Distributed Generation Workgroup

Meeting Summary

May 20, 1999 - Washington, DC

First Interim Review Meeting

Upon returning from Europe, the NWCC’s Distributed Project consultant team presented refined project objectives, status reports on data collection, initial key findings, and preliminary elements of the written report for review and discussion by Distributed Workgroup members and interested parties (see Appendices A1 and A2). The meeting allowed for early guidance on project direction and interpretation of findings for this jointly funded NREL/EPRI stakeholder-collaborative research project. As a consensus-based NWCC report, credibility among all sectors was identified as an important goal; review and feedback from skeptics including traditionally-oriented utility engineers will be critical to the project’s success.

Caution was raised about references to "gold mines" and "Saudi Arabia" for wind energy and how the outreach package surrounding the research is conducted, but by the end of the day, all Workgroup members present felt comfortable with the overall direction of the project to provide in-depth, objective information.

• Participate in project weekly check-in calls with Ed DeMeo, Brian Parsons, and Joe Cohen as desired (11 am ET Mondays);
• Review and provide feedback on Tom Wind’s first cut computer model of county penetration limits, COE threshold levels/scenario calculations, and menu of economic data;
• Participate in dialogue to flesh out what insight from and interpretation of European policies should be included in report;
• Recruit REC staff or board member for Workgroup;
• Hold Review Meeting in August/September;
• Caucus with other stakeholders in sectors;
• Review written report at October NWCC business meeting;
• Present work to other regulators at NARUC meeting in November in Florida;
• Approve final report at December NWCC business meeting.

Overview of Workplan and Status Report

Joe Cohen of PERI reviewed overall project objectives (Appendix B) and major changes in the workplan (Appendix C). Based on feedback received during and since the project kickoff meeting January 30, the consultants planned to draw heavily from European experience to build a knowledge base on distributed wind development for NWCC members and constituencies, and to evaluate the technical potential for integrating dispersed wind turbines and an economic threshold for market entry in the U.S. Concern was expressed that such a feasibility assessment might be taken out of context and misused; Workgroup members advised the consultants to focus on potential technical limitations to determine a rough order of magnitude of installed wind power capacity that Plains states’ distribution systems can handle. Although in at least one area in Denmark wind capacity exceeds 100% of the local load, for three-phase lines in the U.S., the upper limit will not likely exceed 20%.

Joe Cohen described data collection efforts and the team’s investigation in Europe which included an examination of case studies similar to dispersed U.S. installations to help compare interconnection issues, national utility standards, and financing/ownership structures. The team also studied infrastructure, policy drivers, and resource/site assessment practices – since wind regimes in Denmark are largely a function of roughness, manufacturers forego long-term monitoring for WindAtlas-based estimates with a production guarantee within 10%.

Interconnection and Power Quality

Tom Wind of Wind Utility Consulting outlined his contributions to the project (Appendix D) from his perspective as a utility engineer. He found much to learn from Europeans on how to evaluate wind power’s impacts on the electric system and applicable standards; in fact due to low energy prices in the U.S. it is surprising that distributed wind development is happening here at all. Similar to Germany’s Feed Law, net metering polices are serving as a driver for small-scale projects in many states. Since wind turbine interconnection has become so routine in Europe, they have developed a cut-and-dry cookbook approach, with maintaining power quality as the primary concern. Due to the "3P" or shadow effect of blades passing the tower (tubular more so than lattice designs) as well as wind gusts varying up to 50% minute to minute, turbine power output fluctuates and may cause flicker in nearby houses. IEEE standard 519.92 on harmonics governs installations in this country but a comprehensive approach to evaluate combined impacts comparable to Europe’s "P_ST" flicker severity factor has not been spelled out.

Discussion topics included:

• NSP’s experience with harmonics related to 25 MW Kenetech installation requiring an inverter adjustment;
• Need for upgrades to feeder lines -- Denmark’s pool of funds collected as a surcharge to all customers for 1/3 the cost of distribution system reinforcements;
• How European standards were developed and enforced (political and cultural context);
• Lack of familiarity and trust with wind generation among U.S. utilities, burdensome requirements significantly impact small projects;
• UL testing and certification of inverters – PV industry ahead of wind with institutional backing;
• No reported injuries to line workers, only construction accidents.

Rural areas in the U.S. have much lower load density, so turbines can increase voltages at the end of weak lines; wind gusts may cause power surges which need to be controlled. The distribution system was not designed to support decentralized generation and the cost of necessary reinforcements often far outweighs any potential T&D benefits such as reducing line losses. A major finding of the research to date is that connecting wind turbines into the distribution system is quite costly, and that economics favor wind farms or at least cluster installations. The distance to a substation is a big factor; while in Europe land availability is the primary siting driver, in the U.S. interconnection opportunities may mark the best sites. Workgroup members encouraged the consultants to quantify how much penetration and the size of installations a typical distribution system can handle.

