The study is the first attempt to quantify the cost of building a transmission system to accommodate the nation's expanding renewable energy goals. Although the study was started in November 2007, its release comes at a time when the proposed stimulus package before Congress includes $4.5 billion to upgrade the nation's electricity grid.
"We're trying to get our hands around, hypothetically, what would the grid have to look like to accommodate renewable portfolio standards?" said Jay Caspary, director of transmission development at the Southwest Power Pool, which handles transmission issues for utilities in Louisiana and nearby states.
Twenty-eight states have mandatory renewable portfolio standards setting up schedules for when utilities are required to produce or purchase a certain portion of their electricity from renewable energy sources, according to the Pew Center on Global Climate Change. Louisiana is considering whether to adopt a renewable portfolio standard. President Barack Obama has also floated the idea of a mandatory national standard for renewable energy.
Since one of the most promising sources of renewable energy is from wind power from the Plains states and Southwest, regional organizations that manage transmission lines east of the Rocky Mountains looked at what it would cost to build the electricity highways necessary to deliver wind power to population centers as a proxy for all other types of renewable energy.
The joint coordinated system plan looked at what transmission lines are necessary to serve the renewable portfolio standards that were in place in January 2008 so that 5 percent of electricity would be generated from renewable sources. It found that about 10,000 miles of new extra-high-voltage lines would be needed by 2024 at a cost of about $50 billion. That figure doesn't include the cost of investing $700 billion in facilities to generate renewable power.
At the urging of the federal Department of Energy, the regional transmission organizations also looked at what transmission investments would be necessary if the region increased its renewable power goals to 20 percent of electricity generated. They found that 15,000 miles of new extra-high-voltage lines costing $80 billion would be needed by 2024. Generating 20 percent of the electricity for the eastern power grid from renewable sources would require an additional $1.1 trillion in infrastructure investment.
While the transmission costs may sound expensive, Caspary said the transmission investment pales in comparison to investments in facilities to generate electricity. Investing in transmission is prudent, he said, because greater capacity in the system enables utilities to extend their range of where they can purchase the cheapest or most environmentally friendly electricity, stimulating competition.
"It's a lot of money for transmission, but you need to put it in perspective," Caspary said. "The transmission investment is very small compared with the generation investment, but it can benefit markets and competition."
Regardless of what happens to the notion of a renewable portfolio standard in Louisiana, Emily Pennel, a spokeswoman for the Southwest Power Pool, which is based in Arkansas, says wind power is coming. The Southwest Power Pool alone has proposals of wind farms that aim to produce 51 gigawatts of power, more than the maximum amount of power demand on the system in summer 2007 of 43 gigawatts.
Most of those wind projects for the Southwest Power Pool would be in western Oklahoma, Kansas, Nebraska, the Texas panhandle and eastern New Mexico. The group has not received any applications for wind projects interested in hooking up to the grid in Louisiana, Caspary said, but the state would gain by importing wind power from other states. The joint coordinated system plan, for example, sketches out lines for wind power to be transmitted from Oklahoma into Baton Rouge and New Orleans.
Any potential for wind power in Louisiana is thought to be offshore, but how much potential exists is a matter of debate.
Entergy Corp. does not think offshore wind power is promising because turbines would require laying underwater transmission lines and the windmills could be destroyed by hurricanes.
Herman J. Schellstede, chief executive of the New Iberia company Wind Energy System Technologies LLC, which plans to open a wind farm in early 2011 on a 11,355-acre lease seven miles off the coast of Galveston, Texas, says Entergy's concerns are "ridiculous."
After collecting 19 months of wind data, Schellstede said WEST will be ready to install its first turbine this spring. By the end of the year, he hopes to have orders for 62 platforms of turbines.
Schellstede, who was busy talking with investors at a wind conference in San Diego last week, said his company has filed two applications to build wind farms off the coast of Louisiana: one at Port Fouchon and one off of Venice. He hasn't yet heard back from the state.
"No action has been taken," he said.
Caspary said the study didn't look at building transmission offshore as a variable, because the group didn't have good data for assessing that possibility.
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