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One new transmission line under construction will carry renewable power as far as Las Vegas

Having good wind resources is only part of what’s needed for a thriving wind industry. Another essential component is transmission: wind farms just aren’t useful if there’s no way to get the power from the farm into the city. One state grappling with this issue is Montana, which has abundant wind resources but has struggled to build enough power lines to put them to use. That’s not to say that Montana doesn’t have a strong desire to embrace renewable energy (it does), but first the state must confront several daunting challenges when trying to complete new transmission projects. For starters, there’s a need to limit the extent to which power lines pass through protected forests and national parks; second, many landowners are hesitant to have lines built on their property when the majority of the power won’t even be used in their state; third, Montana is huge, so transmission projects are lengthy and thus expensive.

Despite this, the Energy Promotion and Development Division (EPDD) of the Montana Department of Commerce recently provided updates on six transmission projects currently under construction in the state. They include lines connecting wind farms in geographically remote areas of the state, and will also link Montana’s renewable energy sources to electricity markets as far away as Las Vegas. When built, the lines will add 12,000 megawatts (MW) of electrical capacity to the grid, nearly all of which will be used for clean energy projects. And in Montana, “clean energy” usually means wind. It has the fifth greatest wind potential of any state and about 50 wind projects in varying stages of planning and permitting. The Montana Department of Commerce says that it would like to achieve 10,000 megawatts (MW) of wind capacity in the near future, up from the 386 MW that are currently installed, in order to help meet the US Department of Energy’s goal of producing 20% of our energy from wind by 2030.

One interesting aspect of Montana’s recent push to boost its grid is an effort by the Western Governors’ Association (chaired by Montana Governor Brian Schweitzer) to fast-track the difficult and time-consuming permitting process for building new transmission. According to Schweitzer, that effort comes out of a desire to get renewable power on the grid, and do it quickly. He’s quoted by one source as saying, “You can’t develop alternative energy sources until you get transmission. You can’t put electricity in a bottle and send it down the river.” The permitting process for building transmission is typically much longer and more difficult than the permitting process for building wind farms. According to the Department of Energy’s National Transmission Grid Study, major transmission projects often experience up to 10 years or more of delays before they can be built. As a result, there are hundreds of wind projects around the country, waiting on new transmission lines to proceed. This fact makes any effort to streamline the transmission process highly commendable.

The US transmission grid, which our own Department of Energy finds to be antiquated, will need significant additions and improvements over the next decade to accommodate renewable energy and improve reliability. Luckily, Montana is one state helping lead the way to solve this nationwide problem.

Much to our excitement, wind energy continues to grow as a way of meeting U.S. demand for electricity, now accounting for about 40% of the new yearly additions to the country’s electrical capacity. However, as the industry continues to grow, one of the challenges it continually faces is transmitting electricity from rural wind farms to the urban areas that need it.  To put this issue into perspective, the US transmission system is like a highway system with many local roads but few interstates; a fine system on a local level but not as good over long distances. To overcome this barrier, the federal government and the American Wind Energy Association are advocating for the creation of an intrastate electrical superhighway that would connect the country with a spider web of high-voltage transmission lines. The only question is deciding who pays for it — an especially tricky question since long-distance power lines would benefit many people over a large geographic area. The oil- and coal-based power plants that have the lions’ share of US energy production don’t have this problem: luckily for them, they can be built near cities, limiting the need for long-distance transmission.

Luckily, solutions have begun to arrive from the grassroots level. A recent breakthrough was made by the Southwest Power Pool (SPP), a regional association of power companies which helps manage the transmission grid in the American Southwest. Several weeks ago, the Federal Energy Regulatory Commission (FERC) approved their new cost allocation plan which creates a “highway/byway” system of paying for transmission. Basically, the cost to build power lines that carry large amounts of power (300+kV) are distributed among many utilities in the region because the lines will serve wide areas. Smaller transmission lines (less than 100kV) are paid for entirely by local utilities since they are intended mostly for local use. For lines of intermediate size (100-300kV), local utilities pay much of the cost but other utilities around the region chip in too. FERC’s acceptance of this plan clears the way for SPP and other utilities to start building longer transmission lines, especially in the wind-rich Heartland, which is SPP’s primary area of service.

