Executive Insight, Policy & Regulation, Renewable Energy, T&D, Transmission, Wind

AWEA: Transmission still a barrier for wind power

Transmission is “extremely important” to the future of the wind energy industry in the U.S., and is the “industry’s number one barrier” to integrating more wind energy according to Rob Gramlich, interim CEO of the American Wind Energy Association (AWEA).

In its “U.S. Wind Industry Annual Market Report for 2012,” released on April 11, AWEA said that if completed, 19 near-term transmission projects identified spanning the Plains states, Upper Midwest, Interior West and California could carry about 69,580 MW of additional wind power capacity, which would more than double the currently installed base of wind power projects in the U.S.

Those include the 500-kV One Nevada (ON Line) project in Nevada; the 230-kV Walla Walla – McNary project in Oregon and Washington; 230-kV Montana Alberta Tie Line (MATL) in Montana; and the 345-kV Pawnee-Smoky Hill project in Colorado, which are expected to enter service this year, AWEA said.

According to TransmissionHub data, NV Energy’s (NYSE:NVE) ON Line is a 235-mile 500-kV transmission line that will run from the existing Harry Allen substation in Clark County to the Thirtymile (aka Robinson Summit) substation in White Pine County. While ON Line had an in-service date of year-end 2012, on Feb. 3, 2012, it was announced that it would be delayed because of wind damage to certain tower structures and is now expected to enter service in the latter half of 2013.

Montana Alberta Tie Ltd.’s MATL is a 214-mile, 230-kV transmission line that originates at Lethbridge, Alberta, and terminates at Great Falls, Mont. The project is estimated to cost $400m and construction is set to complete in mid-2013.

The Pawnee to Smoky Hill project is a 95-mile line, double-circuit 500-kV transmission line that will cost $155 million. The transmission line, which is scheduled for completion in 2013, will connect Xcel Energy subsidiary Public Service Co. of Colorado’s (PSCo) existing Pawnee substation near Brush, Colo., to PSCo’s Smoky Hill substation near Aurora, Colo.

Three completed transmission projects to add more wind

AWEA said that in 2012, three transmission projects were completed: the 500-kV Sunrise Power Link with an estimated potential wind capacity of 1,000 MW; the 345-kV Hugo Valiant project in Oklahoma and the 345-kV KETA project in Kansas and Nebraska.

According to TransmissionHub data, the Sunrise Powerlink, proposed and built by Sempra Energy (NYSE:SRE) subsidiary San Diego Gas & Electric (SDG&E), is a 117-mile transmission line designed to carry renewable energy from El Centro to San Diego, Calif. The project includes a 6.2-mile 230-kV segment and a new 500-kV substation.

The Great Plains (Hugo to Valiant) is an 18-mile transmission line that begins in Hugo, Okla., and ends in Valliant, Okla. The transmission line was built by ITC Holdings (NYSE:ITC).

“It is expected to be an even busier year in 2013 for new transmission infrastructure scheduled to be completed, including the [Competitive] Renewable Energy Zones (CREZ) projects in Texas, many of the CapX transmission projects in [the Midwest ISO] and a number of transmission projects in [the Western Electricity Coordinating Council (WECC)],” AWEA said.

“I think, frankly, what this report is showing is what we as an industry can do when we set our mind to something and we turn the headlights on and look at what are our barriers and how do we address them because there has been a tremendous amount of transmission development,” Gramlich said during an April 11 webinar on the report. “It is a frustratingly slow sector to work on, but even despite what seems like molasses, is actually flowing pretty strongly.”

He said that about a third of the wind development in 2012 occurred in the south-central states of Texas, Oklahoma, Nebraska and Kansas, which is where “a lot of the new transmission is coming on — the Texas CREZ and the Southwest Power Pool lines — so, you can see that transmission is opening up markets and allowing new development, and influencing where that development goes.”

Emily Williams, senior policy analyst with AWEA, said during the webinar, “[T]here’s a big move to increase our transmission capacity and get the wind resources we have to the population centers.”

