Step 4: Transmission Options Development

Delivery of the electricity generated in the candidate zones to load requires upgrades and/or extension of the existing transmission system. After selecting the candidate zones, the analysis focuses on developing a set of transmission enhancement options to cost-efficiently connect candidate zones to load and yield the most benefits. A set of feasible options allows the TAC and Transmission WG to select the most attractive option based on pre-set criteria.

Produce transmission enhancement options

Knowing the location and target installed RE capacity of candidate zones enables the Transmission WG and system operator to formulate transmission expansion options for a REZ transmission optimization study. There are often a large number of potentially feasible approaches to connecting candidate zones to load. To reduce this complexity, the transmission optimization study includes a reasonable set of transmission development options (e.g., three to five options) that cover the diverse range of feasible solutions, including the addition of new lines and other transmission improvements such as equipment upgrades, new substations, or transformers.

Each option includes a list of specific transmission upgrades, transfer capability, and associated costs. Some of the options developed might not contain the entire set of candidate zones. Additionally, the voltage level of new transmission and other upgrades may differ due to alternate assumptions about the carrying capacity needed to bring new renewable energy to the rest of the grid. The table below depicts example REZ transmission optimization study options and corresponding additional zone and total transfer capacities from the Texas CREZ process. This total transfer capability also includes existing wind capacity in the state. This table shows the potential diversity of the considered options. For example, Option 4 does not connect Zone 4 and as a result does not have transfer capability (MW) from this zone. Also, the CREZ transfer capability of each of the options differs and the transmission levels range from 5,150 MW to 17,956 MW for Options 1 and 3, respectively.

 Table. Transmission system transfer capabilities in various CREZ transmission optimization study options (ERCOT 2008)

Perform transmission planning studies

The Transmission WG performs three types of transmission planning studies for each of the options in an iterative fashion: steady-state analysis, dynamic stability analysis, and production cost analysis. The steady-state and dynamic stability analyses help the Transmission WG understand the reliability limitations and needs of the transmission network. Production cost analysis helps the Transmission WG understand the performance of the transmission network and expansion options. Outcomes include transmission system limitations, potential transmission improvements, total production costs over a test year, projected constraints, congestion costs, and local marginal cost of electricity. The Transmission WG can use the production cost analysis to determine the costs and benefits of each set of transmission system improvements for a given option.

It is not typically economically efficient to build the transmission network such that there is no curtailment of renewable resources because of transmission reliability constraints. For example, in the Texas CREZ process, an assumed system-wide wind generation curtailment of approximately 2% of annual energy potential was economically efficient (ERCOT 2008).

The Texas CREZ Approach to Producing Transmission Enhancement Options

Because there are many feasible approaches to connecting candidate zones to load, the Texas CREZ initiative reduced this complexity by studying a set of diverse transmission enhancement options that covered the range of feasible solutions.

In the Texas CREZ the Public Utility Commission of Texas (PUCT) bundled a set of selected candidate zones into a reasonable number of scenarios (for example, three to five). These scenarios represented different levels of transfer capability for the transmission system based on the assumed installed capacity (MW) in each zone as well as the number of zones included. The PUCT asked the Electric Reliability Council of Texas (ERCOT) to develop transmission enhancement options to connect candidate zones to load and conduct a transmission optimization study to identify attractive, feasible options for each of these scenarios.

ERCOT then explored a diverse range of options for connecting candidate zones to load under each of the scenarios shared by the PUCT. These options included lower-voltage 345 kV networks, higher-voltage 765 kV networks, high-voltage direct-current (HVDC) lines, hub-and-spoke circuits, and loop circuits around zones. Each option consisted of a list of specific transmission upgrades, transfer capability, and associated costs. An analysis of these transmission enhancement options and hybrid options—including the addition of new lines and other transmission.

Detailed studies of the final, preferred transmission enhancement option under each scenario were then possible. The studies conducted included steady-state analyses, dynamic stability analyses, production cost analyses, and a cost-benefit analysis (ERCOT 2008).

Conduct a cost-benefit analysis

Cost-benefit analyses allow for comparison of the production cost savings to the cost of new transmission. The Transmission WG and system operator analyze a sufficient number (e.g., three to five) of transmission options to understand the costs and benefits of each option. A cost-benefit analysis of the transmission enhancement options may include additional factors such as reliability benefits, legislative intent (i.e., the legal intent to develop clean energy), environmental benefits, future expansion capability, and other factors (e.g., social criteria). The TAC and the system operator can recommend the inputs used for the cost-benefit analysis as well as the individual criteria employed to evaluate the options.

At any point, the Transmission WG and regulatory authority may choose to drop a candidate zone with less commercial interest if the cost-benefit analysis suggests resources are better spent connecting other zones. The commercial interest shown by developers in step 3 can be quantified and included with factors from the cost-benefit analysis to rank the REZs.