Quick quiz: What do Texas and Michigan have in common?
Answer: Not all that much, but after each state pre-identified the best zones for renewables and planned transmission there, wind power boomed for their utilities and produced big savings for their ratepayers.
Michigan’s 2008 Act 295 established a 10% renewables by 2015 mandate and authorized the Michigan Public Service Commission (PSC) to create the Wind Energy Resource Zone Board. The Board’s 2009 final report identified four high-potential wind energy regions. The best was the state’s Thumb region in the eastern Lower Peninsula, with between 2,367 MW and 4,236 MW of capacity.
“It was exactly the way planning should be done and very similar to the Texas Competitive Renewable Energy Zones (CREZ),” said ITC Transmission VP of Planning Tom Vitez. ITC was designated to design transmission to bring the Thumb region's wind to market.
Before the policy kicked off the planning process, Vitez said, wind and transmission developers were at an impasse.
“The wind resource in Michigan’s Thumb region was the state’s richest, but wind developers wouldn’t build there without transmission to deliver it to population centers," he said, "and transmission developers wouldn’t build there without something to deliver.”
In partnership with the Michigan PSC, Vitez said, ITC designed a system “not for the next developer who comes knocking on the door but for the next ten developers who come knocking on the door.”
Even before ITC completed the $510 million, 140 mile, double circuit 345 kilovolt, 5,000 MW capacity Thumb Loop line, developers came running.
As a result, DTE Energy, the state’s dominant electricity provider, had the tenth highest total of new wind capacity (186.8 MW) of any U.S. utility in 2014, owned the seventh highest installed wind capacity (400 MW) among U.S. electric utilities, and had the eighth highest installed capacity (863 MW) among U.S. investor-owned utilities. Six of its nine wind projects are in the Thumb region.
Partly because of that development, the MidContinent Independent System Operator (MISO), of which the Thumb Loop is part, met 25% of its load with wind in 2012 and set a record 11,835 MW peak moment output in January 2014.
The Thumb Loop: A multi-value project
The Thumb Loop was named one of MISO’s 17 Multi-Value Projects (MVPs), making it possible for the cost of construction to be shared by ratepayers throughout the system operator’s footprint.
“A recent assessment of MVPs found that an investment of $12 per year per average customer produces a $33 per year benefit per customer,” said MISO Spokesperson Andy Schonert.
To qualify as one of the MVPs, designated in 2011 and now working through the transmission planning process, Schonert said, a line would also have to offer increased reliability by decreasing system congestion and line losses and it would have to advance policy goals like state renewables mandates.
The Thumb Loop, one of only three of the MVPs so far completed, has played an important role in Michigan reaching Act 295’s 10% renewables mandate.
“The line has approximately 1,000 MW of wind interconnected and 120 MW under construction,” Vitez said. With a further 1,300 MW in the MISO planning queue, it is also helping prepare the ground for the proposed 20% renewables by 2022 mandate now before Michigan’s legislature.
“There is plenty of room on the Thumb Loop to add more wind, depending on whatever renewables mandate comes out of the legislative process,” Vitez said.
Building the Thumb Loop
Construction was done in stages. The region’s sensitive areas were identified in the siting process. As a result, ITC planners were able to plan a route that avoided obstacles. The line did, however, require four new substations, Vitez said.
The completed line runs from the Bauer substation in the southwest, where it interconnects with existing 345 kV lines, to existing transmission at the Rapson substation in the tip. It then turns south to the Banner substation, where there is an existing power plant, and terminates at the Fitz substation in the southeast of the Thumb.
The challenges in siting came because the line transits private property, Vitez said. After a public process, the PSC granted ITC a Certificate of Public Necessity and Convenience (CPCN), which allowed the builders to exercise the power of eminent domain.
“We work hard with property owners to get voluntary easements and generally we are able to do that,” Vitez said. “Eminent domain is a backstop.”
If every way of obtaining an easement was exhausted and negotiations with the landowner broke down, ITC exercised its right of eminent domain “only as a last resort,” Spokesperson Robert Doetsch added.
Integration of higher levels of wind has not caused further system difficulty or necessitated further operator expense in the context of the region’s 20,000 MW load, Vitez said.
Thanks to new wind technology, particularly taller towers and longer blades, wind speeds as low as 8 miles per hour can economically generate utility-scale quantities of electricity, opening previously untenable sites to development, the American Wind Energy Association (AWEA) recently reported.
The new technology is also allowing wind developers to get capacity factors exceeding 50% at sites previously considered to have only modest potential.
“The Great Lakes region is an early beneficiary,” AWEA Deputy Director Emily Williams recently said. “In states like Michigan, we’re absolutely seeing a wind rush.”
With the Obama administration about to finalize a new set of policies likely to require the shuttering of fossil fuel capacity in favor of emissions-free generation, ITC transmission planners have been thinking about the future implications of this new wind potential.
“We have been looking at what transmission might make sense in the long run to support the EPA Clean Power Plan and what will make for the overall most cost-efficient system,” Vitez said. “The planning and development of the Thumb Loop can be a model for other states, in place of the band-aid fixes we too often see.”