Did you know that wind power is the fastest-growing form of energy in the world, and that the U.S. is the fastest-growing market? Iberdrola Renewables helps lead that growth, as the second-largest wind developer in the country with more than 5,700 megawatts (MW) of wind generation in its fleet. As a result of this growth, reliably integrating renewable power into the nation’s energy grid has become a top priority.
Integration is more challenging in some regions than others due to the differences in how we generate electricity and market structure. In the Pacific Northwest, where renewable energy generation has rapidly increased over the last decade, Iberdrola Renewables has a significant amount of wind power – about 1,300 MW. Energy transmission in the region is managed by the Bonneville Power Administration (BPA), a federal agency that also markets wholesale electrical power from federal hydropower projects located in the Columbia River Basin and other nonfederal power projects in the Northwest. More than 4,500 MW of wind generation – nearly three times Seattle’s average power use – are currently connected to the BPA transmission system. In 2010, the rapidly growing supply of wind began to create issues for BPA’s ability to reliably manage its transmission system.
Overcoming the challenge of an intermittent resource
All power plants, since they can break down suddenly, must be supported by redundant power plants ready to supply electricity at a moment’s notice. As an intermittent resource – since the wind doesn’t blow continuously – wind generation must be supported by reserves to allow for consistency on the grid. BPA must ensure sufficient balancing capability to manage the inevitable difference between the scheduled amount of wind generation and the actual generation that occurs within each hourly period. In the market in the Pacific Northwest, BPA’s only solution was to set aside large amounts of balancing reserves to ensure it had sufficient capability to increase or decrease generation on its system to offset the wind scheduling difference. To cover the costs associated with procurement of this required reserve capacity, rates dramatically increased for wind power producers in the region. 
This situation perpetuated a growing fear about the large concentrations of variable generation on the grid. Could system operators handle it effectively in the long term? Would the region begin experiencing blackouts or higher prices for energy customers because of the additional reserves needed to reliably manage wind variability?
An innovative solution in Self-Supply
The market needed an innovative solution, and Iberdrola Renewables stepped up with a unique idea. What if it leveraged its dispatchable generation assets (power plants that can deliver electricity instantaneously and on-demand), technological sophistication of its National Control Center and top-notch trading, meteorological and origination teams to self-supply its own balancing reserves? The approach could significantly expand cost-effective use of Pacific Northwest wind energy, thereby increasing the environmental benefits of wind energy in the region while reducing the strain on the BPA.
Through a partnership with BPA, Iberdrola Renewables implemented the Customer Supplied Generation Imbalance program, better known as Self-Supply. The pilot initiative enabled Iberdrola Renewables to procure its own balancing resources, freeing up BPA resources and making room for more renewable resources on the electricity grid. It also worked to dramatically change how wind is integrated by using other Northwest generation sources capable of quickly adjusting output to respond to the natural variation in wind output. This unique solution allowed these generators to monetize their intra-hour flexibility – an option previously unavailable in the market in the Pacific Northwest.
Coordinated teams make Self-Supply work
But it takes more than just a unique approach and stakeholder collaboration to make the program a success. Iberdrola Renewables needed to call upon its sophisticated technology and personnel to effectively implement its Self-Supply solution. The success of the Self-Supply program can largely be credited to three teams who efficiently manage the delicate balance on an hourly basis:
- A team of meteorologists who analyze data and look at models, comparing every piece of information and observation point available to give their absolutely best estimate of what the wind portfolio is going to do over the next hour.
- The specialized trading team who works with counterparties to ensure that sufficient incremental capability is lined up for the next hour.
- The National Control Center dispatchers, who act like the engine, making sure that as the wind moves up and down within the hour, the capacity that the traders secured is effectively deployed.
These three teams working in harmony 24/7 are the magic that makes Self-Supply work.
After nearly four years, the Self-Supply program continues to be successful and proves that we can efficiently and effectively integrate variable generation onto the grid. This concept has propelled Iberdrola Renewables into the forefront of balancing sophistication in the region. However, while it is an effective program, the company continues to view Self-Supply as an interim solution in the absence of an organized energy market structure in the west. Iberdrola Renewables supports broader market efforts in pursuit of its mission to lead the transformation to a competitive, clean energy future.
