But a new approach by market regulators and system operators seems to be working, with a steady stream of wind friendly transmission plans now taking shape across America. The wind industry in the United States may still be enjoying a celebration of last year's record-breaking performance, with 8.4 GW of new capacity installed, but the obstacles to future development still remain. One of the biggest is the lack of electricity transmission capacity. By the end of 2008, "We really hit the point where the existing grid was fully subscribed and used up," says Rob Gramlich of the American Wind Energy Association (AWEA). "New projects going forward have to have a transmission solution."
Over 300 GW of wind projects are stuck in electricity grid interconnection queues, he says. Until the huge task of eliminating transmission bottlenecks across the United States is achieved, most of them will stay there, effectively remaining just "paper projects."
There has been progress. Several wind friendly transmission scenarios are now in the works, driven by a change in attitude - and strategy - to accommodating wind by electricity market regulators and system operators alike. As a result, 16 new transmission development plans are now in the pipeline. These could potentially see over 36 GW of the wind capacity currently stuck in grid connection queues up and running in the next few years (map page 55).
With many of these plans, the "chicken or egg" cycle of which investment should come first, transmission lines or wind projects, has been broken. With transmission wires taking about a decade to plan and build and costing billions of dollars, investment in them can only be justified if there are generators signed up to use them. In most cases, transmission planning models have been introduced to provide that certainty. They abandon the old system of accepting requests for grid interconnection from generators on a "first come, first served" basis. Virtually anyone proposing a project could enter the queue and assume a sequential place in line. This created logjams in the construction of new wind projects and transmission lines.
Instead there has been a shift towards transmission planning being co-piloted by system operators, grid planners and wind project developers who can demonstrate they have the capital or creditworthiness to get them built and users of the wires signed up. A case in point is the plan for transmission upgrades in the US Northwest. Here, the federal government's Bonneville Power Authority (BPA) is the dominant transmission provider.
BPA, having turned its back on the "first come, first served" system, is instead prioritising developers willing to make a financial commitment in advance - a revised version of a system it first tried in 2004. That failed to attract bids from wind developers because it required generators to make a hefty upfront commitment to share the full cost of the upgrade. Most developers or their financial backers were unable and unwilling to do that.
Under the revised system, BPA is paying for new lines itself, recouping the cost by raising electricity bills for the 12 million customers in its service area and through transmission system use charges. Its decision to do this is based on recognising the full benefits resulting from the transmission upgrades. These include the economic benefits to the region as whole in terms of revenue generation and job creation from wind projects as well as meeting energy demand and mandatory renewable energy targets. "For those reasons, BPA made the determination that building the lines and charging embedded rates was justified and had an acceptable risk," says Cameron Yourkowski, a transmission expert for the Renewable Northwest Project.
Striking a better balance than the 2004 system, BPA's new approach still requires some financial commitment from companies with viable projects. This enables the agency to screen out speculative bids from the list of companies applying for access. The commitment on generators subscribing to use the wires amounts to $1 million for each 100 MW of project capacity and a further legal obligation to pay for transmission service upon completion of a line.
The new system has been used for the first round of bids by firms for access to transmission capacity on five planned lines collectively branded Open Season (map ref 4) and for the 128 kilometre McNary-John Day line (map ref 2), already under construction in the wind-rich Columbia River Gorge between Washington and Oregon. It has worked like a charm, says Yourkowski. Before there was 16 GW of proposed generation seeking access to BPA's planned Open Season line upgrades. With the new system this dropped to 6410 MW for the first round of bids, completed in late spring. Wind projects represent 4716 MW, or 74%. More wind capacity is likely on the five Open Season lines, with more invitations to bid expected in the future.
Significantly, the wind proposals now in the queue represent projects likely to be built, says Yourkowski. "It is a very innovative plan." Similar open invitations, where a utility or transmission provider proposes a line and asks who wants in, have been done before. But BPA is unique in that it went to its existing interconnection queue, asked for everyone who was serious to put money up, and then restacked the queue to see where the more viable requests were coming from, he says. This then gave a clear picture of what lines are needed first and which are most justified. "Open Seasons have been done with singular lines before but, on a network-wide basis, that is the first one I am aware of," Yourkowski adds. The developers that applied to BPA, he says, are the usual big name players in the US wind project development industry, including Spain's Iberdrola, Energias de Portugal subsidiary Horizon and Enxco, owned by Electricite de France.
