DOES BIG NEW ENERGY NEED BIG NEW TRANSMISSION?

There has been BIG news this week about BIG New Energy and BIG new transmission.

Solar power plant pioneer BrightSource Energy and megautility Southern California Edison closed a deal for a series of installations planned to reach 1300 megawatts of capacity in California’s Mojave Desert. They are describing it as “the world’s largest solar deal.”

Just a day before, the Joint Coordinated System Plan (JCSP ) was released by a group of the biggest Northeast and Midwest grid operators, confirming the need for major new U.S. power transmission.

The study describes an $80 billion high voltage system, constructed between now and 2024 that would serve as a “transmission superhighway” to carry enough wind-generated electricity in the resource-rich Midwest to population centers in the Midwest and Northeast to provide 20% of the entire region’s power needs. The study says that developing this capacity would cut the need for new coal in half and enhance the national grid’s reliability.

The JCSP is a landmark study. It details a system consisting of the newest in high tech capacity and coordinated through multiple transmission regions in a way rarely before done.

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The proposal was endorsed enthusiastically by the American Wind Energy Association (AWEA) and is expected to please environmentalist groups enthusiastic about new transmission as a means of expanding New Energy capacity and stopping the growth of the coal and nuclear industries.

Rob Gramlich, Policy Director, AWEA: “AWEA is pleased to see that yet another study has found that upgrading our power grid to put the nation’s wind energy resources to use saves consumers money, reduces greenhouse gas emissions, and makes the power grid more reliable…The study reinforces what we’ve been saying for some time: upgrading the power grid to access our nation’s world-class wind power resources is a win-win for consumers and the environment.”

At almost the same time, ITC Holding proposed the Green Power Express, a more modest $12 billion, 3,000 mile system to bring 12,000 megawatts of wind energy to population centers of the Upper Midwest.

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With the wind power industry fixed on realizing its goal of building the capacity to provide 20% of U.S. electricity by 2030, these new transmission systems appear timely.

In addition, planning for solar power plants is burgeoning. BrightSource Energy, already working on a 900-megawatt proposal for Northern California’s PG&E, now has the 1300-megawatt deal with Southern California Edison. San Diego Gas & Electric recently went to heroic lengths to get the Sunrise Powerlink, a new transmission system for a planned 900-megawatt Stirling Energy solar power plant. Stirling Energy has another 850-megawatt solar power plant deal with Southern California Edison. (See LANDMARK NEWS FOR SOLAR POWER PLANTS) And those are just some of the big California deals. There are also major solar power plant plans being made in Arizona and Nevada.

The BrightSource Energy technology.From 5293565 via YouTube.

More utilities are expected to leap at the opportunity in the newly available investment tax credit and buy into solar power plants to meet state Renewable Electricity Standard requirements. (See DECOUPLING WASTE FROM GREED... below) All this New Energy development activity suggests a coming need for transmission expansion to deliver the enormous solar resources of the Southwestern deserts and the enormous wind resources of the Midwestern Plains and Great Lakes to U.S. population centers.

Wind’s 20% scenario is calculated to cut greenhouse gas emissions 8%. More help is urgently needed from solar. Next on the list will be transmission to bring energy generated by waves, tides and currents from the nation’s oceans, rivers and lakes to nearby population centers.

So what could be wrong with the new enthusiasm for all the new wires, right?

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Carol Overland, a veteran regulatory attorney, has long fought on the front lines of the transmission and energy wars. She took time out from her passionate fight against CapX 2020, a proposed new, smaller scale transmission system in the Upper Midwest (see No CapX 2020 for more on this), to raise some important general questions about proposals like the ITC Green Power Express and big plans like those in the JCSP study.

Overland: “Today we're at a crossroads in energy, a transition point where the decisions we make, like electricity itself, are binary. What we choose will determine how we use electricity in the future. The first step is to carefully define "need." … Transmission doesn't produce electricity. It is passive infrastructure … At its worst, though, it's an enabler of dysfunctional energy planning and profit-driven projects that are against the public interest. Claims that we "need" transmission are end-stage conclusions of a many-step planning process that we as a society have not yet consciously begun.”

