Atlantic Wind Connection Project Update. Mohamed M. El Gasseir, PhD. Alternating Current Transmission Systems Conference.

Transcription

1 Atlantic Wind Connection Project Update Mohamed M. El Gasseir, PhD High Voltage Direct Current & Flexible Alternating Current Transmission Systems Conference EPRI, Alto August 30, 2011

2 Agenda Background: The need for the AWC System design Identifying & quantifying AWC benefits Section 219 decision Next step: PJM approval 2

3 Background Offshore wind makes a lot of sense. Strong offshore resource compared to weak terrestrial resources Energy independence and jobs for the sponsoring states Inter regional wind energy diversity But the difficulty & expense of new transmission increases costs &slows progress Cost & construction barriers to radial transmission leads to higher energy cost without transmission network benefits Transmission problems add permitting delays &risk for offshore wind projects AWC s offshore backbone is the solution AWC is lower cost than radials and accelerates offshore wind development AWC s north south backbone provides congestion relief and increased reliability that lowers costs for ratepayers 3

4 Local roads or an interstate highway network? Planning ahead to avoid obstacles will save ratepayers money New York Pennsylvania New Jersey Washington DC Delaware Maryland Virginia 4

5 In addition to its lower capital cost, the AWC backbone is easier to permit. AWC allows wind farm developers to avoid all state and local permitting, except Coastal Zone Program consistency determination. Greater predictability, faster permitting and lower risk leads to a lower cost of capital and a lower cost of energy for ratepayers. Wind farm developer state permitting obstacles (NJ example) Using radial interconnections 1. Coastal Zone Consistency 2. Coastal Area Facility Review Permit 3. Freshwater Wetlands General Permit 4. Waterfront Development Permit 5. Tidelands Conveyance License 6. T&E Species Consultation 7. NJDOT ROW Use Permit 8. NJ State Park Crossing Easement 9. NJ Pinelands Commission Application 10. Additional municipal & county permits Using an AWC backbone interconnection 1. Coastal Zone Consistency 5

6 AWC System Design Washington DC Pennsylvania Delaware Maryland New Jersey New York 10 year plan to build 350 mile subsea HVDC transmission system off mid Atlantic states in 5 phases Enables up to 7, MW of offshore wind to be developed 12 or more miles off the coast Buildable because it can be permitted Renewable wind energy at scale Virginiai i 6

7 Congestion & reliability: hidden costs for ratepayers Additional land-based transmission is not the best way to relieve congestion. It is difficult and expensive to implement, and vulnerable to typical failures (including sabotage). Congestion is the inability to deliver power where it is needed. Eliminating congestion would provide huge value to consumers. For example, congestion costs $1 $2 billion a year in NJ. An offshore backbone is more easily built, electrically separate, and more secure. 7

8 Identifying and Quantifying AWC s Benefits NJ Example: AWC Supporting 3,300 MW of Offshore Wind Capitalcost approx. $14 billion ($4,200/kW) Benefitsapprox approx. $22 billion Benefit Offshore wind energy value Energy market price suppression AWC production cost savings and capacity market savings Preliminary NPV Estimates $6 billion Notes Value of offshore wind energy generated by 3,300 MW) of wind farms. Wind energy bids into the auction based energy $8 billion markets at zero andreduces energy market clearing prices. $1.7 billion AWC provides production cost savings by promoting more efficient dispatch of generation. AWC provides a controllable transmission network that has significant capacity value. Reliability improvements $2 billion AWC improves voltage and frequency regulation and can help re start the grid after a blackout. This estimate is a fraction of the estimated cost of the 2003 northeast blackout ($7 $10 $10 billion). Tax revenues from job creation and economic activity $2 billion The Brattle Group estimated economic activity at $30 $52 billion and job creation at 183, ,000 FTE job years for 6,600 MW of offshore wind and the AWC backbone. We estimate associated tax revenues at a small fraction of this economic activity $2 billion. Value of emission reductions $2.6 billion Offshore wind produces significant reductions in CO2, SO2 and NOx. Assuming $30/ton the value of reduced CO2 emission s alone is equal to $2.6 billion. 8

9 Benefits a New Jersey Investment Scenario Jobs As many as 180,000 FTE job years, or about 18,000 jobs, are possible from building and operating 3, MW of offshore wind capacity and the AWC transmission backbone. AWC investment AWC can offer jobs and facilities (approx. $2.9 billion investment, hundreds of jobs) Three NJ converter station locations Network control center AWC maintenance facilities AWC utility offices Industrial ldevelopment AWC can help attract other jobs and facilities: Submarine cable manufacture Platform manufacturing Converter assembly HVDC center of excellence Construction facilities Individual radial transmission projects are too small to attract industrial development in transmission related components. 9

10 AWC modeled offshore wind energy production costs 2011 Atlantic Grid Holdings LLC The yellow areas are lower cost. Given current turbine sizes and cost, water depth drives projects towards the coast. 10

11 Section 219 Filing FERC approved AWC Section 219 application AWC was granted incentive rates Development costs would be recovered subject to PJM RTEP approval

12 RTEP Acceptance FERC Order Od 1000: Beneficiaries i i pay PJM s Compliance filing due in Q3, 2012 Compliance Filing will spell out cost allocation rules per Order 1000 and a revamped RTEP We are working closely with PJM to ensure We are working closely with PJM to ensure AWC acceptance into the RTEP

13 Robert L. Mitchell Atlantic Wind Connection (240) Markian Melnyk Atlantic Wind Connection (240)