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Transmission & Wind: Lessons from the Midwest

January 31, 2013 in Electricity, Reports & Whitepapers

The Midwest Independent System Operator (MISO) efforts on transmission planning and wind integration in the last decade provide key lessons on how to expand wind generation while supporting a robust and efficient energy market. MISO now has over 12,000 megawatts (MW) of wind connected within their footprint and recently approved $5.2 billion of ‘multi- value’ transmission projects (MVP’s) that will help deliver up to 21,000 MW more wind energy and other significant benefits to the MISO system.

Some of the key lessons learned are highlighted below:

Transmission Planning

  • Transmission planning must address a range of issues and objectives, including reliability considerations, state and federal policy (e.g., state renewable energy policy), economics, off-peak delivery of energy, and capacity requirements. Renewable energy, with the majority being wind generation, is required by state legislation in the MISO region, and transmission can help bring that wind generation at the lowest cost to the consumer.
  • Transmission planning must include key stakeholders to help develop a roadmap for the future. In the Midwest, organizations such as the Midwestern Governors Association, the Organization of MISO States (OMS), MISO stakeholders and staff have worked together to develop and inform regional studies. Such studies have enabled Midwestern stakeholders to identify how to achieve state renewable policy mandates and other objectives while providing the lowest overall cost to consumers.

Procedures for Connecting to the Grid Must Favor Projects That Demonstrate Readiness

  • In the past, projects in the queue to be connected to the electric grid have been at widely differing stages of readiness, which has had the net effect of bogging down the process. Experience in the MISO footprint illustrates how procedures for projects to ‘queue’ up for connection to the electric grid need to give preference to those projects that have done the most to demonstrate that they are ready to be built, and that align best with the overall development of expected electric generation projects. This will require more cooperation through cost allocation and improved queue processes as higher cost interconnections are required in the future.

Emerging Operational and Market Practices Help Integrate Wind Generation More Economically

  • Large balancing areas ease the integration of wind. MISO’s large wind balancing area (i.e., being able to draw on wind from across a large geographic area) demonstrates how a larger area with a relatively low level of wind generation compared to the demand for electricity is more effective than numerous smaller balancing areas with high levels of wind compared to demand. To understand why this is the case, one can think of the fact that it’s generally windy somewhere if you are able to draw from a large enough geography.
  • Shorter dispatch periods reduce problems in integrating wind by reducing the error of forecasting wind generation and load. MISO has a real time energy market with a 5 minute dispatch.
  • Geographical diversity across MISO’s footprint reduces wind and load variations to improve the wind product. It also adds to the capacity credit (MW allowed for capacity rating in MISO) for wind, but more robust transmission is required to see these benefits. Geographic diversity is also an important component of distributed economic and jobs impacts to the MISO states.
  • Improved wind forecasting helps operators of the electric grid have a better understanding of exactly when to expect the wind to blow, thereby avoiding excessive wind curtailments (when operators have to force wind turbines to shut down because their electricity is not needed). It also helps avoid requiring excessive spinning reserve requirements (which is the amount of electricity that power producers must be able to deliver on a moment’s notice, say when the wind dies down). Wind forecasting is used to establish the best available information for wind generators to bid within the Dispatchable Intermittent Resources tariff that requires wind generators to submit a day ahead bid into the energy market, as other generators do. Wind energy is too large a resource and would create large errors if there were not an estimate of the wind energy in the day ahead market.
  • Ramping products are being developed to allow generation other than wind to respond to wind variations. The Ramping products supply reserve capacity that can be used to improve the ability of generation to follow the load requirements. Load and generation must match within a small error band.