This newly approved highway/byway system will allow transmission lines to be built between Wichita, KS, Spearhead, KS, and Hitchland, TX. Once completed, these lines will span much of southern Kansas and the Oklahoma Panhandle, one of the most wind-abundant regions in the country. The construction of these power lines will likely be a huge boost to area wind projects whose electricity will now become accessible to new population centers.

New interstate transmission lines on a national scale would help consumers save billions of dollars. For instance, according to one study done by the Electric Reliability Council of Texas (ERCOT), a $4.9 billion dollar investment in new transmission would pay for itself in less than three years and save ratepayers about $1.7 billion per year for each year after that. Not bad. Further investment in transmission would also act as a huge incentive for the wind industry to expand into more wind-rich locations, bringing all the benefits of new jobs, local income, reduced emissions, and fewer “natural” catastrophes (ie, oil spills) with it.

Federal efforts to plan new interstate transmission lines have been repeatedly thwarted in the past by one question: who pays for the updates? SPP’s cost allocation plan could be the revelation that finally marks the genesis of a nation-wide interstate transmission overhaul. What we need now is for more regional transmission operators to adopt “highway/byway” plans similar to SPP’s. The adoption of such policies would be a good first step toward a much-needed update to our national grid.

We’ve got a couple exciting bits of news for you today about offshore wind power.

First up: the nation’s first offshore wind farm is slowly moving closer to reality. Cape Wind, a proposed 400+ MW wind farm off the coast of the Nantucket Sound, has entered into power purchase talks with National Grid, a major utility in New England. This is an important step for the troubled project and signals that progress is being made, however slowly.

The project is hoping to qualify for the Depart of Energy cash grants offered in President Obama’s stimulus bill. In order to receive the grant—equal to 30% of a project’s costs—the wind farm will need to begin operating in 2012. Ian Bowles, Massachusetts’ energy and environment secretary, describes Cape Wind as “the only offshore wind project that has any possibility of being built in President Obama’s first term.”

Switching focus to a different part of the world where offshore wind is more than just a vision of the future, nine European nations have banded together to create a “supergrid” in the North Sea to aid transmission from offshore wind farms and supply electricity to the mainland. According to the European Wind Energy Association, 100 GW (yes, gigawatts) of offshore wind in the North Sea are in the planning stages. That would be enough electricity to power roughly 10% of the entire European Union.

The agreement to build the supergrid took place at the Copenhagen climate summit yesterday in Denmark. Coincidentally, Denmark already gets 4.5% of its electricity from offshore wind farms. The Danes know how to get it done.

With wind, solar, and geothermal projects popping up with increasing frequency in the U.S., a recurring theme of obstruction is materializing. When it comes to development obstacles, all forms of renewable energy have one thing in common: a lack of transmission.

Inside Renewable Energy’s weekly podcast recently covered the issue that has been inhibiting renewable energy growth ever since its inception. Erik Swenson, a partner with the international law firm Fullbright and Jaworski dealing with energy and climate issues, provides commentary on the topic. Swenson describes the transmission problem as one of “federalism.” He believes that the government is good at seeing the big picture, “macro” necessity of creating a so-called green power super highway but fails to understand the smaller, “micro” complexities that must be overcome to accomplish the task. He cites the stimulus bill as a misfire for transmission projects:

“ARRA legislation is focused on shovel ready projects but it takes 7 to 10 years, roughly, to site a new transmission line. So, if you can’t start construction on your new transmission line within about the next year and complete it within about the 2016 timeframe then the money is not available to you… so it’s just not going to solve the problem of how to connect new geothermal, new solar, new offshore wave energy projects to the grid.”

The podcast, which also covers other renewable energy topics, can be heard in its entirety here.

Transmission has been a popular focus for the National Wind blog these days (see here and here) but it is an issue that encompasses more than just wind energy. We’re still hoping that Congress will recognize that and figure out how to handle the “micro” complexities in time to make a difference with the new energy bill.

