The windswept prairies of the Midwest are undergoing an energy transformation the electric grid can’t handle.
Wind turbines tower over rural vistas in the heartland, where the clean energy source is becoming increasingly popular with utility companies that face state-mandated renewable energy standards. Unfortunately, the nation’s aging power grid is hampering those efforts.
At the end of last year, installed wind-generation capacity totaled 60 gigawatts nationwide – 5 percent of the nation’s production capacity – according to data from the U.S. Energy Department’s National Renewable Energy Laboratory. Another 135 gigawatts of potential wind production awaits development and connection to the grid, according to industry data.
“There hasn’t been a lot of investment in the grid for the last two decades,” said Michael Goggin, a senior analyst at the American Wind Energy Association, the industry’s main trade group. “We just don’t have a strong grid that’s built out in the parts of the country where there are a lot of wind resources.”
The transmission grid was built a generation ago for coal, nuclear and hydropower plants without renewable energy in mind. It makes transmission from wind farms in rural areas difficult and costly.
The shortfall in transmission capacity hasn’t gone unnoticed.
Gil Bindewald, a project manager at the Department of Energy, said decision makers had to consider policy, technology and financing when dealing with transmission issues.
“There is no silver bullet solution for effectively integrating renewable sources of energy such as wind onto the grid,” Bindewald said.
The growth of the nation’s wind-power supply is evident on a remote stretch of Kansas Highway 23, where the spinning blades of wind turbines quickly surround motorists near the town of Cimarron. The site, which has 57 turbines spread over 16,000 acres of leased farmland, is capable of powering 40,000 homes with 131 megawatts of production.
But Duke Energy and Sumitomo Corp., which brought the project online in June 2012, face significant congestion as they try to bring that energy to the market.
Greg Wolf, the renewables president at Duke Energy, wouldn’t comment on the level of congestion, but he said the bottleneck was noticeable.
“Because it’s new and because there’s variability in wind versus a traditional gas-fired unit, there’s been a learning curve here,” Wolf said. “Not to mention the fact that we’ve added a large number of new megawatts at a quick pace.”
Wolf said deficiencies in the grid and differing state policies on the placement of transmission lines were prime causes of congestion.The Southwest Power Pool, the Federal Energy Regulatory Commission’s regional transmission operator in the area, said it experienced four to five transmission curtailments – periods of high congestion that shut down wind units – per week. Over the past eight months, those curtailments have affected up to seven sites.
“They’ve connected to the system in our region ahead of planned transmission upgrades,” said Southwest Power Pool’s director of system operations, Don Shipley. “Some of the wind farms have seen fairly significant impacts of up to 50 percent of their projected production.”
In other words, a lot of the power those farms were expecting to generate isn’t making it to the market.
Shipley said the electric market and the wind farms were losing money because of the curtailments, as the pool is unable to sell power that the grid is incapable of transmitting.
A report last year from Synapse Energy Economics, a Cambridge, Mass., consulting firm that specializes in energy and environmental issues, highlighted 17 grid-expansion projects that it said were needed within the Midwest Independent Transmission System Operator, which oversees the upper Midwest’s power grid; that would help address congestion and grid reliability and also satisfy state clean-energy mandates.
The projects could increase wind energy production by an additional 41 million megawatt hours, enough to power about 3.5 million homes annually.
Opponents of wind energy say that even a nominal increase in transmission costs will mean higher utility prices for consumers.
The industry counters that any rate increase would be small.
“It’s not a considerable impact,” said Natalie Hocken, an official at PacifiCorp, a power company in the Northwest. “A large transmission investment will have some impact on our rates just like any other capital investment would.”
In the Synapse study, models show that the average one-megawatt-hour-per-month consumer in the upper Midwest might save as much as $17.50 per year with 20 gigawatts of wind production on the grid by 2020. According to the Synapse study, “Since wind energy ‘fuel’ is free, once built, wind power plants displace fossil-fuel generation and lower the price of supply – thus lowering the energy market clearing price.”
Along with infrastructure, the policy on building transmission lines to service new markets has fallen behind.
Utilities and policy makers often blame transmission policy for delaying grid expansion. For PacifiCorp, permitting takes at least three years at the federal level alone. Including the permitting process, constructing transmission projects can take up to eight years.
As with the grid, the policies were developed when utilities owned the generation and transmission infrastructure required to deliver electricity.
“We’ve transitioned to a kind of market structure with competitive markets for electricity, and the same company doesn’t own both the transmission and generation,” said Goggin, of the American Wind Energy Association. “The policies that were able to build transmission under the old system don’t work under the market system.”
The Federal Energy Regulatory Commission acts as a backstop in policy disputes. Under a new policy, the commission is working to make the development of transmission lines between states easier for utilities.
The Southwest Power Pool is moving to boost communication with the sites it oversees. The two sides are working to improve the real-time ability to react to curtailments throughout Southwest’s grid system. Shipley said he expects transmission projects targeted for completion in 2015 to alleviate regular curtailments in the region.
For the wind industry, tackling transmission is the key to tapping a vast resource. If the industry doesn’t increase capacity, utilities might be stuck watching their resource blow away.
“There’s enough resource there to power the United States a dozen times over by conservative estimates,” Goggin said. “A lot of that resource is concentrated in the middle of the country, far from where people live. There’s extremely cost-effective wind left out there. We just can’t tap it, because we haven’t built out the transmission system.”