Zond wind turbines rise up among a young corn crop at the Buffalo Ridge wind farm in SW Minnesota.

Making Way for Wind Power

This article was originally published by the New York Times Editorial Board on April 5, 2016. 

If the United States is going to get serious about cutting carbon emissions from oil and gas, it will have to find ways to scale up its use of renewable energy. Converting wind and solar power into electricity is, in some ways, the easy part. The bigger challenge is developing the infrastructure to transmit that electricity across the country.

In the case of wind, most of that power is generated far from the urban centers that would use it. Transmission would require a new nationwide system of power lines reaching from the windiest parts of the country. Such a system could also allow power suppliers the flexibility to shift supply depending on variations in weather.

Russ Pisciotta is opposed to installing power lines on his farm in Missouri. Credit: Christopher Smith for The New York Times

But some residents in those areas don’t want power lines crossing their property. One project, called the Grain Belt Express and intended to run from Kansas to Illinois, is on hold after being voted down by the Missouri Public Service Commission. There was considerable opposition from landowners, who worried the lines would be unsightly or interfere with farming. Some area residents also objected to the idea of companies building on Missourians’ land in order to sell power elsewhere.

Transmission lines are generally safe, but they would change the appearance of open space in the West and the Midwest. In some cases, lines can be placed underground. But underground lines are far more expensive to construct and maintain than aboveground lines, and lower costs would translate into lower electricity rates for consumers. Lower rates could also speed the nation’s transition from gas-powered cars to hybrid and electric vehicles, further reducing emissions.

Clean Line Energy Partners, the company behind the Grain Belt Express, plans to submit a new application to the Missouri Public Service Commission later this year. The company recently won approval from the Department of Energy for transmission lines stretching from Oklahoma to Tennessee. Clean Line will pay landowners the full market value for easements of land it builds on, plus an annual payment for each structure it builds on their property.

To bring landowners on board, companies will have to pay good prices and be sensitive to local concerns, involving communities early in the planning process. But the country won’t be able to make a swift transition to renewable energy if landowners and local regulators stand in the way.

Zond wind turbines rise up among a young corn crop at the Buffalo Ridge wind farm in SW Minnesota.

The main reason wind energy output appears lower in 2015? 2014 was a record high wind year

This article was originally published on September 2, 2015 on the AWEA Blog and written by Michael Googin

2014 saw record high wind output in the U.S., most notably when wind energy provided large amounts of extremely valuable power that helped keep the lights on during extreme cold in January 2014. However, the downside of 2014’s record high output is that it makes 2015 wind output appear to be drastically lower. Several recent news articles have used the comparison against 2014 output to build the narrative that 2015 wind output has been concerningly low.

While the first half of 2015 has seen below average wind speeds, a more meaningful comparison against a longer-term average shows 2015 wind output to be within the normal bounds of inter-annual wind output variation. Moreover, several months of below average wind output are not a reason for concern, as they fall within the band that grid operators and power plant investors expect because many sources of energy experience variability in fuel supply.

The EIA data in the table below show that the first six months of 2014 and 2015 both depart from the more typical wind output in 2013, with 2014 being a few percentage points higher and 2015 a few percentage points lower. Moreover, each datapoint covers only a narrow six month period, and the anomalies seen during those periods were offset by more normal levels of wind output during the latter six months of the year, as shown in the chart further below and as one would expect due to the statistical principle of regression toward the mean.

Time Period First Half 2013 1H 2014 1H 2015
Wind fleet capacity factor 36% 38% 33%

With that full context provided, it is clear that a few percentage point difference in wind output over a few months is not a reason for concern. However, if one focuses solely on the change from 1H 2014 to 1H 2015, as several recent articles have done, then one can get the mistaken impression that the wind output seen during the first few months of 2015 is a cause for concern.

The green line in the chart below shows that the wind resource was extremely high in 2014, significantly higher than any other year in the last 15 years. Even 2013 fell in the top four wind resource years over the last 15 years, so 2015’s wind output would look even less unusual if it were compared to a more typical year than 2013 in the table above.

sample-wide capacity

The following chart shows that the average capacity factor for the first half of 2015 is still higher than that seen in the first halves of 2007, 2009, and 2010, based on an estimate calculated from EIA capacity and January-June generation data for all U.S. wind projects. In addition, total wind energy production in the first half of 2015 is higher than that seen in the first half of any year except 2014.

johnchart

Inter-annual variations in wind output are not a concern, as variability in fuel supply affects nearly all sources of energy. Last year one-third of Midwest coal plants had their fuel supplies curtailed due to railroad constraints, while natural gas pipelines experience congestion or even supply shortages. Natural gas prices have varied by a factor of five over the last 10 years due to fluctuations in supply and demand, resulting in large fluctuations in electricity prices and consumer costs. In contrast, wind plants have no fuel costs, so utilities that diversify their fuel mix with stably-priced wind protect their consumers from electricity price volatility. In addition, all power plants experience failures from time to time, which are a far larger cost for grid operators than the gradual and predictable changes in wind energy output. As another example, the hydropower resource varies more from year to year than the wind resource, yet the Pacific Northwest has successfully relied on hydropower to provide the majority of its electricity for several generations.

