Pulling Together Some Threads on Wind Power and Transmission Costs

The last two posts, one about comments to FERC about transmission policy and the other about PJM’s transmission planning, have both referred to electricity derived from wind turbines.  In this post, I will try to sort out some of the basic issues surrounding existing and new wind power development.  How you look at these issues largely determines where you come down on whether and where new transmission lines are needed.

Over the last twenty years, the US has seen significant installation of land based wind farms.  This development has been the largest single source of new renewable generating capacity in the US.  Land based wind power achieved this ascendency for two reasons: (1) installation of wind turbines on land is less expensive than installing turbines in offshore waters and (2) Sen. Edward Kennedy, former Massachusetts Gov. Mitt Romney and other powerful residents of the south shore of Cape Cod, such as David Koch, fought a ten year campaign against Cape Wind which discouraged any investment in offshore wind power for the last twenty years.  The Obama administration is also doing its part to block Cape Wind, and make sure that US offshore wind power remains a mirage, somewhere off in the future.

However, land based wind power’s cost advantage over offshore wind power is fast disappearing.  In 2009, a Minnesota state report on wind power potential noted that most of the prime locations for wind farms in the US mainland that are near existing transmission lines have been taken.  For that reason, new development of significant land based wind power is suddenly much more expensive because it depends on the construction of a whole lot of new transmission lines.  The trick for the land based Big Wind companies is to push the costs of these new transmission lines off onto electric rate payers.

If the US is going to build large new wind farms, it now makes the most sense to build them off the east and west coasts, as well as in the Great Lakes.  The principal advantage of this development is that the wind resource off the coasts is much more powerful than land based wind, and new transmission lines needed to bring the power to population centers are very short compared with western and Midwestern wind power.  Offshore wind power is still Big Wind, because the scale of offshore wind farms is very large.  But current and future transmission costs for offshore wind power are so much lower, offshore wind development is now approaching the cost of future land based wind, when new transmission costs are included.

The other Big in the renewable equation is Big Solar, primarily in the southwestern US.  Most of that power will go to western cities like Las Vegas and LA and San Francisco, but these large scale solar projects also need new transmission lines to get to population centers.

As I have pointed out numerous times on The Power Line, the only renewable solution that does not involve new transmission costs is distributed generation.  Expert David Morris has an entire Web site dedicated to teaching us how almost every state in the US has the ability to be largely self-reliant in electricity generation from renewable sources.

Small scale, largely rooftop solar, renewable power generation is fast and cheap because it requires no new transmission infrastructure, does not involve extensive permitting and siting processes and is readily accessible, in one form or another, to homeowners and small businesses.  Experience in Europe and the US has shown that when the proper incentives are in place, new solar generation can be added far more rapidly than new large scale generation of any kind.

It is important for the US to have a diverse range of power generation sources, especially renewable sources.  In many cases, large scale wind and solar development has a place in this mix.  However, this Big Wind/Big Solar development also repeats a lot of the same mistakes that are built into the nuclear/fossil fuel system, namely centralization and the need for an expensive and unreliable long distance transmission system.

Unfortunately, FERC and the US Congress are forcing rate payers to pay for new transmission lines. The federal government should be creating incentives for investment in the local distribution systems that we need to allow electrical consumers, in  their own communities, to become self-reliant in local power production.

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