Another transmission project planned in the Northwest is utility Pacific Power's 235 kW line running just over 100 kilometres from Walla Walla, Washington, to Umatilla, Oregon (map ref 3). It will accommodate 400 MW of wind capacity if it goes ahead. The utility, however, is delaying its original 2010 online target date by two years to re-evaluate the economic benefits of the line before proceeding with construction. "We expect the line will be built, but believe additional due diligence is the right thing to do," says the firm. Yet another line planned in the Northwest is Juan de Fuca (map ref 1), an underwater transmission cable project to link up America's Washington state and Canada's Vancouver Island (box).
Most ambitious
While these various Northwest projects could see just over 6.8 GW of new wind capacity connected to the network by end 2012, the southern state of Texas is home to the largest and most lauded wind-friendly transmission plan in America. Of all transmission upgrades certain to come online in the next few years, the Competitive Renewable Energy Zone (CREZ) project will accommodate the largest slug of wind capacity - up to 9-10 GW when the criss-cross of lines (map ref 16) are completed between 2012-2013.
As with the new BPA system, the CREZ plan identifies where capable and capitalised or creditworthy wind developers are most likely to build wind plants if transmission lines were available. Interested developers provide letters of credit proving their future projects can be financed, reassuring state regulators that investment in new transmission lines is viable. With the cost of the wires justified, the regulators, led by the Public Utilities Commission (PUC), pay up front for the CREZ lines. This spring they released $5 billion, enabling construction of the 4600 kilometre network that will unlock the state's strongest winds in West Texas to get under way (“uåX˜äŠÊ˜·³Ç, March 2009). The state will recoup the cost through a modest increase in electricity bills for all 24 million consumers in the state.
Money raised by an increase in consumer bills just north of Texas will also pay for new transmission lines planned by the Southwest Power Pool (SPP). With the same wind-rich regime as West Texas, SPP's system territory spans through the flat rural plains of eastern New Mexico, the Texas Panhandle, Western Oklahoma and Kansas. With three separate transmission projects in the works, at least 7.6 GW of new wind capacity will be accommodated on the SPP network. In reality it is likely to be substantially more - the 7.6 GW applies to just two of the planned projects.
The first SPP connection due for completion is the 193-kilometre 345 kV Northwest-Woodward District Extra High Voltage line running from Woodward in west Oklahoma to a substation outside Oklahoma City (map ref 15). Currently under construction by Oklahoma Gas & Electric (OGE), it should be finished by the end of this year. OGE's Brian Alford says the line is rated at 1800 MW with wind expected to account for most of that.
Wind motorway
Next up is SPP's $700 million balanced portfolio transmission plan (map ref 14). SPP approved the project's construction in April, proclaiming it to be a beneficial and essential system upgrade that justifies rolling out the costs across all its customers. Spanning a distance of over 1000 kilometres, five new transmission lines will be built, along with a 345 kV transformer and a new connection between two existing 345 kV lines.
The 345 kV lines in the western SPP region "will serve as key collector facilities to enable significant wind development in support of a longer-range 765 kV backbone system," says Jay Caspary, head of transmission planning for SPP. Eventually, SPP aims to establish a network of powerful 765 kV lines running through its territory that will function like an interstate motorway for wind power transmission, he says. SPP does not say how much wind the new Northwest-Woodward lines will accommodate, but estimates put the figure in the thousands of megawatts.
The third SPP development is Tallgrass/Prairie Wind, a 765 kV two-part project spanning Oklahoma and Kansas (map ref 13). It is widely expected to gain full approval from regulators and may be built as early as 2013, providing significant connections between the eastern and western parts of SPP's territory. The Tallgrass element will include lines from Woodward. One runs around 200 kilometres northwest to Guymon, the other about 80 kilometres north to the Kansas border. The project is a joint venture between OGE and Electric Transmission America (ETA), itself a joint venture of subsidiaries owned by American Electric Power and MidAmerican Energy Holdings Company.