The main reason why the United States built an interstate power system 100 years ago was so that a large number of power plants and sources of electricity demand, each of which is inherently unreliable, could be combined to make a reliable power system.

A strong transmission system plays a key role in accommodating the fluctuations in the availability and price of all fuels. For example, transmission lines like the Pacific DC Intertie in the Western U.S. allow wind and hydropower to be delivered from the Pacific Northwest to California when output is high in the Northwest, while the line can flow in reverse when hydropower, wind, and solar generation is high in California and total generation supply is low in the Pacific Northwest.

AWEA Manager of Industry Data and Analysis John Hensley contributed to the analysis included in this post.

August 9, 2013 - Trask Bradbury (on nacelle) and Pete Johnson of Gemini Rope Access Solutions, inspect the blades of a 3MW Alstom wind turbine by repelling down the blades.  The turbine is undergoing testing at NREL's National Wind Technology Center (NWTC) in Boulder, Colorado.  (Photo by Dennis Schroeder / NREL)

Wind Energy Is Having a Railroad Moment

This article was originally published in SLATE and written by Daniel Gross. 

One of the raps on big renewable energy projects, such as solar plants and wind farms, is that they rely on federal subsidies and tax credits to get off the ground. That’s obvious. Here’s something less obvious: Taxpayers may have subsidized the boom in emissions-free energy, but that’s triggered a whole lot of unsubsidized private investment in turn. Someone has to pay to build the infrastructure that conveys the power from the empty places where it’s produced to the populated places where it’s consumed.

This is particularly evident in wind energy. Developers needs the federal production tax credit—2.3 cents for every kilowatt-hour produced by a wind farm for 10 years after its construction—to justify the nine-figure investments to plant clusters of turbines in the plains. But just as oil needs pipelines and coal needs railroads, wind power needs transmission lines to reach cities. A report by the Edison Electric Institute, a trade group for investor-owned utilities, highlighting some $47.9 billion worth of transmission lines in the works through 2025, found that about $22.1 billion in funds will be spent on transmission projects aimed at integrating renewable energy into the grid.

And there could be much more to come. In Houston, the global capital of the fossil fuel industry, a startup, Clean Line Energy, is aiming to replicate the feats of 19th-century railroad barons, erecting audacious, expensive tracks that will turn farmland and fallow space into economically useful terrain. The company wants to spend about $10 billion in private capital to wire the plains with direct current electricity wire. The names of its proposed lines evoke the age of the iron horse: There’s the Rock Island Clean Line, which would ferry juice 500 miles from Iowa to Illinois; the Grain Belt Express, traversing 780 miles from Kansas to points east; and the Plains & Eastern, which would convey power from the windy Oklahoma panhandle to Memphis, Tennessee. (Here’s a map of Clean Line’s proposedprojects.) Farther to the west, billionaire Philip Anschutz is plotting the TransWest Express, a 730-mile line from Wyoming to Las Vegas. That effort, along with Clean Line’s Plains & Eastern—both of which could get federal approval to proceed this year—“may be the two most ambitious transmission lines ever built in this country,” says Michael Skelly, president of Clean Line Energy. (The Pacific Intertie, which connects Oregon hydropower to Southern California, is actually longer than both of these proposed lines.)

Skelly has some experience tilting at windmills. He was chief development officer of Horizon Wind Energy, a Texas-based development firm bought by  Goldman Sachs in 2005. (In 2008, in another quixotic quest, he ran for Congress in Texas’ deep-red 7thdistrict as a Democrat and lost.) The wind industry boomed in Texas in part because the state, which has its own grid, pushed through a plan that enabled the construction of massive wind farms in the western and northern parts of the state, encouraging about $6 billion in new transmission lines to bring the power to population centers.

Outside of Texas, however, the electricity grid is highly balkanized. Utilities in Oklahoma aren’t particularly interested in figuring out how to convey wind power from the Oklahoma panhandle (where it could be produced in massive quantities) to Atlanta (where it would be consumed in massive quantities). And the federal government has long since gotten out of the business of backing big interstate power highways. (The last major electricity interstate highway it supported was the Pacific Intertie, completed in 1970.) That means a large chunk of America’s wind resources remains stranded.

