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United States

Planned $170bn boost to grid good for wind

UNITED STATES: The outlook for an enhanced North American electricity grid has brightened considerably, as evidenced by a report detailing $170 billion in spending on transmission either currently under construction or planned by 2020.

The May report by industry analysts TransmissionHub shows the biggest expenditures will be from 2015-17, when some $80 billion worth of new lines is expected. Much of the transmission activity is slated for wind-rich regions in the Midwest, Texas, the Pacific Northwest and the Tehachapi region of California.

"Building this transmission and the wind energy that will come with it is a great insurance policy against natural-gas price volatility," said Michael Goggin, transmission policy manager for the American Wind Energy Association (AWEA). "It's a tremendous asset for protecting consumers."

Right direction

AWEA's latest figures show 200GW of wind farms in interconnection queues around the US and 45GW of new transmission expected within five years. "Not all of those wind projects are going to get built and the same is true of a lot of the transmission lines," Goggin said. "But we're moving in the right direction."

The ramped-up activity represents a sea change from just a few years back, when lack of attention to an outmoded grid approached crisis status. Much of the progress is the result of a broad-based funding methodology, which spreads transmission costs among large groups of electricity ratepayers - and has garnered support from the Federal Energy Regulatory Commission (Ferc).

"The transmission that we'll see come online over the next five years is a testament that many parts of the country have got the transmission cost-allocation policies right," Goggin said. "That's a remarkable improvement from Ferc's previous policy, which placed all the upgrade costs on the generators - and was basically unworkable for building transmission."

However, there is no guarantee yet that the projects will be finished. Regulatory steps involving routing and siting, plus consultation with landowners, are all part of a time-consuming process. And sometimes, competing plans need sorting out.

"The good news is that everybody wants to construct transmission, and the bad news is that everybody wants to construct transmission," said Beth Soholt, executive director of Wind on the Wires, a Minnesota-based advocacy group. "It's leading to some challenges for figuring out who's going to get to build and invest in the lines."

Smaller footprint

Some take a different path. In May, Texas-based Clean Line Energy gained Ferc approval to sell 75% of the space on its 3.5GW high-voltage direct-current (HVDC) line dedicated to moving wind power 800 kilometres from sparsely populated Iowa to Chicago.

The $1.7 billion project, expected to be operating within five years, requires multimillion-dollar converter stations at both ends. But the HVDC advantage over alternating current comes from lighter lines and shorter towers - moving power more efficiently over long distances. "North-west Iowa is a sweet spot in terms of wind resource," said Clean Line CEO Michael Skelly. "We also know it's a pretty straightforward proposition to build wind farms in Iowa."

Elsewhere, a relatively simple substation upgrade could lead to new transmission being built to move 600MW of Montana wind power to the Pacific Northwest for less than $200 million. "We advocate those types of solutions first," said Cameron Yourkowski, senior policy manager at regional advocacy group Renewable Northwest Project. "Use existing transmission capability as efficiently as possible."

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