Huge ‘Green Power Express’ wind grid gains federal rate incentives

Wind power is coming of age as the U.S. becomes the global wind leader and probably the biggest source of new jobs in the energy industry.  I previously wrote about ITC Holdings’ plans to build a $10 to $12 billion power transmission network to move 12,000 megawatts of electricity from the Dakotas, Minnesota and Iowa to the Chicago area (see here, click on figure to enlarge).

Now this network has received a huge regulatory boost The Federal Energy Regulatory Commission (FERC), as Energy Daily reports:

Turning aside concerns from several state regulators and utilities across the Midwest, FERC announced Monday it has approved all of the rate incentives requested by ITC Holdings Corp. for its massive Green Power Express transmission project, providing a solid financial underpinning for the 3,000-mile line meant to deliver wind power from the Dakotas to Chicago.

The unanimous order by the Federal Energy Regulatory Commission means ITC affiliate Green Power Express LP can earn a relatively comfortable 12.38 percent return on equity (ROE) for the high-voltage line, which has a planned capacity of 12,000 megawatts.

FERC’s action also provides other key financial protections for the proposed line, including giving Green Power the right to bill ratepayers for development costs even if it has to abandon the project for reasons beyond its control.

The Green Power rate requests are not unusual, and in fact are similar to those requested of FERC by other utilities proposing major new interstate power lines that qualify for rate incentives authorized by Congress to expand the nation’s electricity grid.

But FERC’s decision Friday is important because it significantly improves the odds that Green Power””the largest new power line planned in the country””will get built…

FERC’s order is also notable because it was unanimous. In past transmission rate cases, Commissioner Suedeen Kelly and new FERC Chairman Jon Wellinghoff frequently parted ways with the commission’s three Republicans, saying the GOP commissioners were too generous in doling out higher rates for projects that were not big or important enough to the grid to deserve them.

Wellinghoff is a key player in enabling the smart, green grid (see “Another key climate and clean energy pick by Obama: Wellinghoff for Energy Commission Chief“).  Here is his comment on the decision, from Greenwire (subs. req’d):

“Meeting our nation’s energy goals will require developing extra-high voltage transmissions infrastructure that is needed to bring clean, renewable energy from areas where it is produced most efficiently to areas where most of our nation’s power is consumed,” Wellinghoff said in a statement. “The commission is examining the adequacy of transmission planning processes and is committed to working with transmission providers and state and regional entities to provide consumers with greater access to renewable resources.”

Even with this FERC action, the plan has a long way to go:

Even with the new rate approvals, however, Green Power has significant hurdles yet to cross. ITC itself has said that it thinks the project will not be approved under the existing U.S. system for siting interstate transmission projects because states and local utilities can block them too easily.

Instead, ITC says that larger-scope planning processes must be started to recognize the region-wide benefits of large transmission projects, and that the federal government should have more authority to trump states on siting decisions, under certain situations.

Congress is currently mulling several bills that would move in that direction in order to expand the U.S. high-voltage power grid to help deliver renewable power from remote locations to high-demand centers.

Again, it is urgent that Congress pass energy and transmission legislation this year — another reason to split the current energy and bill the House is considering into two bills.

Still, this is a big step forward — kudos to FERC!

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10 Responses to Huge ‘Green Power Express’ wind grid gains federal rate incentives

  1. hapa says:

    wind needs grid smoothing and grid storage to grow into the shoes of fossil fuels. these grids people are building, are they more mathematically-complex as IV drips? even without a federal policy, we should be able to set some standard that has in it the capacity to stabilize wind-power voltage through crafty routing.

  2. hapa says:

    oops: “as” should be “than”

  3. The FERC does not have the authority to override parochial obstacles and environmental hold-ups. Its decision is without practical effect. Congress needs to create a new agency (apart from DOE) which has strong eminent domain authority and is not subject to extortionate threats of delay by local politicians and environmentalists. Building out and modernizing the capacity and transmission lines of an integrated national grid will take a vigorous exercise of the Commerce Clause by Congress and the President. It was done with the federal highway system and the FCC, and the time has come for a national power policy.

  4. Andy Gunther says:

    My understanding of the Green Power Express is that at one of the nodes is a mine-mouth coal plant with the room to build several more. Anybody know about anything in this decision that would force the Green Power Express to carry only green power?

  5. David B. Benson says:

    hapa — The electric power grid has no storage capacity, none at all.

  6. Mike Hord says:

    David B.- I think hapa’s point was that some sort of storage needs to be added to the grid to make wind viable. At least that’s my hope.

  7. David B. Benson says:

    Mike Hord — Either storage or backup is required. Various ideas are being floated; an obvious choice in Montana is a pumped hydro facility.

  8. Doug says:

    David B., Mike — the concept of “grid storage” is not one of literally storing the energy; it’s that the averaging effect of combining many consumers and producers into one big pool allows you to effectively “store” energy by selling into the grid when you have a surplus.

    Usually it applies to home PV setups — instead of buying a massive block of batteries to store excess power in the day and use it overnight yourself, you just “store” it on the gird — sell your surplus during the day, then buy it “back” at night. This works nicely given that overall demand is usually much higher during the day.

    For wind power, perhaps the term “buffering” would be better than “storage”, as the effect needed is to have many geographically-dispersed turbines available to the same pool of consumers. If set up correctly, odds are nearly certain that there will be enough wind blowing somewhere among the turbines to provide for the power needs at any given moment.

    Of course, then, some actual storage might still be desired, to bring the reliability from 98% or 99% up to fully 100%, while dropping the traditional CO2-producing “baseload” sources down to zero. Fortunately, the transition should be gradual (e.g. natural gas will remain acceptable for a while to replace coal, and it’s production can be fully controlled and easily adjusted), so there will be enough time for the population of car batteries to grow to fill this need — provided these new “green” grids are truly smart grids that can communicate price signals to/from the cars.

  9. Neil Howes says:

    David B,
    Minnesota, Wisconsin and Iowa all have hydro electric power that can even-out some of the variability of wind. N Dakota is also lined to Manitoba’s very large hydro dams on Winnipeg and Nelson rivers.

    This green gird is covering an area about 10 times larger than Denmark, so the variability should be much less.

  10. Wind storage could also be in the form of cracking energy for CO2 and SO2 emitted by coal-fired power plants. When there is abundant wind (at night) the stored CO2 from coal combustion (or IGCC) would be electrolytically dissociated (cracked), forming O2 (for improved gasification or combustion) and solid carbon and sulfur. Otherwise the wind energy would just go to waste. The electrolysis products of CO2 and SO2 become, effectively, means for wind energy storage. Carbon and oxygen recycling makes more sense than underground storage (sequestration).

    Post-combustion coal CO2 capture and conversion is an urgent problem because in the next decade China will be adding 800,000 MW of coal power — 250% of the present coal-fired power plants in the US. Coal combustion is the largest source of CO2.

    Co-sited concentrating solar and natural gas are now being discussed and the marriage of coal and wind might be next.