In 2009, Skelly helped found Clean Line, which has raised more than $100 million in capital from investors including National Grid. The idea: build a series of long-haul transmission lines—400-, 500-, 700-miles long—and rent capacity to wind developers so they can send their power to market. (Rule of thumb: It costs about .3 cents to send a kilowatt-hour of power 100 miles.)

It sounds like a simple business model. But as pipeline builders have found (hello, Keystone XL!), building energy infrastructure that crosses several state lines requires negotiating a maze of state regulators, federal authorities, and private landowners. And for a host of reasons—economic, political, regulatory, environmental—people aren’t always psyched about big projects coming through their proverbial backyards. For example, while Indiana and Kansas have given approval to the Grain Belt Express, which would connect Dodge City, Kansas, to southern Indiana, Missouri has said no. (In certain circumstances, transmission developers can appeal such denials to the federal government, which Clean Line has done.) “A wise person said that anything worth doing takes a decade,” said Skelly. “And we are going to prove them right. We haven’t done this before in this country. We haven’t built four-state transmission lines.”

Skelly is confident that Clean Line can raise the $10 billion needed to build its five proposed lines and that construction could start as early as 2017 if approvals start to come through.

Clean Line’s ambitions highlight the complexities of the arguments surrounding energy subsidies. Yes, Clean Line’s customers—developers of wind plants—rely on subsidies. And those subsidies cost real money. According to the Energy Information Administration wind accounted for 4.4 percent of U.S. electricity production in 2014, or about 180 billion kilowatt-hours. Assuming every one of those kilowatt-hours is eligible for the 2.3 cents per kilowatt-hour (and they’re not—wind farms more than 10 years old can’t get the credit, for example), the production tax credit would amount to a maximum of about $4.2 billion year.

The American Wind Energy Association argues that every form of energy production is subsidized to a degree and that the U.S. is getting a lot in return for whatever subsidy wind receives. The burgeoning wind industry has accounted for some $100 billion of investment since 2008 (a period in which the U.S. suffered a big shortfall in investment), created tens of thousands of permanent jobs, and stimulated the creation of a domestic manufacturing sector. It also funnels $195 million a year in lease payments to farmers, ranchers, and other landowners.

But as Clean Line’s ambitious plans show, the wind boom has also inspired people and businesses to do something they didn’t do much before 2008—think big and funnel private capital into infrastructure projects. And when private firms erect new platforms that encourage other private companies to invest and build, that’s a form of economic stimulus worthy of a few lofty railroad metaphors.

Cross-post: How new transmission will bring Wyoming wind to California

This piece was originally posted in Utility Dive on September 10, 2014, written by Herman K. Trabish.

The national energy mix is changing and new transmission is helping make it all possible.

Utilities from National Grid to Arizona Public Service are proposing renewables projects made increasingly practical and cost effective by affordable and flexible U.S. natural gas supplies. Only new transmission lines are necessary to deliver high capacity solar and wind resources to load centers that need them.

As Texas Governor, former President George Bush said he spurred his administration to get the state’s now U.S.-leading wind industry started and then turned to “bottlenecks to getting wind to the marketplace.” The groundwork was laid for new transmission lines that now deliver over 12,000 megawatts of remote wind power to electricity-hungry Texas cities.

Progress on transmission across the rest of the West, however, has been delayed by jurisdictional and permitting complications.

The implications are global. “The country that harnesses the power of clean, renewable energy will lead the 21st century,” President Obama said last year while signing an executive memorandum that focused the Federal Rapid Response Team for Transmission (RRTT) on seven crucial projects.

“Our project was designated for RRTT attention,” Transwest Express Director of Communications Kara Choquette told Utility Dive.

The Transwest Express — a $3 billion, 3,000 megawatt capacity, 725 mile high voltage direct current (HVDC) line — would carry Wyoming winds with a capacity factor well over 40% along a route through Utah, Colorado, and Nevada. Interconnections in Utah and at the Hoover Dam could take wind-generated electricity as far as Los Angeles.

The Transwest Express route

The hurdles to building transmission

Aimed at streamlining Federal agencies’ permitting, review and consultation procedures, the RRTT was created in 2009 to resolve the kind of delays the Transwest Express faces.

“RRTT has maintained our progress. I don’t know if it has made it faster,” Choquette said. “Where we are today speaks for itself. The original right of way application was filed with the [Bureau of Land Management] in 2007. The final Environmental Impact Study (EIS) should be published by the end of this year. Seven years of permitting. It just takes a long time.”

It was easier and faster in Milford, Utah, where a DC transmission line runs through, carrying the Intermountain Power Plant‘s coal-generated electricity to Los Angeles. Few people came to the public meeting held there to introduce the Transwest Express, Choquette recalled. “When I asked about the lack of interest, one of them pointed out the window, ‘You’re just going to build another one of those. OK. We know what that is.’”

