The study is hardly a concrete proposal -- for now -- but it serves as just one example of the kind of big picture, long term thinking that is taking place in the US as the wind industry acknowledges that transmission constraints are both the greatest hurdles to wind energy development in the US and the areas of greatest possible gain.
MISO's "what if" study is the brainchild of Dale Osborn, the company's transmission technical director. MISO is one of the largest Regional Transmission Organisations, or RTOs, in the US. The non-profit business provides consumers and industry with regional grid management and ensures open access to transmission in an area covering 15 US states and one Canadian province. In all it oversees 93,600 miles of transmission and 116,000 MW of peak capacity.
Mandates need vision
Not only is MISO large enough to dream big about transmission and the wind power it could accommodate, but Osborn sees market scenarios that require studies of such vision. Michigan alone will need more than 9000 MW of new generation in the next 20 years. And as farming communities and politicians alike continue to embrace renewable energy, the likelihood of renewable energy mandates being commonplace in most Midwest states is growing.
Minnesota is typical of the trend. Its Senate has passed a 20% renewables mandate, but the legislative session ended before the bill could be passed. It is expected to be reintroduced by next year's state legislature where its passage is a near certainty, according to Mike Jacobs of the American Wind Energy Association (AWEA), who sees considerable foresight in MISO's study assumptions.
Osborn pursued the transmission study with a scenario of Minnesota enacting its 20% mandate and the remaining 14 states in MISO's coverage area following suit with a lesser 10% requirement. "All I can say is that this is strictly exploratory but it's not out of sight," Osborn says. "We have people considering construction on part of this as soon as they can. The whole thing would take at least ten years to build but that's a realistic scenario and fairly realistic in transmission terms."
AWEA's Jacobs agrees the MISO plan is not out of sight. Rather, it is this big picture modelling that has to take place as energy demands ratchet up each year and states enact renewable energy mandates, he says. "What MISO is doing is showing how to move all that wind," says Jacobs. "They are showing if you have ambitions for wind like this, here is the engineer's first look at this. They are the best ones to draw that sketch and give everybody something to talk about."
Big picture modelling means a big picture price tag: the total line cost of the conceptual transmission expansion is estimated at $31 billion. Jacobs, however, says transmissions costs have typically been on the order of one-tenth of the cost of the energy investments. This ratio is not true of one or a few specific wind or thermal plants, he says, but it is the case when looking at the larger, overall cost for transmission upgrades to wide areas.
"Even a grand scheme like MISO describes will pay for itself because energy costs are so much higher," says Jacobs. "That's what we call investment in energy infrastructure. It's either that or it's LNG terminals scattered offshore."
Jacobs says MISO's vision is what is needed if wind power is to provide 20% of electricity, as President George Bush stated may be possible earlier this year. "We believe the DOE takes that to their desks and works on it everyday," he adds, with reference to the US Department of Energy.
One of those DOE staffers is Ellen Lutz, who says the MISO data shows the proposed transmission line could lower the Locational Marginal Pricing (LMP) of energy. This is the driver that sets the price for power in a larger area and it is typically dependent in nearly all parts of the country on the price of natural gas. As large amounts of wind are introduced into the system, however, the LMP shifts to be dependent on wind, which can well be cheaper than natural gas. That point has been demonstrated by Xcel Energy's wind energy program in Colorado: wind, normally priced at a premium, was less costly than regular power (Windpower Monthly, May 2006). "Transmission congestion can prevent less expensive energy from coming into an area," says Lutz.