The American Recovery and Reinvestment Act (ARRA), unofficially known as the stimulus bill, includes plans for upgrading our current electrical system with “Smart Grid technologies” in order to deliver electricity to consumers in a real time market The ARRA appropriates $4.5 billion to modernize our current grid in order to save energy, reduce costs, and also increase accuracy.

Our current system is continually struggling to keep up with increasing energy demands and increasing supply from renewable energy sources such as wind energy. Test projects have shown that utilizing Smart Grid technologies that incorporate well-functioning hour-ahead and day-ahead markets can make use of variable energy resources such as wind power efficiently and reliably. Additionally, some Smart Grid technologies will help store the energy harnessed from wind power and dispatch it on demand.

Investment in America’s transmission and distribution system has lagged over the last 30 years, which has severely limited the grid’s efficiency and reliability. The U.S has only built 668 miles of interstate transmission since 2000 and it is quickly falling behind the needs of the nation. Additionally, if the grid increased its efficiency by 5%, the energy savings would be equivalent to eliminating fuel and greenhouse gas emissions caused by 53 million cars. The Smart Grid looks to improve upon our system in terms of efficiency, affordability, and reliability.

The Department of Energy (DOE) has outlined five characteristics that will drive the Smart Grid:

  • Integrated communications with real-time information and control, essentially allowing the grid to ‘talk’ and ‘listen’
  • Sensing and measurement technologies that will support faster and more accurate responses
  • Advanced components that will implement findings regarding superconductivity, storage, and power electronics
  • Advanced control methods for quickly diagnosing and solving any event
  • Improved interfaces and decision support to increase human decision-making

Smart Grid technologies will provide an instantaneous monitoring system that will help us to foresee and control future electricity needs. This will ultimately reduce the cost of meeting peak energy demand, which has been exceeding transmission growth by almost 25% each year.

Smart Grid technologies will help transform our current producer-controlled network to one that is driven more by consumers and their needs. By allowing consumers to participate through new technologies, the grid will be able to maintain a higher sense of reliability. This transformation will change the business model and relationships affecting all utilities, regulators, and consumers of electric power.

Complete implementation of the Smart Grid will evolve over time. However, numerous constructive steps are already being taken today to realize this goal. Smart Grid efforts are on track in many states and utilities that are thinking for the future.

Jon Wellinghoff, the chairman of the Federal Energy Regulatory Commission (FERC), made a bold statement on Earth Day, April 22, 2009, at the US Energy Association Forum. When questioned about new coal and nuclear generation, Wellinghoff responded, “we may not need any, ever.”

In making his assertion Chairman Wellinghoff argued that due to technological advancements in renewable and transmission, renewable energy is becoming increasingly cost-effective and progressively more competitive with conventional forms of energy. For instance, solar energy is now able to be stored for up to 15 hours, and regulatory commissions are allowing increasingly larger quantities of wind energy onto the grid. Given the current trends and assuming the implementation of a smart grid system, Wellinghoff said “ultimately wind’s going to be the cheapest thing to do,” so you’ll look to wind first to meet energy demand.

With a smart grid capable of shaping energy supply to meet demand (and vice versa), Wellinghoff said, the concept of baseload power will become an anachronism. “People talk about, ‘Oh, we need baseload.’ It’s like people saying we need more computing power, we need mainframes. We don’t need mainframes, we have distributed computing.”

Wellinghoff cited what many others have duly noted: there is enormous potential for wind development in the Midwest, but it can only be fully realized if we implement wind friendly policies and keep wind in mind when rebuilding our nation’s infrastructure.

It is certainly a boon to the wind industry for the chair of the Federal Energy Regulatory Commission to make such assertive statements, as the commission regulates the interstate transmission of electricity. Chairman Wellinghoff has an impressive track record behind him; he is an energy law specialist with more than 30 years of experience in the field and was the force behind Nevada’s Renewable Energy Standard, which was one of only two states to receive an “A” by the Union of Concerned Scientists for its design. His statements on the future of wind energy demonstrate the forward-thinking needed to stimulate growth and we are excited to see his vision become reality.