Running from the Wichita area to western Kansas, the Prairie Wind part of the plan, also called the Kansas V-plan, was originally proposed by two companies: Prairie Wind Transmission, a subsidiary of ITC Holdings, and ITC Great Plains, a joint venture between Westar Energy and ETA. Last month the companies agreed to share transmission construction in south Kansas. The plan still needs final approval by Kansas regulators and SPP, but it is considered a milestone in bringing online the first new 765 kV lines west of the Mississippi.
In the northern state of Minnesota, which is aiming for 5 GW of new renewables by 2025, a swing to pro-wind transmission planning is happening. To achieve its green energy target, the state is requiring all utilities to obtain at least 25% of their energy from renewables by 2025, with Minnesota's dominant utility, Xcel Energy, held to an even higher standard of 30% by 2020. To that end, state regulators have approved construction of three 345 kV transmission lines, part of a plan known as CapX 2020, which also includes a 230 kV line still under review (map ref 6). CapX 2020 is a joint initiative of 11 utilities in Minnesota and the surrounding region designed specifically to accommodate more wind.
Two of the 345 kV lines will run from Minnesota's Twin Cities area: one to Brookings just across the border in South Dakota and the other to La Crosse, Wisconsin. The other runs from Fargo in North Dakota to Monticello in Minnesota. The Brookings to Twin Cities line expands across a swath of Buffalo Ridge. This raised plateau, extending through Iowa, Minnesota and the Dakotas, offers some of the best wind in the upper Midwest region. Overall, the trio of lines is expected to accommodate 2275 MW of new wind power. The CapX 2020 lines have also been approved to be double-circuit ready so that they can be upgraded with a second set of high voltage lines as demand grows, without requiring new towers or permitting of new transmission corridors. The 230 kV line, if also permitted, will run from Bemidji to Grand Rapids in the north of the state.
Moving southwest to Colorado, where Xcel Energy is again the dominant utility, it is also involved in expanding the transmission network. Xcel has recently received the necessary approvals for its Pawnee-Smoky Hill upgrade (map ref 11). The new 345 kV line will accommodate about 500 MW when completed in 2013-14.
Joe Fuentes from Xcel says the line will bring electricity generated by wind from an area in northern Colorado, which he describes as a wind tunnel, down to the outskirts of the state's largest city, Denver. This is in the general vicinity of the 400 MW Peetz Table wind project built by FPL Energy, now NextEra (“uåX˜äŠÊ˜·³Ç, June 2007). Developers are eager to build significantly more wind projects in the area, says Fuentes. In a recent Xcel Energy request for proposals for 1 GW of new generating capacity, the utility received submissions from over 100 companies for over 20 GW. More than half of that was for wind power, Fuentes says.
Another project that will see more wind-generated electricity fed into the Denver area is the Colorado-Wyoming line (map ref 10). The 345 kV line is expected to accommodate around 850 MW of wind and will run 290 kilometres to bring power to Denver from windy Wyoming. Last summer, an open invitation to bid for transmission access to the line resulted in commitments for 585 MW, split between generators Duke Energy Ohio and GreenHunter Wind. The spare 256 MW available is being allocated on an application-by-application basis.
Things to do in Denver
The project began as a public-private partnership comprising Wyoming Infrastructure Authority, Trans-Elect Development Company and Western Area Power Administration. New Jersey transmission company LS Power took over the project in April. The firm is also one of the companies building out the CREZ lines in Texas, responsible for a $400 million portion of it. But its most ambitious renewable energy friendly transmission line is its Southwest Intertie Project (SWIP).
SWIP is a 500 kV line stretching almost 1000 kilometres, connecting southern Idaho with southern Nevada (map ref 7). It could link around 1200 MW of rural wind projects in southern Idaho with energy demand in Nevada, Arizona and California. AWEA's Michael Goggin says the line is likely to be fully built out as planned and represents an impressive solution for accessing distant high quality wind. If permitted soon, as Goggin expects, the southern portion between Nevada and the Thirtymile Substation is slated to be in service next year, with the northern part, from the Thirtymile Substation to Idaho, ready in 2011.