AWEA said wind power projects totaling 127,071 MW were in the interconnection queue at the end of 2012, a decrease from the roughly 197,000 MW of wind power capacity in the queue at the end of 2011, and 296,000 MW at the end of 2010.

“Much of the decline can be attributed to interconnection queue reforms that have imposed stricter requirements, eliminating projects with low probability of proceeding to development,” AWEA said. “Overall, however, the magnitude of the interconnection queue number indicates the significant level of interest in developing wind energy, particularly since many applications for interconnection require a sizable financial deposit.”

Utilities turn to wind

According to the report, the top five electric utilities with wind power capacity on their system are Xcel Energy, MidAmerican Energy — including PacifiCorp — Edison International subsidiary (NYSE:EIX) Southern California Edison, PG&E Corp. (NYSE:PCG) subsidiary Pacific Gas & Electric and American Electric Power.

The top 20 investor-owned utilities, which serve more than 36.6 million people, either own or have contracted 26,479 MW of total wind power installed in the U.S.

AWEA also said that more than 1,400 utilities purchase or own wind power directly or through wholesale electric power providers including joint action agencies, generation and transmission (G&T) cooperatives and other authorities.

The top 10 rural electric cooperatives with wind capacity on their system are all G&T cooperatives and include Basin Electric Power Cooperative in first place with 716 MW of total wind capacity, followed by Associated Electric Coop., with 618 MW and Great River Energy with 474 MW.

During the webinar, Gramlich said such large numbers of utilities are turning to wind because when one assesses costs and risk together, wind energy is almost the least-cost resource and as risk-free as any resource. Also, in the current environment, the reality is that new nuclear and new coal sources are going to be very limited and long-term natural gas prices are uncertain, he said, adding that wind “perfectly fits into the utilities’ objectives of attaining that diverse portfolio.”

Williams noted that there are 13 offshore wind projects in various stages of development, spanning 10 states off of the East and West coasts, as well as off the coasts of Texas and the Great Lakes.

According to the report, those projects represent more than 5,100 MW of offshore development with turbine sizes ranging from 3 MW to 6 MW.

The proposed offshore Atlantic Wind Connection (AWC), which is led by Trans-Elect Development Company with Atlantic Grid Development as the project developer and Google, Bregal Energy,Marubeni Corp. and Elia as sponsors, could carry up to 7,000 MW. AWEA also said that in May 2012, the Bureau of Ocean Energy Management (BOEM) issued a finding of no competitive interest for the AWC project. BOEM issued a similar finding in August 2012 for the transmission line associated with Deepwater Wind’s proposed 30-MW Block Island Wind Farm off of the coast of Rhode Island, AWEA said.

2012: ‘Best year ever’ for wind in U.S.

In an April 11 statement, AWEA said wind energy grew 28 percent in the U.S. last year, setting a new installation record.

In its “best year ever,” the U.S. industry topped all energy sources with 42 percent of all new U.S. electric generating capacity. More than 6,700 new wind turbines were erected, producing enough electricity to power the equivalent of 3.5 million homes. Overall, AWEA added, the country finished the year with 45,100 wind turbines that can power 15.2 million homes.

AWEA noted a growing trend: new purchases of wind power by 74 electric utilities, along with at least 18 major industrial consumers and 11 school and universities — in efforts to diversify their energy portfolio and stabilize and lower energy costs, typically on long-term, fixed-rate contracts. Rising utility interest has been seen again this year since the extension of the production tax credit (PTC), with at least seven utilities issuing new requests for proposals to purchase more than 1,000 MW of wind power, AWEA added.

Congress passed the American Taxpayer Relief Act on Jan. 1, and President Barack Obama signed it into law on Jan. 2. AWEA also said on its website that the legislation includes an extension of the PTC for projects that start construction before Jan. 1, 2014, and an extension of the investment tax credit for projects that start construction before Jan. 1, 2014.

During the webinar, Gramlich noted that in his recently released proposed budget, Obama called for a permanent PTC.

This story was originally published by TransmissionHub. It is republished by permission.