United States

United States

Lack of transmission hindering corporate growth

UNITED STATES: The US faces a lack of transmission planning that could reduce major companies' appetite for renewable energy, including wind power, a new report has warned.

Amazon Wind Farm Fowler Ridge, in Indiana, provides power to data centres
Amazon Wind Farm Fowler Ridge, in Indiana, provides power to data centres

Transmission planners are failing to account for up to 51GW of potential near-term corporate procurement of renewable energy, according to a report conducted for the Wind Energy Foundation (WEF).

The report found by 2025, planned transmission build-outs might meet only 42% of US corporate renewables demand.

Even if there is a low level of demand, which is unlikely, still only 78% of corporate demand might have access to transmission by that date.

"[General Motor's] ability to access renewable energy is key to our decisions about where to expand new facilities," said Rob Threlkeld, global manager of renewable energy at car manufacturer General Motors, which has signed four power purchase agreements (PPAs) with wind projects in Texas, Illinois and Ohio.

Threlkeld said it was "very possible" the lack of transmission would affect how much renewable energy his firm might procure in the future. By the end of 2018, renewable energy will power 20% of GM's global electricity use.

The problem of this "transmission gap" is especially acute for wind power and less so for utility-scale solar, which can sometimes be built near a load centre.

Planning for the US's transmission grid is piecemeal compared with other developed countries.

Since corporate renewable-energy load growth is voluntary, it is harder to project than if it were related to government policy, said John Kostyack, executive director of the WEF.

"We are especially concerned about the scope of geographical [transmission] planning," he said.


The report's authors called for major companies to become involved in conversations about regional and inter-regional transmission planning.

"Companies must share their expertise and where their demand will be," said Kostyack. Indeed, the necessary conversations have already started.

David Gardiner, president of David Gardiner and Associates, which produced the report, noted that in 2016 five major companies — GM, Unilever, P&G, Kellogg Company and Nestlé — openly supported the building of Clean Line's planned Grain Belt Express multi-state HVDC line across Missouri. It has yet to be approved.

The report focused on 15 states in the central US, a region that accounts for 88% of the country's wind potential. However, most load growth is not expected in this area.

The projected corporate procurement scenarios analysed in the report are significantly larger than the projected renewables needed to meet state renewable portfolio standard (RPS) demands.

According to the American Wind Energy Association, RPS policies will drive the development of some 15.5GW of new wind power capacity from 2017 to 2025.

In contrast, a coalition of more than 100 corporations — the Renewable Energy Buyers Alliance — set a goal in May 2016 of purchasing 60GW of renewables by 2025. Some 9GW has so far been procured since 2013.

The trend of Fortune 500 companies purchasing renewable energy in the US took off five years ago, largely in response to corporate sustainability policies.

Corporate and other non-utility customers — including the US army, universities and governments — accounted for 52% of all wind capacity contracted through PPAs signed in 2015 in the US, and 39% in 2016.

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