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CEIC-08-05

"Optimizing Transmission from Distant Wind Farms"
Sompop Pattanariyankool and Lester B. Lave

Abstract:
Northeastern United States whose capacity factors are 29-34%, we calculated the optimal size of the transmission line connecting the wind farms to distant customers. For a distance of 500 miles, the optimal transmission capacity is about 86 %; for a 1,000 mile separation, the optimal transmission capacity is 75 %. Building a line at full capacity would increase transmission cost almost 15 % while transmitting only about 4% more electricity to the customer.
For a Western wind farm with a capacity factor of 50%, the optimal transmission line would have 89 % of the capacity of the wind farm at 500 miles and 85 % at 1,000 miles.
When two wind farms use the same central transmission line, the optimal transmission capacity varies with the correlation between the outputs of the two wind farms. For a correlation of -1,0, the optimal capacity is 1.00, while for a correlation of 1.0, the optimal capacity is slightly more than 75%. The correlation between the outputs of wind farms depends, among other factors, on the distance between wind farms. We estimate that relationship and use it to optimize the location of a second wind farm. The cost of the transmission line between the two farms largely offsets the benefit of a lower output correlation, since the profit maximizing distance between the two wind farms has little effect on the cost of delivered electricity. Somewhat surprisingly, adding a second wind farm does little to lower the transmission cost of delivering power to the customer. The cost saving from bundling 2 wind farms largely depend on the distance between the wind farms.
Finally, we model a system where the owner is penalized $200/MWh whenever delivered output falls below 400 MW. In this case, the penalty means that the second wind farm increases profit and should be located further from the first to maximize profit. Bundling wind farms with low correlation can smooth output distribution and increase reliability of the delivered output. However, the developer needs to trade off between the increase in transmission cost and reliability of the delivered output.
The cost of delivered electricity varies little whether there is one or two wind farms on the transmission line. Using current estimates of the cost of a wind turbine and the cost of a transmission line, we estimate that the cost of delivered power from a wind farm with about 33% capacity that is locate 1,000 miles from the customer will be about $150/MWh with almost 2/3 of the cost due to transmission. This cost does not include measures to solve the moment to moment variability of wind turbine output or the intermittency of output. If the latter cost were imposed for power output less than 40% of wind farm capacity, profit of the wind farm decreases significantly especially for the pair of wind farms with high output correlation.

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