Washington, Oregon and Idaho are struggling with an oversupply and wastage of wind power. The problem emerged from the utilities’ two opposing mandates: 1) to provide the cheapest possible electricity to rate payers; and 2) to meet state requirements for a percentage of power generated by renewable sources. With this in mind, energy markets experts convened in Vancouver this week to discuss the future of cross border markets for electricity. The International Trade Council of Canada and Clean Energy BC sponsored the morning conference and about 100 people attended.

Eliot Mainzer of the Bonneville Power Administration explained that the mandate for renewable power, known as Renewable Energy Portfolios or REPs, resulted in a six fold increased of wind generation over the last five years to a current capacity of 6,000 megawatts.

The oversupply happens when the wind is blowing, but demand is too low to use it all. Conversely, wind turbines cannot be brought online quickly to meet rapid upsurges in demand. The result is that Northwest wind turbines are turned off at night even when they could be creating power.

If they don’t sell power they lose their tax credits. Natural gas plants are kept spinning at night to ensure adequate power on short notice. The result is a mess of competing obligations that is headed toward litigation.

A price on carbon would solve much of the problem by closing the cost gap between wind and natural gas, allowing utilities to meet both their “cheapest power” mandate and their REP mandate simultaneously. The US Environmental Protection Agency or individual states may provide that, while the Obama administration slumbers.

Meanwhile, another answer being explored is a geographically diverse market with a variety of power sources so that the surplus electricity can go to the areas that need it. The Northwestern states would naturally look to big, thirsty California as a trading partner. California pays a lot for renewable electricity, but California also uses its REP obligation as a jobs programme and so requires generation of most of its renewable power within the state.

That’s where BC comes in as a geographically sensible trading partner, a part of the “Cascadia” bio region. Among the obstacles to be overcome in bringing energy trading to fruition, three stand out: 1) the transmission lines are inadequate; 2) the BC regulations don’t encourage trade; and 3) its not clear what BC stands to gain.

1: NEW TRANSMISSION LINES

The transmission lines between the western provinces and the northwestern states have a nominal path rating that is twice that of most transmission lines, indicating that it is physically twice as difficult to move electricity through them.

New transmissions lines are planned, one between Lethbridge Alberta and Great Falls Montana, and an underground cable between Washington and BC. James Waldo, partner at a Tacoma Washington law firm, advises Sea Breeze Power Corporation on that planned cable, known as the Juan de Fuca Cable Project.

“First, imagine what a system should look like,” he suggested, “then fill it in.” He showed the European plan for a “super grid” that would connect North Africa, Norway and all points in between for the purpose of energy trading. The Juan de Fuca cable would connect the Olympic Peninsula to Vancouver Island creating a Cascadia loop that runs up either side of Puget Sound, up the Olympic Peninsula and underwater to Vancouver Island, across to the BC mainland and back down the I-5 corridor. The permits are in place and it would be physically possible to build in 3 years.

“If there were no border, this would have been done years ago,” Waldo stated. “It makes the entire area more energy resilient.”

2: NEW REGULATIONS