On Thursday April 16th, the Minnesota Public Utilities Commission (MPUC) issued a Certificate of Need for the CapX 2020 project. The Certificate of Need grants approval for the erection of three 345 kV transmission lines that will traverse the state of Minnesota. However, the approval states that only the Brookings, SD, to Hampton, MN, line may be designated to carry wind energy.

While CapX 2020 advocates are excited that the PUC’s decision will help increase the reliability of the nation’s power grid and help reduce carbon emissions through increased efficiency in the lines, many wish more would have come out of the decision. Wind advocates would like to see more of the lines carry wind energy, since Minnesota needs to more than triple its installed wind energy capacity in order to achieve Minnesota’s Renewable Energy Standard (RES). The law requires that 25% of retail electricity sold in the state come from renewable sources by 2025. To adhere to this mandate, new high-voltage transmission must be constructed to carry renewable energy across the state to load centers. Furthermore, utilities would like greater flexibility in determining which lines could be used for wind energy. Beth Soholt, the Executive Director of Wind on the Wires, probably describes the common feeling by CapX 2020 advocates best when she says, “we certainly wanted more… but we think this is a balanced decision.”

On the flip side, those who opposed the project from its impetus are disappointed that the project has come this far and advocate for investment in smart grid and localized generation technologies instead.

One thing seems clear, as with any decision – it is hard to satisfy everyone, particularly when a project has as many intricacies as the CapX 2020 project. However, as we look to improve the transmission issues associated with increasing our country’s installed wind capacity, it is clear that relying on a single solution is not the answer. Our nation needs both smart grid technologies and localized generation combined with an updated electrical infrastructure to efficiently carry large amounts of clean, carbon free energy to where it is needed.

The Federal Energy Regulatory Commission (FERC) has taken a significant, positive stand in support of renewable energy. On April 13th, 2009, the FERC agreed to give Green Power Express LP, a limited partnership created by ITC Holdings Corporation, federal rate incentives to build 3,000 miles of high voltage power lines. These federal rate incentives will provide favorable financial benefits to investors and will help make the development of the Green Power Express project economically viable. Project expenses incurred can be recovered through an incentive return on common equity of 12.38 percent. 100 percent of the construction will be included in the rate base which incorporates a 60 percent equity and a 40 percent debt structure until the project is placed into service. ITC will work with the Midwest Independent Transmission System Operator (MISO) Inc. along with state and federal governments to develop the project. These 3,000 miles of high voltage power lines will help distribute 12,000 MW of clean renewable wind energy from wind rich areas in the Midwest to metropolitan areas across the country.

The ten to twelve billion dollar Green Power Express project is part of a greater plan envisioned by the Department of Energy and the American Wind Energy Association that strives to have 20% of the nation’s energy come from wind by the year 2030. As current electrical infrastructure cannot adequately support large quantities of wind energy, improvements like the Green Power Express Project will put America in the direction of reaching this bold goal.

Wind energy in the Midwest is one step closer towards developing the necessary infrastructure changes that will support greater wind energy on the power grid! From June 2008 until January 2009, Administrative Judge Beverly Jones Heydinger held hearings to gather public comments on the need for three of the proposed CapX 2020 transmission line projects. After reviewing the numerous public comments that have been submitted both in written form and throughout various hearings, on Febuary 27th, 2009, Judge Heydinger submitted a report to the Minnesota Public Utilities Commission. The report demonstrated the need for the three proposed 345 kV projects and recommended their approval. If approved, 630 miles of 345 kV power lines will be constructed, connecting Minnesota, Wisconsin, North Dakota, and South Dakota. The three transmission line projects are

· the Hampton-Rochester -La Crosse, Wisconsin project,
· the Brookings County, South Dakota-Hampton project,
· and the Fargo-St. Cloud-Monticello, Minnesota project.

If developed, these transmission lines will allow larger quantities of wind energy to be delivered from production areas to load centers.