SWIP is not the only line planned to bring high quality remote wind to urban centres in that region. The 1287 kilometre 600 kV Transwest Express LLC line is another (map ref 9). With capacity to accommodate 3000 MW, it will link southern Wyoming with Las Vegas, Nevada, meeting electricity demand at that point or further distributed into the California market using existing lines. Loyd Drain of the Wyoming Infrastructure Authority is confident that the line will begin construction in 2012 and be completed by 2014. Transwest Express LLC is also a subsidiary of the Anschutz Company, a major development and media conglomerate led by Philip Anschutz. "Anschutz has never really started anything he has not finished," notes Drain, who is also a transmission expert with engineering services firm Taylor and Hill, based in Houston, Texas.
There is some opposition to the SWIP wire proposal and others in the west. Opponents say it could pave the way for new coal-fired stations. Drain says this is unlikely. Most of the line will be used for wind with natural gas filling in, he insists. "They are not going to fill in with coal because nobody will buy it," he says. California's utilities, in particular, are vetoing new coal power and that trend is spreading as the prospect for federal carbon emission limits draws closer.
Drain adds that it will be economic to deliver Wyoming wind hundreds of kilometres to California, even though the Transwest Express line is a high voltage DC line that requires costly AC-DC converters at each end. The lower cost of the actual DC wires and the more efficient transfer of power over long distances, with less transmission losses than AC lines, offsets the initial capital requirement, he says. Furthermore, over half of Wyoming is classified as having a class six wind resource - classes five through seven represent good wind speeds ranging 7.5-8.8 m/s at a height of 50 metres. "So I can take class five, six and seven and haul it all the way to California and deliver it at a cheaper price than they can connect their own wind," says Drain.
One transmission line definitely on its way in the west is the Populus-Terminal connection (map ref 8). The double circuit 345 kV line will run 219 kilometres, linking Idaho to energy hungry Salt Lake City in Utah. It is being built by Pacific Power and is due online next year.
California expansion
California will be served by new transmission capacity even sooner thanks to a $1.8 billion project by Southern California Edison. New wires are currently under construction along with substation upgrades (map ref 12), which will enable wind power generated in the Tehachapi Pass in southern California to meet the relatively local demand of the Los Angeles basin. It was a change of approach to how to get it financed that again led to the line finally being built.
Tehachapi Pass is a particularly windy area and at least some developers believe there is space for another 4.5 GW of wind generation. Lack of transmission capacity has been the only major stumbling block. With California wanting more and more clean power, local grid operators decided to adopt a similar approach to that used in the Open Season and CREZ plans by identifying whether or not there was a solid need for new transmission and if the costs could be justified.
With sufficient project developers proving their commercial ability to proceed, state and federal regulators approved the upfront funding of the new lines using public money. Consumers will pay some of the costs through increased electricity bills, while some of it will be recouped through transmission use fees. The expansion will accommodate 2600 MW of new wind when it is completed later this year.
Wires for the next 36 gigawatts
Transmission projects likely to be built and building
Transmission capacity online new wind
project (kv) Target Year (MW)
1 Juan de Fuca 500 2012 550
2 McNary-John Day 500 2012 1200
3 Walla Walla-McNary 235 2012 400
4 BPA Open Season varies varies 4716
5 Montana Alberta Tie 230 2010 600
6 Cap X 2020 345 2012-14 2275
7 Southwest Intertie 500 2011-13 1200
8 Populus-Terminal 345 2010 1600
9 Transwest Express 600 2013-14 2200
10 CO-WY Intertie 345 2012-13 900
11 Pawnee-Smoky Hill 345 2013 500
12 Tehachapi 500 2009 2600
13 Tallgrass/Prairie Wind 765 20135800 14
SPP balanced portfolio 345 2012-13 -
15 Northwest-Woodward 345 2010 1800
16 CREZ 345 2012-13 9859
Total 36,200
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