High Voltage DC (HVDC) transmission may have a place in the future electric grid

  • HVDC transmission has the characteristics to produce economic benefits that would support a business case to build the lines from both energy and capacity sources.
  • HVDC transmission can improve the energy market efficiency of inter-regional markets by scheduling power flows according the market signals to reduce production costs. The benefits from the HVDC transmission would be able to pay for the transmission plus some margin. A 1.25:1 benefit to cost ratio has been suggested for FERC Order 1000. Load customers receive direct benefits from lower prices or lower production costs. The generators providing the lower cost energy receive increased revenue by supplying the energy.

Authors: Dale Osborn, Consulting Advisor, Midwest Independent System Operator; Jennifer Christensen, Energy Policy Specialist, Great Plains Institute; and Mike Gregerson, Consultant, Great Plains Institute 

Untapped Potential – Swine Manure as a Biogas Feedstock

January 20, 2013 in Transportation & Fuels

The United States has an enormous amount of untapped potential for collecting biogas from organic waste streams to produce useful forms of energy. Most of the U.S. biogas development in the last 20 years has used dairy manure as a feedstock source. Development has also occurred at wastewater treatment facilities or food processing facilities with a wastewater stream. Continue reading »

Anaerobic Digestion on Swine Farms: Assessing Current Barriers and Future Opportunities

January 20, 2013 in Reports & Whitepapers

The United States has an enormous amount of untapped potential for collecting biogas from organic waste streams to produce useful forms of energy. Most of the U.S. biogas development in the last 20 years has used dairy manure as a feedstock source. Development has also occurred at wastewater treatment facilities or food processing facilities with a wastewater stream.
A livestock sector that has not received much attention for anaerobic digestion implementation opportunities is swine. According to a Market Opportunities report from US EPA AgStar there are 5,596 swine farms nationwide that are candidates for AD. Currently, there are 26 operational systems in the U.S. Given the gulf between potential and operational; we could be doing much better.
This whitepaper summarizes research findings assessing the barriers and opportunities for implementing anaerobic digestion projects using swine manure as a feedstock.

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North Dakota Oil Boom: Key Challenges Facing the State

November 16, 2012 in Carbon Management Author: Brad Crabtree
This week I traveled to Houston Texas to take part in the 2012 Transatlantic Science Week – Energy Technology Workshop. I gave a presentation titled – Technical and Social Challenges when North Dakota becomes the second largest oil producing state in the USA. The Great Plains Institute is working to help build continued collaboration between the energy-rich Norway and North Dakota.

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NEORI Analysis & Methodology

October 27, 2012 in Carbon Management

The Center for Climate and Energy Solutions (C2ES) and the Great Plains Institute (GPI) conducted an analysis, with extensive input from the participants of National Enhanced Oil Recovery Initiative (NEORI), to inform NEORI’s recommendations for a federal production tax credit to support enhanced oil recovery with carbon dioxide (CO2-EOR). In particular, C2ES and GPI explored the implications of the recommendations for CO2supply, oil production and federal revenue. This document describes the research, assumptions, and methodology used in the analysis. NEORI’s recommendations report, Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity, can be found at: http://gpisd.net/NEORI-Report-2012.

C2ES and GPI compared the likely cost of a federal tax credit for greater CO2 capture and supply with the federal revenues expected from applying existing tax rates to the resulting incremental oil production. C2ES and GPI quantified two key relationships for CO2-EOR develop­ment and a related tax credit program:

1) Cost gap – the difference between CO2 suppliers’ cost to capture and transport CO2 and EOR operators’ willingness to pay for CO2. The goal of the tax credit is to bridge the cost gap. Thus, the cost gap determines the expected level of the tax credit in a proposed competitive-bidding process.

2) Revenue neutrality/revenue-positive outcome the federal government will bear the cost of a CO2-EOR tax credit program, yet it will enjoy increased revenues from the expansion of CO2-EOR oil production when existing tax rates are applied to the additional production. C2ES and GPI analyzed when the net present value of expected revenues would equal or exceed the net present value of program costs.