Wherever possible, the Transwest Express was routed along existing transmission lines, highways, or railroads, Choquette said. But Federal agencies like the Bureau of Land Management (BLM), the Bureau of Reclamation, and the Western Area Power Administration (WAPA) are required by the National Environmental Policy Act (NEPA) to consider “a reasonable range of alternatives.”

Along one section of the route, Choquette said, a delay was caused because BLM picked an alternative to Transwest’s proposal. Officials for three separate counties, two in Wyoming and one in Colorado, filed a joint resolution withthe BLM in support of Transwest’s original route. The BLM has reportedly decided, finally, to defer to their preference.

At the most densely populated section of the route in Henderson, Nevada, homeowners came to meetings prepared to vigorously resist a proposed two mile wide corridor that, on maps, looked like it encroached on their properties.

“People thought we wanted the entire corridor,” Choquette said. “Once homeowners realized the route would be inside the corridor on the far side of other existing transmission lines, they were fine with the project.”

Streamlining the process

The National Environmental Policy Act (NEPA) process “serves an important purpose,” American Wind Energy Association Senior Counsel Gene Grace told Utility Dive. “But there are some reforms that could streamline the process without sacrificing its goals.”

A crucial fix, Choquette believes, would be establishing a deadline. “Permitting drives the whole development process,” she said. “Our strategy is to de-risk the project for investors by getting it to a higher level of permitting certainty. But making the financial commitment to do all the detailed and expensive planning is riskier when there is no certainty of a fully determined route.”

Wildlife also presents uncertainties. “The rules change,” Choquette said. “When we started, there were no sage grouse corridors in Wyoming. Then they were there in 2009.”

The state of Wyoming has been proactive in wildlife protections, she added. “They realized they needed to both encourage energy infrastructure and protect the best habitat. So they created a transmission corridor next to existing lines and infrastructure. The BLM incorporated Wyoming’s strategy into its sage grouse protection plan.”

Like the Hoover Dam, which went online in 1936 and was “the original renewables project,” Choquette said, “we want to make sure this is done in the right place in the right way from the beginning.”

Not for the faint of heart or wallet

Lines like the Transwest Express were conceived as a way to get great renewable resources to where load was growing and state mandates required them, explained Exeter Associates Principal Kevin Porter, who does transmission research for Lawrence Berkeley National Labs.

But today load is no longer growing and states have met their interim mandates. “Things are pretty tough for transmission right now,” Porter said. “The Wyoming wind resource is very good but may not be good enough to support the expense.”

These projects, Choquette said, quoting a Wyoming official, “are not for the faint of heart or the faint of wallet. You persist because it is needed.”

Wyoming wind could save billions of dollars for California

By sourcing a portion of California power from Wyoming wind, “annual generator cost-savings range from around $500 million to around $1 billion,” Choquette said, citing NREL’s California-Wyoming Grid Integration Study. Over a 50 year transmission lifespan, that is billions for California.

While a cost-benefit ratio of 1.1 or 1.2 typically justifies spending for new transmission, Choquette said, the Transwest Express’ ratio would be at least 1.62, according to the NREL study. Factoring in various avoided costs, it could reach a 3.6 cost-benefit ratio.

“These transmission systems are valuable for delivering remote resources that can’t be supplied in any other way,” former Federal Energy Regulatory Commission Chair Jon Wellinghoff told Utility Dive. “The other great thing about them is that, like new subway lines, businesses grow up along them. If you put in these lines, they provide the opportunity for people to site remote central station solar systems and look for nearby wind resource areas.”

Cross-post: What happened to that national high voltage transmission system?

This is a cross-post of an article written on 9/2/14 by Herman K. Trabish in Utility Dive.

Once-bold calls for national high-capacity transmission to harvest abundant but remote U.S. wind, solar, and geothermal resources are now a distant whisper. But some developers are still pioneering upgrades for a fragile, somewhat balkanized electricity delivery system.

“You can’t get enough clean energy from distributed resources,” said former Federal Energy Regulatory Commission (FERC) chairman and staunch distributed energy resources (DERs) advocate Jon Wellinghoff. “If you run the numbers, you find out we need these clean remote resources and transmission lines to get them to the load.”

When DERs are interconnected to central transmission, the whole system becomes “more robust and more reliable,” Wellinghoff said recently in calling for an independent distribution system operator to streamline DER delivery. “Given the energy requirements of this country, we have to have both.”

Calls for a national high voltage direct current (HVDC) transmission system began with the renewables expansion in 2006. But barriers were quickly identified.

