Despite concentrated effort for more than a decade on transmission planning, available transmission capacity still remains the glass ceiling for wind development in many areas of the country.
For the first time in history, wind energy ranked as the No. 1 source of new U.S. generating capacity in 2012, installing 42% of all new generating capacity in the nation. Total installed wind capacity in the U.S. is now over 60 GW, representing more than 5% of total U.S. installed electric generating capacity. Furthermore, there’s enough wind resource to easily supply at least 20% of the nation’s electricity needs.
Here is the bad news. According to the American Wind Energy Association’s 2012 Annual Report, 136 GW of wind energy was in the queue waiting to connect to the electric grid as of February 2013.
Transmission has not seen a meaningful enough improvement in more than 30 years, and it is not likely that the U.S. will see another comprehensive nationwide build-out of transmission projects like that seen between the 1940s and 1970s.
Without a federal policy to drive a national transmission build-out, states and regional transmission operators will have to work through a dizzying array of barriers all on their own, including state regulations developed for a different set of generating resources than are emerging today, seams issues between regional energy markets, and one of the most thorny issues – cost allocation.
So, what is the state of transmission planning and development across the country to deliver wind, and what remains to be done?
The big picture
A modern, robust, integrated interstate transmission grid is badly needed. The U.S. must strengthen its electrical infrastructure to better withstand extreme weather events. A highly integrated and robust transmission system facilitates competition in wholesale energy markets, which keeps energy prices competitive for consumers, business and industry.
States are successfully meeting renewable portfolio standards (RPS), and the country’s aging coal fleet is slowly being replaced with new resources, such as wind and natural gas. Finally, the upcoming Environmental Protection Agency (EPA) 111(d) regulations will drive investment in new resources, including wind. All of this activity will require a new and better transmission grid.
The EPA is in the beginning stages of drafting new rules that will limit the amount of carbon dioxide that can be emitted from new (111 (b)) and existing (111 (d)) power plants. It is highly likely that as EPA rule 111(d) is implemented, thousands of megawatts of old coal generators will be decommissioned, opening a new market opportunity for the wind industry as the leading carbon-free renewable resource.
Fortunately, progress has been made in a number of areas of the country. Below is a look at some of the major transmission projects and how they are impacting wind generation:
MISO’s MVP lines. Challenges for wind in the Midcontinent Independent System Operator (MISO) region include the need to move wind a long distance to load centers and a large geographic area with many decision-makers, which makes reaching a consensus difficult. MISO took a unique approach to its regional transmission planning by bringing all the states to the table to garner their buy-in for Multi-Value Projects (MVPs) and agree to the broad cost allocation methodology.
On Dec. 8, 2011, MISO approved 17 MVP transmission lines. Among other things, these lines provide important infrastructure for the vast wind resources of the Midwest and are key to unlocking constraints in the region.
MISO studies show the MVP projects will enable 41 million MWh of wind energy per year to meet state renewable energy mandates and goals, and they are in various stages of development. The MVP in-service dates range from 2013-2015 for the Michigan Thumb Loop line, to 2018-2020 for the N. LaCrosse-North Madison line. The Illinois Rivers transmission line (MVP #9, #10, #11 and #17) is progressing. However, in an unprecedented move, the Illinois Commerce Commission (ICC) approved all but a 60-mile segment of the line and six substations. Six parties, including Ameren Transmission Co. of Illinois and MISO, have filed petitions for rehearing.
CapX2020. A consortium of 11 utilities that serve load in Minnesota and the surrounding states banded together to develop new transmission lines.
The CapX2020 projects have been planned as an integrated system to meet a variety of needs, such as improving regional electric reliability, securing community service needs in several growth areas, and increasing access to renewable energy sources. Nearly 800 miles of new transmission lines will be built – an investment of approximately $2.2 billion in new infrastructure.
