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United States

Grid cost idea set to grow mid-US network

US: Major transmission grid expansion looks likely in the nine middle-American states served by the Southwest Power Pool (SPP), through an innovative method for sharing $1.14 billion in construction costs.

Federal Energy Regulatory Commission (Ferc) approval for the so-called highway/byway plan is expected by early summer, when work can begin on five new long-distance lines that would promote wind power expansion in one of the nation's windiest regions.

Under the plan, published by SPP in April, high-voltage transmission projects above 300kV would be considered highways, with costs assigned to electric utilities across the SPP footprint based on historic usage.

Lower-voltage lines would be considered byways and paid for through a formula that assigns proportional costs to regional utilities.

"The concept is groundbreaking when it comes to cost-allocation policy and getting transmission built," says Vanessa Kellogg, director of project development for Horizon Wind Energy, owned by Spain-based EDP Renovaveis. "This highway/byway allocation is exactly what we needed to just loosen up the gridlock and start getting the transmission built. We're thrilled."

Horizon, which owns five wind projects totalling 525MW in Kansas and Oklahoma, has been at a standstill in the area through increased risk from the lack of buyers on the open market. But any rush to build projects could be four or more years away.

"It's going to take time because you've still got the permitting process just for the transmission lines themselves," says Kellogg. "And then they have to be built."

The lines are expected to increase overall reliability, reduce congestion and facilitate both renewable and non-renewable generation, but given the robust wind resources across the area, wind power will be a primary beneficiary. "Horizon will certainly be looking at future projects that are located in close proximity to the new lines," Kellogg says. "There's no shortage of wind, particularly looking out to western Oklahoma, western Kansas and even the Texas Panhandle. With some of the lines extending up into Nebraska, that's going to enable a lot of opportunity for the industry in all those areas."

While few argue that a massive transmission new-build is needed to revitalise the US electricity grid, agreement on how to pay for the lines has been difficult. Previous methods that once seemed promising for wind ultimately acted as deterrents for new wind (Windpower Monthly, July 2009).

SPP, based in Little Rock, Arkansas, comprises 57 diverse members, including 14 investor-owned utilities, 11 electricity co-operatives and nine municipal power firms. But consensus was reached to spread costs to all five million of SPP's ratepayers.

If approved, the highway/byway method could provide other regions with a much-needed alternative to pay for new transmission lines, such as levying costs on wind generators. "I would argue that if wind has to bear a disproportionate amount of the cost of transmission, then wind just doesn't get built," Kellogg says. "We would have to have so much higher wind power prices to accommodate transmission build-outs if those costs were then levied on us."

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