From a lifetime of work at keeping a cold eye on power producers and utilities, Overland made 8 points.

(1) The business of utilities is selling electricity. New transmission infrastructure means more opportunity for utilities to bring their electricity to market. Overland believes utilities routinely exaggerate the need for infrastructure so as to grow profit opportunity.

Overland's expertise here is invaluable. Oversight is needed on this.

(2) North American Electric Reliability Corporation (NERC), “overseer of all things transmission,” says there is enough transmission to meet local needs though it can be constrained.

Overland: “The confounding factor: NERC notes that the transmission grid is constrained in places and is not sufficient for market purposes…This is the crucial point: The divergence between traditional "local load-serving need" and the desire of utilities to beef up need claims, to build generation and transmission at ratepayer expense, in order play the market.”

Overland is right. The Midwest Independent System Operator (MISO) says there is a 46-year waiting list for projects to get online. Reportedly, there are thousands of megawatts of wind capacity now waiting to get on the MISO wires. The question, nevertheless, remains: What will bring local New Energy resources of all kinds into the national energy portfolio? If it is not a matter of transmission, what is it? And why do so many prominent New Energy advocates believe it IS a matter of transmission?

(3) Utilities overstate their "need." They describe it as “peak load” need. But "peak load" only happens a few times a year. Utilities then get excess transmission capacity that allows them to build profits by selling excess power from their systems the rest of the time.

Oversight and regulation are clearly needed.

(4) Overland says a review of recent blackouts shows they didn’t have anything to do with inadequate transmission and occurred at off-peak times when utilities overloaded lines with excess power they were marketing.

No doubt Overland has her facts right on this, but the big 2003 blackout was reportedly caused by a fallen tree branch and a system ripe for the resultant cascading shutdowns. Wouldn’t smarter, higher capacity lines be safer and more reliable?

(5) Overland reports that transmission line use is falling as a result of slowly improving efficiencies. She reports that the most reliable predictions say the falling usage trend will continue.

This point is hard to understand. No doubt line usage fluctuates. But how does low line usage square with long waiting lists to bring New Energy-generated power on line? The topic of transmission inevitably leads to highly technical questions and it may be Overland can readily explain this apparent contradiction.

There is a more important question going forward: Predictions suggest dramatically rising energy demand, despite the best efforts at efficiency. Is the present transmission system adequate to spread enormous regional New Energy resources nationally to meet rising demand?

(6) Federal regulations make it illegal for transmission systems to discriminate between types of generation so the idea that transmission is being built specifically for New Energy is, in Overland's words, “a lie.”

Overland: “…it's first come, first ready, first served…if renewable energy mandates were directly linked with shut down of fossil generation, and if renewable generators were thoughtfully sited, both the electricity market and transmission infrastructure would be open and available.”

In Europe, the EU is developing guidelines by which New Energy gets priority access for delivery on the wires. How practical is this idea? Is there a technical obstacle? Could a newer, smarter system eliminate the obstacle?

(7) Transmission built especially for long distances is also, according to Overland, “a lie.”

Overland: “Transmission physics entails high levels of line loss, and the longer the line, the higher the line loss…Line losses are charged in Federal Energy Regulatory Commission rates… an afterthought add-on to the customer's bill…Consider too the capital cost of transmission, starting at about $1.5 million per mile for 345kV lines…”

Overland makes no reference to the new, high voltage 765-kV lines that will make up the “transmission superhighway” planned by JPSC. These lines are touted to have much, much lower line losses, making the kind of long distance transmission of which solar power plant builders in the Southwest and big wind producers now moving into the Midwest and Great Lakes dream.

If claims about the 765-kV lines’ capabilities are untrue, there is a major fraud being perpetrated that must be exposed.

(8) Finally, Overland believes big plans such as ITC’s Green Power Express are merely ways for utilities to get more power up for sale.