 

One of the first was that “nobody was in charge,” Wellinghoff said. FERC has authority to site interstate natural gas pipelines but very limited authority to site transmission lines. Local authorities at the state, county, municipal, and even tribal council level become involved. “No one is responsible for figuring out how to get the project done.”

The 157 mile Roseland-Susquehanna line from Pennsylvania to New Jersey was stopped by one national park administrator’s objection to the replacement, on an existing two-mile right-of-way, of a 230 kV line with a 500 kV line, Wellinghoff recalled. Completion was delayed over six years, until $60 million in mitigation funds got the administrator to remit.

In 2006, Wellinghoff proposed to Congress that if local jurisdiction failed, authority should fall to FERC after a year. “But it never went anywhere,” he said.

Clean Line Energy in the heartland

Clean Line Energy Partners (CLEP) is working on five lines “to connect the best resources in the country with load centers that don’t have access to them,” President Michael Skelly explained. “It is a very simple idea. The execution is quite complex. For five years, we have been going at it brick by brick, county by county, landowner by landowner, state by state.”

Funded by National Grid and ZBI Investors, CLEP is developing four HVDC lines and one AC line. “With luck, we will break ground in the next couple of years. The Plains & Eastern (P&E) line to deliver Oklahoma wind to the Southeast is the best candidate.”

 

Skelly’s team faces landowners, environmental groups, county officials, and state regulators as they work up a preliminary route. “By the time you are done studying possible routes, you have thousands of locations on a map that you want to stay away from.” After public feedback, a “refined route” must be permitted by state regulators.

“A state commission can take over a year to decide if the benefits of the project outweigh the downside,” Skelly said. “Opponents file legal briefs, we respond, and there is a blizzard of paper. But you can’t rush public stakeholders. We are methodical. We work within the constraints of the process.”

CLEP stresses the local benefits of its projects, such as suppliers with factories along their lines’ routes that create jobs. To satisfy landowners, CLEP pays 100% value up front as well as making annual per-power payments. And the team never stops communicating “what we are doing and why it is necessary,” Skelly said. “You can never communicate with enough people but we communicate with as many as we can.”

The best response to local resistance is local support, Skelly said. Randolph County, Mo. Presiding Commissioner Susan Carter emphasized one CLEP project’s property taxes and jobs to state regulators and called for Randolph County “to be a part of America’s clean energy grid.” Cindy O’Laughlin and husband, owners of a Ready Mix concrete and trucking company, publicly championed the P&E line’s jobs. And Vicki McCune, director of a non-profit serving the Oklahoma Panhandle and bordering states, organized a “green letter writing campaign” to help the P&E line get public utility status.

“Talk to people. Find champions. That is Chapter One of the playbook,” Skelly said. Tell your story. Answer all questions. Talk benefits. Correct misinformation.

Are there fixes?

The federal government could streamline the process, Skelly said. The DOE is considering the controversial use of its eminent domain power for both the P&E line andthe Transwest Express line that would deliver Wyoming wind to Las Vegas and Southern California.

“There is not clear consensus on infrastructure now and big changes in the relationship between the states and the federal government are unlikely,” Skelly said. “We are working with existing authority, whether it is federal, state, or local. We are not in the policy making business. We are just trying to get our projects done.”

The energy content of Oklahoma wind is 3.4 times that of wind in the Southeast. That will make the harvest and delivery of it cost effective, Skelly believes. Power producers will pay for the line to carry their electricity at a return to CLEP investors, Skelly said, of “around $0.02 per kilowatt-hour.”

“They will be competitive market disruptors,” said Exeter Associates Principal Kevin Porter, who does transmission research for Lawrence Berkeley National Labs. “The line will be the highway that delivers lower cost electricity and they will charge a toll to use it. But it is a very big capital expenditure with a fair amount of risk.”

 

Several factors are imposing delays and “considerable uncertainty” in transmission right now, Porter explained. The biggest is depressed load growth, a hangover from the recession. “Most of these lines were based on electricity demand growth. The need now for new lines is almost non-existent.”

The growth of distributed generation, low cost natural gas, state energy efficiency initiatives, and fulfilled state mandates are also dampening demand.

The on-again, off-again federal production tax credit (PTC) adds to uncertainty. “The Bonneville Power Authority’s “open season” procedures put 4,200 megawatts of new transmission capacity into construction from 2009 to 2011, when the PTC was set, Porter said. “In the last two years, with PTC uncertainty, BPA hasn’t had an open season. There was no demand.”

Despite the determination of CLEP and the TransWest builders, Porter doesn’t “see big multi-state projects happening in the near future.” Only if something big happens, like a commitment to fighting climate change, will transmission building stop “treading water,” Porter said.