The Brookings County-Hampton 345 kV project will connect into the central part of the Buffalo Ridge area in southwest Minnesota, and with nine new or expanded substations, it will help bring hundreds of new megawatts of wind energy into the regional grid. Line construction is substantially complete on 50% of the project. That 120-mile portion is scheduled to be energized in spring 2014, and the overall project will be complete by early 2015. The Big Stone South-Brookings County 345 kV project was added in 2012 and will help unlock wind development in eastern South Dakota. The project is in the regulatory phase, with construction expected to start in 2016.
The other CapX2020 projects include Bemidji-Grand Rapids (230 kV), which is now energized; Fargo-St. Cloud/Monticello (345 kV), which has one segment energized and others under construction; and Hampton-Rochester-La Crosse (345 kV), which is under construction. All projects are expected to be complete by late 2015.
CREZ. The Competitive Renewable Energy Zone (CREZ) transmission project began in 2008 and is scheduled to be completed by the end of this month. West Texas boasts some of the best wind resources in the country.
The CREZ lines were designed to move primarily wind energy from West Texas and the Texas Panhandle to the larger load centers of the state, such as Austin, Dallas-Fort Worth and San Antonio. That’s great news for wind developers that are anxious to connect to the 18.5 GW of wind power the lines will be capable of carrying. However, roughly 21 GW of new wind projects in Texas alone will quickly surpass the carrying power of the CREZ lines.
Fortunately, the Electric Reliability Council of Texas is already examining what would be required to increase transmission capacity out of the Panhandle, beyond the 2.5 GW included in the CREZ lines. Thanks to some good planning, many of the CREZ lines were built with the capability to add a second circuit, which will greatly reduce the cost of adding capacity.
MATL. The Montana-Alberta Transmission Line (MATL) is a 230 kV, 310 MW transmission line running from Great Falls, Mont., to Lethbridge, Alberta. Wind energy developer NaturEner owns the rights to 189 MW of capacity online, which it uses to move energy from its Rim Rock Wind Project in wind-rich north central Montana to the organized transmission market in Alberta. The remaining 121 MW is available for firm transmission. Canadian developer Enbridge owns the transmission line, the company’s first. The MATL was energized in September, and it is the only merchant line built successfully in the Northwest. There is the potential to extend the MATL south from Great Falls to the existing 500 kV Bonneville Power Administration transmission line that connects Montana to West Coast markets.
For all of transmission’s benefits, there are just as many challenges. Siting battles, the planning process and the determination of who pays for transmission investments are all well-known challenges facing transmission developers, incumbent utilities and merchant transmission developers. Add to that lower demand for electricity resulting from the economic recession, and the changing landscape on planning inputs such as energy efficiency, demand response and distributed generation, and it becomes clear there is still a lot of work to do.
Although Congress is not likely to address expanding the country’s transmission infrastructure at this time, states and regions continue to make sure the lights stay on, regional energy markets function efficiently and new transmission infrastructure is built.
Given the good wind resource in the Midwest, wind developers are looking to move energy east into the PJM power pool, the Entergy region in MISO or the Southeast. This can be accomplished only by construction of additional transmission capacity, well-functioning market-to-market joint operating agreements, and efforts to ensure that the “rules of the road” accommodate renewable energy resources.
Tackling “seams issues” between markets such as MISO and PJM or MISO and the Southwest Power Pool is critical to the development of wind power. Seams issues include a lack of capacity on the existing transmission lines to move energy from one power pool to another, tariff provisions that are not compatible or need to be updated to allow market participants to do business across the seams, real-time operating concerns, and interregional cost allocation for new transmission lines that benefit several energy markets.
Also, it is time for MISO to identify the next set of MVP transmission lines. Drivers for the next MVP portfolio include coal plant retirements, anticipated RPS increases in several states, utilities’ meeting or exceeding their renewable energy goals and requirements, corporations’ voluntarily purchasing renewable energy (thereby increasing the overall penetration of renewables), cities’ adopting climate action plans, economic development benefits for cities and states, and consumer savings from utilities’ having access to a variety of generating resources. w
Spotlight: New York
States, Regions Playing Leading Role When It Comes To Planning
By Kelley Welf
Despite several issues that have yet to be resolved at the federal level, states and regions are finding common ground in building out new transmission lines to relieve congestion.
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