Transmission 2.0

The United States is already one of the world’s most attractive wind energy markets and despite signs of a slow down, the sector could achieve far, far more. With a new administration in the White House comes an opportunity to address some of the key barriers to continued wind sector growth. Obama has already more than hinted at a programme of accerated grid development and more renewables, and here, Peter Duprey explains, the development of a new type of transmission system must indeed be a priority.

For much of last year we listened to US Presidential candidates’ talk of energy independence, promises of an expanded commitment to renewable energy generation, green jobs and the importance of combating climate change. Now, with President Obama in office, the US can move past the speeches and into meaningful action.

The United States has an opportunity to move now to a new energy model – one that not only supports the shift towards renewable energy, but which also creates a reliable transmission infrastructure to support it. Just as the country saw a sea change in the last century with the creation of an Interstate Highway System that connected people, goods and services, it now needs an interstate energy transmission system that can move the country to a new model of energy supply and distribution. And, like any evolution of this sort, it will require not only the commitment of resources, but a shift of mindset as well. The future promise of the United States is one of clean, domestically generated energy, and rethinking America’s energy transmission infrastructure is the key to unlocking that promise.

The US Department of Energy has concluded that wind harnessed in as few as three states – Texas, Kansas and North Dakota – could provide enough electricity to power the entire nation. That’s the good news. However, the bad news is that with our current transmission capabilities, we can’t get this vast domestic energy resource to the areas where most people live.

The current transmission grid is simply incapable of handling the potential amount of clean renewable energy that can be produced. This nation’s imperative must be to change and expand its transmission capabilities so that we can provide that clean energy. But if we are to galvanize this change, we must adjust our collective mindset. Just as the American public has rallied around utilization of untapped gas and oil reserves, we must now recognize that the wind is a vast, untapped clean energy reserve. Once we embrace that idea, our leaders will understand the urgency of expanding our transmission system. In a time of economic crisis and insecurity, this initiative can provide jobs to the American people who so desperately need them and energy independence from foreign suppliers of oil.

Challenging terrain

Clearly there will be challenges. The current transmission grid in the United States was conceived more than 100 years ago. That system was built largely on a utility-by-utility basis to transport power from large central power stations to load centres. And by and large, most industrial cities were built close to the energy source – coal. At that time, the transportation of large quantities of remotely generated power supplies across long distances was not anticipated. The system is outdated and ill-equipped to handle the transmission of clean power from rural areas to the urban centres that need it most.

In addition, electrical generation is growing four times faster than transmission lines are being built. That imbalance is creating bottlenecks in the system that interferes with reliable and efficient delivery of electric power. According to the Edison Electric Institute, energy demand has increased by 25% since 1990, while construction of transmission lines has in fact decreased by about 30%.

There are several factors impeding the creation and implementation of a national plan to expand the grid, but the most difficult obstacle is that we have no clear indication of who is in charge. Not only are there multiple Federal, state and local regulations and organizations governing the construction of transmission lines, but there is no clear line of authority or responsibility for a federal transmission policy. Two agencies at the national level, the Federal Energy Regulatory Commission (FERC) and the Department of Energy, now headed by Dr Steve Chu, have responsibility for developing policies on transmission and these policies do not necessarily coincide. With one organization answering to Congress and the other answering to the President, it is difficult, if not impossible, to define a coherent action plan.

Due to the lack of strong Federal policy, many utilities, states, and companies are taking individual action. For example, California is initiating a state-wide effort called the Renewable Energy Transmission Initiative (RETI) to bring together utilities, renewable energy producers and transmission operators to identify how best to upgrade and expand the grid. Another example of energy innovation at the local level is the effort led by Governor Hoeven of North Dakota. Hoeven, together with governors in Iowa, Minnesota and Wisconsin, is working to create a regional transmission planning effort that will promote investment and cost-sharing in the transmission grid.

Although these and other state initiatives are important and essential to the growth of renewable energy, it is imperative that we do more. Both the 111th Congress and the Obama administration must make a coherent transmission policy an urgent national priority. This is critical for the US economy, security and future.

President Obama says he is committed to mandating that the United States generate 10% of its electricity from renewable energy resources by 2012 and 25% by 2025. If this is a serious commitment, a national transmission plan must be at its core. An investment in transmission will yield multiple strong returns in renewable energy, job growth, economic development, and additional tax revenues.

All of us in the industry recognize the extraordinary financial challenges facing our sector. Liquidity crises, unexpected tightening of capital and reductions in the price of oil are all very real issues. Many projects may be at risk. But this slowdown should not be an excuse for abandoning our efforts to build up our transmission infrastructure to transport clean, domestically generated energy. The process will take time – many years, in fact – which is why we must start today to change the national mindset about the urgency and necessity of harnessing the vast untapped reserves of renewable energy in the United States. There are some signs of progress. Projects like Acciona’s Tatanka Wind Farm, for example, may yet benefit from Governor Hoeven’s initiative. A 180 MW installation, it spans more than 14,000 rural acres (5700 ha) on the border of North and South Dakota, two of the top five states in the country for the production of wind energy. In fact this part of the United States has been called the ‘Saudi Arabia of wind’ because of the area’s enormous wind energy resources. With 120 turbines, Tatanka is the largest wind farm in the Dakotas and the development has created local jobs, provided additional revenues to local landowners and expanded the tax base for the community. That’s all good news, but we could be doing so much more.

Each day that the wind passes through the Dakotas without putting it to work is another day of economic and energy loss. Transmission is the conduit to economic growth and a clean, renewable energy future for the United States. Without a concerted national effort, one with a commitment like Eisenhower’s investment in a national Interstate Highway System, we will not realize this future.

Peter Duprey is Chief Executive Officer of Acciona Energy North America.


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