Overland: “These plans are all market-based…Utility framing of this market-based, profit-based purpose as public purpose ‘need’ also serves as their basis for taking land through eminent domain, because a corporation's private purpose is expressly prohibited as justification for a taking…Will we fall for transmission lies? Is new transmission a public purpose, a public need…Or is it an industry grab for market opportunities and profits at the public's expense? …In my years of practice, I've yet to see a transmission line actually meant for the "need" proposed…”

Overland’s basic contention seems to be that new transmission is simply not needed.

The Utility Wind Integration Group (UWIG) was formed in 1989 to “accelerate the development and application of good engineering and operational practices supporting the appropriate integration of wind power into the electric system.” The group is an alliance of public and private groups, engineers, academics, transmission operators and wind industry professionals, who don’t agree with Overland.

Charlie Smith, Executive Director, Utility Wind Integration Group: "The consensus view is that wind power impacts can be managed with proper design and operation of the system. There is still a lot of work to be done to get the message across and get everyone up the learning curve, but we are well on the way." (See An Overview of Current Initiatives to Expand Transmission Infrastructure to accommodate Utility Interconnection and Integration of Wind Power)

Overland raises some really important points and identifies where oversights are needed as New Energy matures into BIG Energy, a process that appears to be turning into a juggernaut.

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An Ambitious Vision for Upscaling Wind Transmission
Matthew L. Wald, February 10, 2009 (NY Times)
and
Oakland's BrightSource Energy signs 'world's largest' solar deal with Southern California utility
Matt Nauman, February 11, 2009 (San Jose Mercury News)
and
A Solar Deal to Put Mirrors in the Mojave
Andrew C. Revkin, February 11, 2009 (NY Times)
and
Transmission lies; Against the so-called 'need' for new long-distance, high-voltage transmission lines
Carol A. Overland (w/electrical engineers Art Hughes, David Blecker, and Rick Gonzalez), 3 February 2009 (Grist)
and
AWEA Statement On Joint Coordinated System Plan (JCSP) Transmission Study
February 9, 2009 (American Wind Energy Association)
and
ITC’s Green Power Express Would Carry U.S. Wind Power
Tina Seeley, February 9, 2009 (Bloomberg News)

WHO
Charlie Smith, Executive Director, Utility Wind Integration Group; Carol A. Overland, veteran regulatory attorney and electrical consultant; American Wind Energy Association (Rob Gramlich, Policy Director); Joint Coordinated System Plan (JCSP ) developers (Midwest ISO (John Bear, President/CEO), SPP, PJM, TVA, MAPP, members of SERC and the New England and New York ISOs); Southern California Edison (SCE) (Vanessa McGrady, spokeswoman); BrightSource Energy (John Woolard, CEO); ITC Holdings Corp. (Joseph Welch, CEO)

WHAT
Expert after expert confirms that BIG New Energy – like the 1300-megawatt series of solar power plants announced by BrightSource and SCE or the wind industry’s plan to supply 20% of U.S. power by 2030 – needs BIG new transmission like that in the newly released Joint Coordinated System Plan (JCSP ) and like ITC’s proposed Green Power Express. One veteran attorney disagrees.

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WHEN
- Presently, it reportedly takes 46 years to connect to the Midwest Independent Transmission System Operator (MISO) grid.
- The JCSP system would not be completed until 2024.
- The Utility Wind Integration Group (UWIG) was formed in 1989.
- Except for regulatory approvals that could hold up ITC’s Green Power Express almost indefinitely, the company believes it could begin construction within 24 months, do it in phases and complete it in 3 years.
- AWEA will hold a national workshop on Wind Power Transmission on March 17 - 18, 2009, in Overland Park, KS. (Kansas Governor Kathleen Sebelius will be a keynote speaker.)
- The first of BrightSource Energy’s 100-megawatt arrays will begin construction later in 2009 and go online in 2013 if regulators approve. 6 more 200-megawatt solar power plants will follow.
- BrightSource is also working through the regulatory process for 900 megawatts of solar power for separate PG&E deal and expects construction to begin in the fall.

