Developers are proposing more than 3,000 megawatts of wind power in Michigan, an amount – at more than 1,000 times larger than existing capacity – that could push the state’s lagging transmission capacity to center stage.
Currently, the state has three wind farms operating – in the Thumb, in Mackinaw City and in Traverse City – with a 32-unit wind farm under construction in the Thumb. Michigan ranks 14th among states for potential wind energy capacity at 7,460 megawatts, according to the American Wind Energy Association.
Wind energy has come to the fore in recent months as Gov. Jennifer Granholm has urged increasing Michigan’s use of wind and other renewable energy resources and lawmakers debate whether to establish renewable energy targets. The creation of a clean-energy industry in Michigan is touted as a way to grow jobs and address concerns over global warming and over-reliance on foreign oil.
“For several years, there have been at least a half a dozen wind development companies knocking on the door in Michigan,” said Tom Stanton, renewable energy program coordinator for the Michigan Public Service Commission. It typically takes companies two years to prepare a request for a place in the queue for interconnecting, though not all projects will be completed, he added.
But state officials do not have a clear picture on how readily the state’s electricity transmission infrastructure could accommodate the added load – a proposed 2,500 megawatts in the Lower Peninsula and 520 in the UP – from new wind-generating sources. A 2006 report from MPSC found that barring “significant enhancements,” existing electric generation and transmission capacity would be insufficient to meet reliability standards in the Lower Peninsula by 2009.
The MPSC is working on a study with transmission-owning companies to determine the cost of updating Michigan’s transmission system.
“If we do this smart, and that’s a big leap of faith right there, where we see the wind being developed is where they need to build transmission anyway,” said Joseph Welch, president and CEO of Novi-based ITC Holdings Corp. [NYSE:ITC], which owns transmission systems in Michigan and other Midwestern states. Along the state’s northern shorelines, for example, transmission capacity has not been upgraded for 40 years, he said.
The prospect of more wind generation, with its stop-start cycle, means the U.S. must learn from other nations that are successfully managing the grid to incorporate more wind power, Welch said. Yet the Midwest ISO, the regional transmission system operator, has a 46-year backlog for studying connecting individual electricity generators.
“The process itself just doesn’t work,” Welch said. “We need to change it.”
The Washington, D.C.-based AWEA, which held a conference last week in Detroit, says transmission is the largest hurdle to expanding wind capacity in the U.S. Much of the 5,200 megawatts of wind energy installed in 2007 was in remote rural areas that are poorly served by transmission lines.
In a conference call with reporters, Rick Sergel, president and CEO of the North American Electric Reliability Corp., said electricity demand is projected to increase 20 percent nationwide over the next decade. The existing transmission system is being operated near capacity, while pending climate-change legislation raises the likelihood of more clean-energy sources.
“It is in that context that we believe the grid will be threatened unless we build the infrastructure that’s necessary to support the renewable resources such as wind, solar and nuclear,” Sergel said.
Because the Midwest ISO can balance electricity output across its regional coverage territory to account for fluctuations in wind energy, Michigan is better-positioned than other states to bring on more renewable generating sources, said Robert Gramlich, policy director for AWEA.
“A lot more wind can be integrated into the power system reliably despite the fact that wind plants can’t be dispatched by utilities and instead, wind plants just operate when the wind blows,” Gramlich said. “This issue isn’t unfamiliar. Nuclear plants can’t be dispatched up and down, they just operate on a fixed level.”
by Sven Gustafson
Oakland Business Review
27 March 2008
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