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Transmission for 20% Wind Would Save Consumers $12B Annually: Study

Feb 13, 2008 - Wind Energy Weekly

An investment in the power grid to enable wind to supply 20% of the electricity needs of the eastern U.S. would save consumers $12 billion annually, recovering capital costs in as little as seven years while reducing greenhouse gas emissions and making the power grid more reliable, according to a study released this week.

The Joint Coordinated System Plan (JCSP) study found that the wind resources brought online by the upgraded transmission network would reduce carbon dioxide emissions in the Eastern U.S. by almost 3 billion tons per year—savings that would potentially be worth tens of billions of dollars under a carbon tax or cap-and-trade system.

“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,” said AWEA Policy Director Rob Gramlich. “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.”

The study also found that the need for new coal-fired, baseload power plants would be cut in half under the wind and transmission scenario—dispelling the outdated assumption that renewable energy cannot reduce the need for such power. Moreover, the reliability of the power grid would be enhanced, reducing the likelihood of events like the August 2003 blackout that cost consumers and businesses billions of dollars, the study concluded.

In that regard, it is generally agreed that a renewed investment in transmission is needed regardless of the need to accommodate new wind energy. The JCSP study, in fact, found that the cost of transmission needed under a scenario of only 5% wind energy penetration is still $50 billion. Thus, given the significant economic and environmental benefits of accessing the world-class wind resources that are currently trapped in the middle of the country, making a slightly larger initial investment in the nation’s power grid to tap those resources would pay for itself many times over, wind energy advocates pointed out.

Although the study did not calculate job creation or economic development benefits of the wind and transmission scenario, other studies like the U.S. Department of Energy’s “20% Wind Energy by 2030” report have shown that obtaining 20% of the nation’s electricity from wind power would create over 500,000 jobs and generate $80 billion per year in economic activity.

“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,” said Gramlich. "We look forward to the administration and Congress taking up national transmission policy this spring."

The report was prepared by a host of system operators and reliability organizations covering a wide chunk of the U.S., including the Midwest Independent System Operator, SERC Reliability Region, PJM Interconnection LLC, the Southwest Power Pool, the Mid-Continent Area Power Pool and the Tennessee Valley Authority.

Transmission has been a hot topic of late, with several announcements coming this week (see related stories). Also released this week was a report from the Lawrence Berkeley National Laboratory today released a new report: “The Cost of Transmission for Wind Energy: A Review of Transmission Planning Studies.”

In addition, AWEA will hold a national workshop on Wind Power Transmission on March 17 - 18 in Overland Park, Kans. Kansas Governor Kathleen Sebelius will be a keynote speaker, and the workshop will address the full range of transmission issues, from interconnection queue logjams to proposals for national transmission policy. For more information, go to http://www.awea.org/events/transmission09/.