The increasing impacts of climate change and new EPA rules will put much more pressure on getting clean resources, Wellinghoff said. “People will have to understand transmission lines are necessary, in conjunction with distributed resources.”

Transmission Lines to Transport Texas Wind Power to Other States

This post was contributed by Stephanie Dula, Community Manager at SaveOnEnergy.

June 10, 2014

For more than a century, Texas has practically had its own energy infrastructure. In fact, it’s the only state that has its own power grid, the Texas Interconnected System. The rest of the country shares power resources on two different power grids, the Eastern and Western Interconnections.

But it appears that’s soon going to change. A new transmission line was recently approved by the Federal Energy Regulatory Commission that will enable Texas to easily share its energy resources with states in the Southeast.

The transmission line, which was proposed by California-based company Pattern Energy will have the capacity to transport 3,000 megawatts of renewable energy from North Texas wind farms to Louisiana and Mississippi. The Southern Cross project, as it’s called, will span about 400 miles, beginning just north of Dallas.

Pattern Energy expects the transmission line to be up and running by 2019.

Why Texas?

Texas is making serious headway in the wind energy industry. Already, the state has more wind energy installed than any other state—12,300 megawatts worth. The next closest state is California, and it only has 5,800 megawatts of installed wind energy capacity.

And the state is quickly spinning up new wind farms and solar arrays. According to the Electric Reliability Council of Texas, renewable energy grew 12 percent in 2013.

Texas has already had success implementing a similar transmission line project. At the end of 2013, the state completed a $7 billion transmission line, stretching across 3,600 miles of the Lone Star State. The lines will allow Texas to move as much as 18,500 megawatts of renewable energy from its windiest areas, such as West Texas, to the rest of the state.

Although it’s only been operational for less than a year, the new transmission line project in Texas has helped spur the growth of wind energy even further. ERCOT has already signed interconnection agreements for about 9,000 megawatts worth of renewable energy, 7,000 of which is expected to come on line by 2016.

So far, all of the renewable wind energy is sold through power purchase agreements to utilities or energy providers in Texas’ energy deregulated regions. But Pattern Energy believes there’s a big opportunity to sell the clean energy to companies in other states. Once the Southern Cross project is completed, Pattern Energy will use its affiliate, Pattern Power Marketing, to purchase renewable energy in Texas and then sell it to states in the Southeast.

While it may seem like a great deal for other states, Texas is probably benefitting the most. Electricity will flow both ways on the transmission line. When the state’s energy infrastructure is constrained, it will be able to quickly access the power it needs to prevent blackouts.

There’s a financial benefit too. The new transmission line is expected to cost about $2 billion, boosting the Texas economy with jobs and money. It’s also likely to spur renewable growth in Texas even further, as new companies look to invest and capitalize on Texas’ thriving wind energy industry.

The Polar Vortex and the Power Grid: What really happened and why the grid will remain reliable without soon-to-retire coal plants

This piece is cross-posted from The Sustainable FERC Project’s blog.

Apr 29, 2014

by John Moore and Allison Clements

In the grip of the “Polar Vortex,” much of the nation experienced an extremely cold winter. The good news is that despite record electricity demand and some of the coldest weather in 20 years, power companies and grid operators kept the lights and heat on. Yet some observers are now claiming that this past winter’s experience casts doubt on whether the power system can cope without the aging coal-fired power plants that are slated to retire over the next couple of years in the face of competitive pressures.

Fortunately, the nation’s major grid operators – the entities charged with maintaining the power grid’s reliability and keeping the lights on – disagree. This fact sheet explains what happened on the grid during the Polar Vortex and clears up misconceptions about what the experience means for both future extreme weather conditions and implementation of the US EPA’s carbon pollution standards.

Q: It’s been reported that many old coal plants that are slated to retire next year were needed during this winter’s extreme cold snaps. For example, American Electric Power (AEP), one of the country’s largest power companies, reported that 89% of its coal plants scheduled for retirement ran during the Polar Vortex. Why did so many old coal plants run this winter?

Old coal plants ran so heavily because an unusual number of other plants were out of service during the Polar Vortex for a variety of exceptional weather-related reasons that are being fixed going forward. Coal plants slated for retirement won’t be needed when these exceptional outage problems are fixed.

Most of the plants that were out of service were unavailable because of operational and mechanical problems like frozen coal stockpiles, boiler tube failures, and faulty ignition. Some plants, for example, failed to start up in the extreme cold after being off line for months. (By the end of January, when we experienced another extreme cold spell, more plants had recovered and were running normally.) Grid operators are now working on corrective measures to avoid these surprises, including requiring plants to test and verify their operational capability during the cold winter months. These tests include a “weekend check” requirement to assure that plants won’t have trouble starting up again after a prolonged break. Grid operators are also evaluating additional financial incentives to reward plant operators that deliver higher performance levels.