More construction of high voltage transmission infrastructure will encourage further wind energy development in these Midwestern states due to increased grid capacity. In addition, these new lines would minimize electricity loss of wind energy during transfer, making it easier for wind to compete with conventional fuel sources.

However, there is still one more hurdle to overcome.

In making her recommendation, Judge Heydinger noted that the CapX 2020 transmission lines did not have to necessarily allocate room for renewable energy.

Though the ruling did not come down on the side of the wind industry in its omission of a renewable energy mandate for the CapX2020 lines, the existing Renewable Energy Standards in Minnesota will help get renewables onto the grid. Minnesota’s Renewable Energy Standard now requires utilities to provide 25% of their electricity from renewable energy sources by 2025. Furthermore, Minnesota’s largest utility, Xcel’s energy, is required to supply the population with 30% renewable energy by 2020. Without new high voltage transmission lines, it would be exceedingly difficult to transfer the required amount of renewable energy needed to meet these standards.

In the next few months, the Minnesota Public Utilities Commission will hold several public hearings and will decide whether there is a need for the high voltage transfer lines. If they determine there is a need, the CapX2020 projects will have to undergo a lengthy development process that includes applying for route permits and conducting environmental impact statements before the transmission lines can be built.

The U.S. Department of Energy has proposed an ambitious plan to increase wind energy’s contribution to the U.S. electricity supply. The goal is for wind energy to provide 20% of U.S. electricity needs by 2030. The U.S. Department of Energy has identified transmission limitations as the greatest obstacle to realizing this goal. 300,000 MW of wind energy are needed to meet this goal, which would require the installation of nearly 12,000 miles of high voltage, 765 kV transmission lines. Although several transmission line initiatives exist, few have plans to install transmission lines at this high capacity level. However, one transmission provider, ITC Holdings Corporation, has responded by developing a plan for a network of transmission lines referred to as the “Green Power Express”. The Green Power Express will include up to 3,000 miles of high-voltage, 765 kV transmission lines that will efficiently carry up to 12,000 MW of renewable energy.

To promote additional renewable energy, the transmission grid must be built to link areas with vast wind energy potential to areas that have high demand for electric power. New power lines that would carry electricity from remote to populated areas have been termed “green power superhighways”. The Green Power Express will facilitate the movement of power through these green power superhighways from wind-abundant areas in the Dakotas, Minnesota, and Iowa to Midwest load centers such as Chicago, southeastern Wisconsin, Minneapolis, and other states that demand clean, renewable energy.

Our current system has introduced several obstacles that have previously limited the creation of new transmission. Policy obstacles severely impede the construction of green power superhighways. For example, regulators in a single state can reject an entire multi-state transmission network simply be not granting the necessary permits. Generally this would occur if the state felt that they wouldn’t receive an adequate share of the project’s benefits.

Many private companies also feel that they won’t receive benefits from investing in transmission infrastructure. Few private firms have stepped forward to invest in transmission in the first place because the existing regulatory structure gives companies little or no economic incentive.

In order to meet renewable energy goals, major investments and well-developed plans for new transmission are needed. The Green Power Express seeks to create an ideal transmission grid – one which would provide consumers with access to lower-cost electricity where they do not have to rely on a single retailer. Additionally, a new transmission infrastructure would increase competition in the power markets also lowering costs of electricity.

Several reforms in our current transmission infrastructure have been proposed to facilitate this ideal grid. Federal legislation must provide new mission statements, adequate resources, and specific timelines for action. Siting processes must be revamped to allow the Federal Energy Regulatory Commission to act as the lead agency for permitting and coordinating siting approval. Finally, facilities identified as necessary for the development of green power superhighways should be eligible for broad, regional cost allocation.

Though the upfront cost of investing in the transmission infrastructure may seem large and there are many advancements that need to be made, the long-term economic and environmental benefits of these changes will greatly outweigh their initial costs. ITC’s Green Power Express will seek to create one portion of this new, robust transmission grid, helping eliminate the existing constraints associated with our current transmission system.

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