Xcel Energy is ahead of schedule with construction of its wind projects, but the utility backed off several others because it can’t get the power to customers’ homes.
The reason: a shortage of transmission lines.
Building the high-voltage power lines, which carry electricity from generating stations to substations before delivering it to homes and businesses, has lagged the rapid construction of wind farms because of cost, location and regulatory and technical issues.
And that, in turn, has discouraged wind farms in many areas, especially in northeast Colorado, one of the windiest areas in the state.
Lawmakers plan to introduce bills in the coming legislative session to help alleviate the problem by offering incentives for the construction of transmission lines and mapping the state to figure out the best corridors for the lines. Xcel supports those proposals.
“I think transmission is key to unlocking a lot of renewable energy resource in Colorado,” said Patricia Vincent, CEO and president of Public Service Co., Xcel’s utility in Colorado.
Colorado is not the only state plagued with inadequate transmission lines. The problem exists nationwide.
A study by the U.S. Department of Energy released in August identified areas of severe transmission constraints, with New England, Phoenix-Tucson, Seattle-Portland and the San Francisco Bay Area topping the list.
The second level included Montana-Wyoming and Kansas-Oklahoma. Experts say unless Colorado acts now to resolve its growing problem, it could end up like its neighbors.
Xcel plans to invest more than $420 million in transmission lines through 2010. But the utility says most of the money would be used to bring power from its coal-fired power plant under construction near Pueblo to the Front Range – not wind farms.
“We are caught in a chicken and egg situation,” said Craig Cox of the Interwest Energy Alliance, a Denver-based group that lobbies for the wind industry. “Xcel really cannot have regulatory approval to build transmission until there is a project approved at the other end. On the other hand, it is almost impossible to build a project when the transmission isn’t certain.”
Two years ago, Chicago-based Invenergy’s wind project near Peetz was downsized to 60 megawatts from 140 megawatts. Xcel also cut the size of Portland, Ore.-based PPM’s wind farm near Lamar by half to 75 megawatts from the original 150 megawatts.
“We’d love to build another 75 megawatts,” said PPM spokeswoman Jan Johnson, adding that PPM has permits in Bent and Prowers counties. “But there are transmission constraints to getting the power from Lamar to Xcel’s service territory.”
In early 2005, the utility set aside five bids for projects totaling 1,000 megawatts because they would require transmission line upgrades that would not only take more than four years to complete, but also make the projects economically inviable.
Not all the shelved projects would have passed muster, even if transmission lines weren’t a problem, because of other issues.
But if Colorado had the necessary lines, it would have enjoyed at least 200 megawatts more in wind power – enough to power thousands of homes in the Front Range and save customers millions of dollars, Cox said.
“Hopefully, the day will come when there will be sufficient transmission to carry many of those bids to the market,” Cox added.
Xcel says wind energy saved customers $9.75 million in 2005. An Interwest Energy Alliance study estimates savings of $251 million to Xcel customers from wind energy over the next 20 years.
Because wind power is intermittent in nature, 1 megawatt is estimated to serve roughly 330 customers.
Xcel spokesman Tom Henley said the utility must balance the cost to ratepayers before approving new wind projects. If a project requires long and expensive transmission lines, it’s not economical for customers.
In some cases, getting access to a transmission line might be out of Xcel’s hands. One of the projects was downsized because the nearest transmission line is owned jointly by Tri-State and the Western Area Power Administration, and that line didn’t have enough capacity.
In the past couple of years, Xcel has aggressively pursued wind projects in places that didn’t have transmission issues and where wind-generated electricity could be produced at a modest cost to customers.
Xcel approved 775 megawatts of new projects this year. That’s on top of the 282 megawatts already in its system.
The new projects will make Xcel compliant with Amendment 37 through 2018, Henley added.
In 2004, voters approved the amendment, which requires the state’s top utilities to acquire a portion of their electricity from the sun, wind, and plant and animal waste, beginning with 3 percent in 2007 and increasing to 10 percent by 2015 – at least 4 percent of that from solar.
Farmer Fred Hefley, of Walsh, knows that his county – Baca – could become a major wind energy player.
Hefley and 26 others, mostly farmers and ranchers, pooled their money and effort to form Baca Green Energy. They hope to build a small 15-megawatt wind farm for community use and another larger, 100 megawatt or more project to sell wind-generated electricity to utilities.
Turning their hopes to reality could be a long shot.
For one, there aren’t any transmission lines. And the farmers certainly can’t spend the hundreds of thousands of dollars needed to build those lines.
“We probably don’t have the ability to put a bigger wind farm,” Hefley conceded. “We will probably collaborate with a big company that can build the wind farm and transmission lines.”
What Xcel did
Xcel cut back nearly 150 megawatts and set aside another 1,000 megawatts of wind projects because of transmission constraints.
“¢ PPM’s wind farm near Lamar cut by half to 75 megawatts.
“¢ Invenergy’s wind farm near Peetz cut to 60 megawatts from 140 megawatts.
“¢ Five projects totaling about 1,000 megawatts set aside from consideration.
“¢ Xcel has 282 megawatts of wind energy on its systems and is adding 775 megawatts next year. The total would make Xcel compliant with Amendment 37 through 2018. The mandate requires that Xcel get 10 percent of its electricity from renewable resources by 2015.Source: Interwest Energy Alliance
By Gargi Chakrabarty, Rocky Mountain News
chakrabartyg@RockyMountainNews.com or 303-954-2976