Cold weather conditions also revealed problems with natural gas procurement practices, even though sufficient gas supply was available throughout the period. In addition, a glitch in the power and gas markets kept some gas-fired generators from obtaining sufficient fuel on high-demand days – power markets in some regions declare their next-day needs too late in the day for gas markets to respond. The Federal Energy Regulatory Commission (FERC) and the grid operators responsible for maintaining a reliable electric grid are working to fix this problem before next winter.

RTOs, ISOsQ: So, in light of the stresses during this winter’s Polar Vortex, aren’t these retiring coal plants really needed next year?

Not according to PJM, the nation’s largest grid operator with more than 180,000 megawatts (MW) of power plant capacity throughout the Mid-Atlantic and Midwest. Like other regional grid operators, one of PJM’s core responsibilities is to ensure through future planning that sufficient power generation, transmission lines, and other grid resources will be available to maintain reliability and keep the lights on. After a thorough assessment of reliability concerns, PJM has determined that all nine of the soon-to-retire AEP plants in its region (accounting for about 5,400 MW of capacity), plus thousands of megawatts’ worth of other power plants can cease operations without causing any grid reliability problems. Reflecting on the Polar Vortex in April, PJM informed FERC that it will have more than enough power to meet reliability needs after accounting for all planned retirements from companies across the region.

PJM secures necessary power supplies through an annual auction that runs three years into the future. As a result, PJM has determined that its needs through 2017 will be met by existing coal, gas, and nuclear power plants supplemented by nearly 19,000 MW of new power generation, energy efficiency resources, and power imports from neighboring regions of the country, plus over 12,000 MW of “demand response.”[1] The combination of resources will more than offset the approximately 15,000 MW in expected regional coal plant retirements, leaving PJM with about 20 percent more capacity available than needed to meet projected demand.

Q: What about other regions? For example, I’ve heard that the grid operator Midcontinent Independent System Operator (MISO) is worried about insufficient power capacity in the future – is that true?

MISO operates the grid in all or part of 15 states in the Midwest and South. On April 15, MISO reported to FERC that it has more than enough power capacity and demand response resources to meet this summer’s and next winter’s projected demand. Similar to PJM, new plants, energy efficiency investments, and other measures are replacing plants slated for retirement. Looking ahead to winter 2015/2016 and through the end of 2016, MISO and its participating states believe that the region is very close to meeting its power supply requirements. MISO’s analysis is ongoing, and more power may be available from the southern part of MISO (Arkansas, Mississippi, Texas, and Louisiana), which has extra capacity, and from imports from the neighboring RTO, the Southwest Power Pool.

Q: How can we be sure the grid will stay reliable in cold weather conditions after upcoming compliance deadlines arrive for new environmental protection standards?

Grid operators are planning to meet their capacity needs (including during hot and cold snaps) taking new environmental rules into account, including for example US EPA’s Mercury and Air Toxics Standards (MATS). Acknowledging that a variety of factors – not the least of which is low-cost natural gas – create the potential for additional coal plant retirements and that work needs to be done to address fuel supply issues, none of the grid operators has told FERC or Congress it supports a delay of the MATS standard or of the forthcoming carbon pollution standards. In fact, some of the operators have commented that it does not make economic sense to pour money into retrofitting and retaining older, less reliable plants, because that diverts investments away from newer and more reliable plants.

Q: Can we be sure the coordination issues between natural gas markets and power markets will be fixed?

FERC and the grid operators started addressing these issues before the Polar Vortex began, and they have opened related rulemaking procedures in all relevant regions. Planned changes include better coordination of the daily natural gas and electricity markets to make sure that gas can be delivered when needed, and changes to make it easier for gas-fired plants to run on oil during any gas supply shortages that do occur. This dual-fuel capability helped many plants in New England to operate successfully in January and February (although burning oil instead of gas increases pollution and should be viewed only as a remedy of last resort).

Q: Did wind power help or hurt during the Polar Vortex?

Wind power contributed to the grid’s reliability during this winter’s cold weather. In Texas and the Mid-Atlantic/Midwest, wind energy supplied thousands of megawatts of power during critical times, helping to temper some price spikes and avoid blackouts. The California Independent System Operator, which operates most of California’s grid, told FERC at an early-April meeting on cold weather operations that “renewables helped to get us through the winter.” Likewise, the New England ISO recently told the House Energy & Commerce Committee that renewable energy resources “were an important part of the energy mix” during the past winter. As wind power continues to expand throughout the country, it is becoming more valuable to grid operators during periods of winter peak demand. Throughout the various cold snaps in New York, the nearly 1,400 MW of wind in the NYISO market performed very well, contributing low cost emissions free power during high demand.