Distributed Wind Potential Case Study

Two options were discussed – a statewide grid-by-grid analysis of load density versus the wind resource, or a detailed look at one county’s load density, wind resources, and T&D lines. With the second approach, turbines can be sprinkled in until impacts are seen on the system to determine the scale of feasible development. Once the computer model is developed three penetration levels can be determined: with no reinforcement, reasonable improvements, and $100/kW investments in T&D upgrades. workgroup members supported the detailed county study focusing on technological limitations, but recommended the authors be careful not to recommend any of the scenarios but to couch the results to prevent misinterpretation. The report should note that the evaluation is only looking at the grid and wind regimes, not environmental/land use factors; European development is now moving toward larger turbines and projects offshore for both aesthetics and economics.

Workgroup members discussed the possibility of extrapolation from such a site-specific case study, and recommended offering the methodology developed for assessments in other areas rather than suggesting multipliers to adjust results. Key elements and assumptions need to be identified, and a preliminary scenario will be circulated for review by members and the European consultants once the data has been collected and the computer model is created.

A participant encouraged the consultants when writing the report to keep in mind their target audience, which may include county officials and community planners. However members recommended not shying away from technical detail; a summary version for general audiences can be extracted from the full text.

Distributed Benefits

While Denmark does not assign generation capacity value to wind, Tom Wind noted that the MAPP power pool value for intermittent resources depends on a 50/50 probability of generation during monthly peak load periods. This value may be enhanced through more accurate 36-hour forecasting, which will also help dispatch planning.

Hank Zaininger of PTI described a "shopping list" of potential benefits from distributed wind development (Appendix E), such as helping defer system upgrades and enhancing the distribution capacity value. However these benefits vary a great deal for each site and can be quite difficult to quantify. Workgroup members recommended a detailed review of potential benefits is not worth the time necessary to move beyond a general overview or to include a specific case valuation study; previous NREL and ORNL studies can be described and referenced. Tom Wind has co-authored a recent report, "Wind on the Wires," on wind energy impacts and benefits which will nicely complement the NWCC work.

Workgroup members pointed out that many of the "benefits" can also be drawbacks; the analysis and mitigation necessary to turn negatives into positive effects to justify individual turbines may stall development. Hank explained that if wind turbines may actually be able to improve power quality and reliability on weak systems if their output is controlled and short-term storage or standby generation is available. Capturing distributed wind’s values and maximizing its benefits may help "sell" the concept to utilities, changing oppositional attitudes or simply accommodating wind turbines to integrating them with the system. Another member noted that the most valuable piece of Hank’s work will be descriptions of "weak" vs. "strong" systems and the comparative effects of induction and variable speed turbines.

While one member recommended that benefits and costs be considered a wash, which is the basis of net metering policies, others felt that attention to the various factors is important, as is counterbalance in the report.

Costs, Infrastructure, Financial and Policy Areas

Joe Cohen and Tom Wind described preliminary findings and plans for the report (Appendix B, page 7-12; Appendix D slide 9). Workgroup members encouraged including a comparison to the conventional U.S. model of 30-40 turbine wind farm installations, although after the kickoff meeting this was removed from the workplan. A member suggested creating a matrix to compare payback periods by purchase rates; consultants noted that the wind resource and distribution costs/benefits also need to be incorporated.

The consultants have identified several infrastructure factors supporting distributed wind development in Europe, including O&M training, owners’ and manufacturers’ associations, and steady production (100 units/year). Research on financial factors revealed a major surprise – turbine owners can receive specialized low-rate loans without out-of-pocket payments. Legal requirements are not as strict due to a cultural environment of cooperation and following voluntary guidelines. Diversifying farmers’ incomes has helped reduce risk of foreclosures; farmers are used to investing in capitol and accelerating depreciation for income tax relief.

The form of ownership and financial participation was found to be key to public acceptance. European policies designed to support widespread private ownership of wind turbines led to distributed development. Workgroup members recommended that descriptions of the Feed law and tax subsidies in place in Europe included in this report can be followed with next step recommendations for the U.S. as part of Ed Holt’s green marketing work.

Local Identity (Social) Implications and Local Economic Impacts

Joe Cohen reviewed the final report sections (Appendix B, page 13-14), noting that cooperatives will be key to distributed development in the Midwest where infrastructure support and tradition are already present. A handful of collaborative projects are underway, with Iowa municipal utilities, Minnesota RECs, and diverse investors in Colorado. Local officials in Europe have recognized wind power as an important contributor to the economy, generating increased landowner revenue and property taxes. A participant noted that a public hearing on net metering in Iowa drew broad support from farmers, teachers, AARP members, etc. but REC leadership has not engaged the issue; local boards often have sole control over interconnection requirements and can prevent projects from moving forward. While coops are recognizing the need to respond to customers, they are an important constituency to educate about distributed wind; the NWCC should involve NRECA and its members in this work.

Attachments

A1 First Interim Review Meeting Participant List
A2 Distributed Workgroup Members and Interested Parties
      Contact Directory
B   Overall Project Objectives and Preliminary Findings Overheads
C1 Work Plan for NWCC/NREL Distributed Wind Research Project (revised 4/9/98)
C2 Report Draft Outline & Project Schedule (as of 4/9/98)
D Distributed Wind Project Contributions from Tom Wind Overheads
E Distributed Generation Benefits Overheads