Figure 1: Illustration of the Cost Gap and Revenue Neutral/Revenue Positive Outcome of Federal Production Tax Credit Program

*The “cost gap” is the difference between the cost to capture and transport COand what EOR operators are willing to pay for CO2

**Net present value is the sum of annual tax revenue minus annual production tax credit costs for each year of the production tax credit program, discounted for each year

C2ES and GPI calculated the tax credit required to bridge the cost gap, and the cost and revenue implica­tions. C2ES and GPI developed input assumptions based on real-world physical and market conditions after consulting with NEORI participants and other industry experts and reviewing available literature. C2ES and GPI developed a core scenario based on “best guess” inputs and conducted several sensitivity analyses of key inputs. C2ES and GPI demonstrated that a program can be designed that will become “revenue positive” (defined as when the federal revenues from ad­ditional new oil production exceed the cost of a carbon capture tax credit program after applying a discount rate to both costs and revenues) within ten years after tax credits are awarded. Sensitivity analysis reveals that the program remains revenue positive using a realistic range of likely assumptions.

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Senators come together to achieve a win for energy security, the environment, and the economy

October 10, 2012 in Carbon Management Author: Brad Crabtree
Capitol GraphicIn the midst of the election season, with partisan politics in full force, a group of Senators came together to introduce legislation that aims to achieve a win for energy security, the environment and the economy in the U.S. In September, Senators Kent Conrad (D-ND), Mike Enzi (R-WY), and Jay Rockefeller (D-WV) introduced bi-partisan legislation that supports expansion of carbon dioxide enhanced oil recovery (CO2-EOR).

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Press Release: The Great Plains Institute commends Conrad-Enzi-Rockefeller bill

September 20, 2012 in Carbon Management, News & Press

Press Release GraphicThe Great Plains Institute commends Conrad-Enzi-Rockefeller bill to increase American oil production and reduce carbon emissions MINNEAPOLIS, MN – Today, Sens. Kent Conrad (D-ND), Mike Enzi (R-WY), and Jay Rockefeller (D-WV) introduced a bipartisan bill to advance the use of carbon dioxide (CO2) for enhanced oil recovery (EOR), an important opportunity to strengthen our national security by reducing dependence on imported oil through increased American oil production; create new jobs and increase investment across the country; and reduce CO2 emissions from a range of industrial sources—all at the same time.

The Great Plains Institute applauds Senators Conrad, Enzi and Rockefeller for introducing legislation that improves the existing Section 45Q Tax Credit for Carbon Dioxide Sequestration in order to secure private sector investment in critical, near-term projects to capture CO2 from power plants and industrial sources for use in EOR projects that increase oil production and reduce emissions through geologic carbon storage.

The bill reflects recommendations from the National Enhanced Oil Recovery Initiative (NEORI), which brings together a broad coalition of leaders from industry, labor, state government, and environmental groups. NEORI is convened by the Great Plains Institute and the Center for Climate and Energy Solutions (C2ES).

Midwestern Ethanol Innovation: Maximizing Process Efficiency and Carbon Reduction

May 20, 2012 in Reports & Whitepapers, Transportation & Fuels

An extension of our work with the MGA Advanced Transportation Fuels Advisory Group, this new white paper provides an overview of opportunities for improving efficiency and environmental performance at corn ethanol plants. Starting with a description of the ethanol production process, we then provide a menu of practices and technologies that can be implemented to reduce energy use, costs and greenhouse gas emissions. We also provide examples of plants that are currently using these practices. While progress on ethanol  innovation is being made, there remains a large opportunity for broader adoption of these strategies.

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CO2-EOR Potential in the MGA Region

February 26, 2012 in Reports & Whitepapers

This report was developed pursuant to recommendations of the Midwestern Governors Association’s (MGA) CCS Task Force and in advancement of Governor Pat Quinn’s 2011 MGA Chair’s Agenda. The report was developed in collaboration with the Great Plains Institute and with the generous feedback of MGA stakeholders and other experts in the Midwest.

 

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