Q: How did energy conservation help during the cold weather? Did utilities force people to cut back on home heating during the Polar Vortex?

Energy efficiency and demand response programs[2] helped the grid get through this winter, but no customers were ordered to cut back. Manufacturers, businesses, and other large customers in the Mid-Atlantic and Northeast regions responded to demand response financial incentives by voluntarily reducing peak electricity use to the tune of 3,000 MW during the Polar Vortex. As the New England ISO recently reported, demand response resources “performed well and were a valuable part of maintaining reliability during the winter season.” All regions are now evaluating ways to expand the amount of demand response available to meet winter peak demand needs.

Q: Are all these retirements going to cause sticker shock in coming electric bills?

There’s no getting around the fact that we use more power when it’s extra cold. So it’s no surprise that power bills went up during this extreme winter. It is also true that high gas demand led to temporary regional gas price spikes, which translated to higher energy prices for short periods during the extreme cold. Though the peak prices paid by utilities were high, the final cost felt by consumers was tempered by the fact that these high prices were temporary and some retail rate structures shield residential consumers from these costs.  Going forward, FERC and grid operators are now working to reduce gas price spikes through better market rules and other solutions. Also, gas prices are lower overall on an annual basis than in the past.

Q: How can energy efficiency and renewable power help meet peak power needs and keep bills down?

The cold weather events highlight the important role that energy efficiency can play in meeting peak power needs and holding down bills. Grid operators in the Mid-Atlantic (PJM) and Northeast (ISO-NE) have used efficiency in their electricity markets to reduce electricity needs by several thousand megawatts. Unlike coal and natural gas plants, energy efficiency performs well in all weather conditions while costing less than half as much as building new generation. Renewable energy offers zero-cost fuel no matter the weather – and some renewable resources perform at very high levels during the winter months when gas supply is under the most pressure. Expanding these resources is the best way to meet our energy needs – both on an every-day basis and in winter and summer extremes.

You can find more information on how grid operators plan for higher-than-expected electricity demand here.



[1] See PJM, 2016/2017 RPM Base Residual Auction Results, at 1. Demand response programs allow industrial, commercial, and even residential customers to enter contracts to cut their electricity use for short periods in exchange for a bonus payment, if the grid operator determines there is too much demand at a particular time. Demand response programs contributed to grid stability during the Polar Vortex.

[2] See note 1, above.

New Michigan Study Supports Increasing Renewable Energy Mandate

A new study from the Michigan Energy Office and Public Service Commission—ordered by Governor Rick Snyder—shows the state can triple its renewable portfolio standard, achieving 30% renewables in the state’s portfolio by 2035. Michigan’s two key utilities – DTE Energy and Consumers Energy– are on track to meet the current 10% renewable target next year. Governor Snyder also ordered similar reports on energy efficiency programs, electric choice and “additional areas.”

The report points to improvements in wind turbines’ efficiency and cost-competitiveness as the key factors in the ability to meet 30%. Additionally, the report cites Michigan’s inclusion in PJM and MISO markets as ameliorating reliability and price volatility concerns. Access to the broader market – both to buy and sell renewable energy – and long-term power contracts mean Michigan’s consumers are able to capitalize on cheap, clean energy without worrying about the intermittency of renewable resources.

Indeed, because wind energy is proving to be so cost-competitive in the regional markets, DTE and Consumers have slashed their monthly surcharges for renewables by 85% and 79%, respectively. The report notes that additional transmission infrastructure could help “facilitate the introduction of wind power where it might not otherwise” have been feasible, and points to the recent development of transmission lines in the “Michigan Thumb.”

As we at Americans for a Clean Energy Grid have identified in our PJM and MISO studies, expanded transmission can help drive even further savings for customers in the region. Because wind has zero fuel costs, its inclusion in wholesale energy markets reduces energy prices across the region by kicking out more expensive generation on the margin. This “price-suppression effect” creates savings that are passed along to consumers. Our studies showed that the average MISO household can save approximately $150 a year by doubling the amount of wind in the market. In PJM, the region can save $7 billion annually in 2026 by doubling the states’ renewable portfolio standards. In both studies, the savings are net savings – after paying for significant investments in high-voltage transmission to deliver renewable energy from strong resource regions to population centers.

The Michigan findings follow on the heels of the Public Utility Commission of Ohio’s report that its state renewable portfolio standard could save customers nearly $30 million in 2014. It is the latest in a growing realization that a clean energy future is an affordable energy future. State mandates are creating jobs, lowering energy bills, and protecting the climate. Michigan’s study shows increasing renewable energy in the state is technically and economically attractive. Hopefully the states policymakers will see the writing on the wall and move to enhance the state’s renewable portfolio standard.