WHERE
- The JCSP study covered the United States east of the Rockies (except for Texas and Florida).
- ITC’s Green Power Express would deliver wind-generated electricity from the Upper Great Plains, cross portions of North and South Dakota, Minnesota, Iowa, Wisconsin, Illinois and Indiana and serve population centers of the Midwest such as Chicago.
- ITC is based in Novi, Michigan, and operates 15,000 miles of transmission lines.
- Overland’s expertise is in Minnesota and Delaware
- The first 100-megawatt mirror array is to be built in the Mojave Desert in southern California.
- Oakland's BrightSource Energy has a pilot plant in Israel in operation today.

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WHY
- The JCSP study found that the $80 billion transmission investment to enable wind to supply 20% of Eastern U.S. power would save consumers $12 billion/year, recover its cost in 7 years, dramatically cut GhGs and make the grid more reliable.
- The JCSP study did not consider economic and job benefits, The U.S. Department of Energy’s 20% Wind Energy by 2030 showed the 20% scenario will create 500,000+ jobs and generate $80 billion/year in economic activity.
- The JCSP Plan would entail 15,000 miles of new grid, acting like “a transmission interstate highway system” to deliver bulk power over long distances, downloading to localities via “local highways” and “surface streets” along the way.
- ITC describes its $12 billion Green Power Express as “the world’s largest renewable-energy transmission system.” It would entail ~3,000 miles of new lines and carry ~12,000 megawatts.
- ITC is requesting federal assistance for the multiple regulatory approvals its proposed transmission system requires.
- Southern California Edison is California’s biggest utility.
- California's RES requires its utilities to obtain 20% of their power from New Energy sources by 2010. SCE presently has 16%
- BrightSource Energy’s Luz Power Tower 550 solar power plant technology uses thousands of mirrors to reflect sunlight and concentrate the sun’s heat at a high central point where a liquid is heated and used to boil water that creates steam which drives a turbine that generates electricity.
BrightSource is seeking regulatory approval to build plants generating up to 900 megawatts worth of solar power for PG&E.
- Overland wisely points out the first, best use of energy is conserving it. She contends there is anywhere from 1.5-to-10% of energy needs that can immediately be eliminated by conservation and efficiency.

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QUOTES
- Rob Gramlich, Policy Director, AWEA: “A forward-looking investment in our nation’s power grid to access renewable energy is a powerful solution to the three largest challenges facing our country today: the economic downturn, decreasing energy security, and the urgent need to address climate change…We look forward to the Administration and Congress taking up national transmission policy this spring."
- John Bear, President/CEO, Midwest I.S.O.: “This is information we believe that our leaders need to consider as they begin work under a new administration and start defining our energy future…[JCSP] examined a small set of scenarios with limited variables,” it provides “a clear idea of the scale of commitment it would take to integrate large amounts of renewable resources into the grid.’’
- John Woolard, CEO, BrightSource Energy: "This proves the energy industry realizes the important role solar thermal will play…We know what it takes to get good projects funded…You demonstrate the technology and take the risk out."
- Overland: “ ‘Need’ is a term of art, and the crucial task for energy planners is to define the need. We need energy when we flick the switch, and when we do, that's a utility's need for service of local electrical load. We also need renewable generation, and we have an equally compelling need to reduce the CO2 emissions, pollutants, and toxic waste of electrical generation (a need not readily recognized in energy planning). Energy planners plan for peak "flick of the switch" need, those few very hot summer days or very cold winter nights. How much ‘flick of the switch’ energy do we need? It depends.”
- Joseph Welch, CEO, ITC Holdings: “What we really need is the federal government to start to make some needed rule changes or modifications…The wind we’re connecting in the Dakotas is some of the highest quality onshore wind development in the country…There is so much pent-up potential for wind generation in the Dakotas, everything is like race horses waiting to go…We don’t need studies, we don’t need the money to finance it…We need people to give us the change in rules and regulations that allow us to get it built.”
- Kevin Book, senior analyst, Friedman Billings Ramsey & Co.: “[ITC is] unlikely to get equity market buy-in on the basis of first-ever negotiations with the federal government…Investors are too conservative to pay a premium for future regulatory payouts.”