emissions from its power plants by 17 million tons (26%) from 2012 levels by 2030, Clean Line noted. “Imported renewables can count towards this compliance goal,” the company added. “The final rule clarifies that the state that drives the investment in a renewable resource can take credit for the associated carbon emissions reductions, regardless of the location of the renewable generation facilities.”

In 2013, Plains & Eastern issued a Request for Information (RFI) to gather information about wind projects under development in the Oklahoma Panhandle region. Seventeen project developers submitted information about 33 projects, 29 of which were under development and four of which were already operational, Clean Line told the Georgia commission. The average price of the most competitive 4,000 MW submitted in the RFI was $24/MWh. This is a flat price without escalation for 25 years. Without the federal production tax credit (PTC), wind can be developed in the Oklahoma panhandle region for approximately $40/MWh, Clean Line added.

Rather than signing a power purchase agreement (PPA) for wind, Georgia Power could instead choose to invest in wind generation in Oklahoma, Clean Line said. Due to its low cost of capital and tax capacity, Georgia Power’s ownership of wind may be able to provide more value to Georgia Power ratepayers than purchase of wind under a PPA.

The other major component of the delivered cost of wind to Georgia is the cost of transmission. Transmission from Oklahoma to the TVA system in Memphis across Plains & Eastern will cost approximately $20-25/MWh, Clean Line said. Plains & Eastern offers firm transmission service from Oklahoma to TVA at a fixed-price with no congestion risk. This service can be used in conjunction with TVA point-to-point transmission service to deliver directly to Georgia Power, which is estimated to cost approximately $8/MWh, Clean Line argued.

Clean Line said it performed a basic net load analysis to assess the impact of integrating Oklahoma wind on Georgia Power’s system and found that integrating 500 MW of wind would result in minimal increases in hourly system variability.

The Georgia PSC said in an Aug. 10 notice that it plans to hold an Oct. 20-21 workshop on what role renewable energy should play in the next integrated resource plan filed with the commission by the Georgia Power subsidiary of Southern Co. (NYSE: SO). The IRP Act requires the utility to file a plan, covering at least the next 20 years, at least every three years.

“Recently, issues have arisen in proceedings since the approval of the Company’s 2013 IRP regarding Renewables and Distributed Generation (solar, in particular), Utility Scale solar, Wind, Biomass and the value of these resources to the Georgia Power Electricity system,” said the commission in the Aug. 10 notice. “On July 10, 2014, the Georgia Solar Energy Industries Association (GSEIA), Vote Solar (VS) and the Interstate Renewable Energy Council, Inc. (IREC) filed a Petition requesting that the Commission establish and calculate the value of solar energy delivered to Georgia Power Company from customer-sited facilities. The Commission believes it is in the public interest to expand the issues raised in this Petition to include utility scale solar, wind, and biomass along with issues raised in the 2013 IRP and in other Commission proceedings held since the 2013 IRP and to incorporate them into Georgia Power’s 2016 IRP which is to be filed late January, 2016.”

The Southern Wind Energy Association (SWEA) said in Sept. 11 testimony in this case that in a recent Georgia Power Request for Information (RFI) for wind energy, the utility received information from 14 different companies, with 40 different projects representing 21 different locations. Information was provided on wind energy resources from the Interior region (Texas, Oklahoma, Kansas and Iowa), Great Lakes region (Illinois and Indiana), and Southern region (Alabama, North Carolina and Tennessee). Of the 37 project configurations analyzed, 30 of them had positive net benefits, with the majority of these having significant net benefits, the wind association wrote.

Not all wind energy resources have the same performance characteristics, the association added. Wind energy delivered by new High Voltage Direct Current (HVDC) transmission projects could provide significantly higher levels of capacity credit for wind energy resources. Two HVDC transmission projects provide another path for accessing low cost Oklahoma and Texas Panhandle wind energy resources moving into the southeastern U.S., it said.

  • Clean Line is developing the Plains & Eastern Clean Line, which will connect up to 3,500 MW of low cost Oklahoma Panhandle wind to Tennessee. The wind energy resources connected will not have to wheel across the Southwest Power Pool and Midcontinent ISO South grids and will instead be delivered directly to TVA’s service territory with no wheeling rate risk or congestion risk.
  • Pattern Energy has proposed another HVDC project, the Southern Cross, which will connect the Electric Reliability Council of Texas through Louisiana to a substation in northern Mississippi. This project will access Texas wind energy resources and may be able to connect southern states with 3,000 MW of low cost wind energy.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.