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ITC to build $12 billion in wind farm power lines, JCSP study finds $50+B savings from 20% wind

By Joe Romm on February 10, 2009 at 7:42 am

"ITC to build $12 billion in wind farm power lines, JCSP study finds $50+B savings from 20% wind"

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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.

ITC Holdings announced Monday 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.

ITC called the plan, depicted above, the Green Power Express, saying it could

result in a reduction of up to 34 million metric tons of carbon emissions, which is equivalent to the annual emissions of about seven to nine 600 MW coal plants.

ITC made its announcement the same day a major study, the Joint Coordinated System Plan (JCSP), was released by the Midwest grid operator and other U.S. regional grid managers was released. It concluded that to increase wind power to 20% of electricity production by 2024 (requiring some 230 GW of wind) would require some 15,000 miles of new transmission costing $80 billion. The total cost of the wind would be some $1 trillion.

The WSJ reports this as “New Grid for Renewable Energy Could Be Costly.” But in fact the study found that “increasing wind’s share to 20 percent of U.S. power production would yield annual net savings of $12 billion annually by 2024 based on wind’s low production cost compared to the fossil plants the turbines would replace,” as Energy Daily (subs. req’d) explained.

Moreover, JCSP projects that the 20% scenario would save 3 billion tons of carbon over the next 16 years, which would generate in 2024 an annual value of some $40 billion a year at carbon prices comparable to that which the European Union has seen over the past year — and several times that if the price of carbon to reaches levels needed to stabilize at 450 ppm.

One reason I say windpower has come of age is because the announcement and the study don’t come from your traditional pro-wind trade groups or think tanks. Far from it.

ITC is “the country’s only investor-owned, pure-play transmission company.” It says “it has lined up support from several wind generators and utilities along the route of the project.”

ITC’s biggest caveat is that “it will need certain regulatory assurances and incentives from the Federal Energy Regulatory Commission to make the project work financially.” This is a job for team Obama. They are definitely going to need Sue Tierney for Deputy Secretary, since she was executive director of the Massachusetts Energy Facilities Siting Council.

The JCSP is one of the most credible studies ever done, and it supports the Bush DOE report that said wind can be 20% of U.S. power by 2030 — with no breakthroughs. As reported by Transmission and Distribution World:

The study represents the collaborative efforts of Midwest ISO, Southwest Power Pool, Inc., PJM Interconnection, the Tennessee Valley Authority, Mid-Continent Area Power Pool (MAPP), and participants within SERC Reliability Corp. (SERC). Among the key features of the study are:

  • It used a collaborative, transparent, stakeholder process to develop and screen assumptions and postulate transmission expansion possibilities.
  • It used a common approach with system condition assumptions to characterize the majority of the Eastern Interconnection in a single multi- regional analysis, rather than conducting parallel, region-specific analyses.
  • It used study tools and databases that are in common use in the electric power industry.

One final point that Energy Daily notes:

Interestingly, the JCSP transmission study suggests it is not markedly cheaper to aim for a far more modest wind power goal– 5 percent of total generation in the Eastern Interconnection–than to go for 20 percent.

Expanding transmission to meet the 5 percent wind goal would cost $50 billion–as opposed to $80 billion to get all the way to 20 percent–says the study. New wind farms needed to hit 5 percent would cost $700 billion, the study says.

Certainly getting to 20% wind is no slam dunk. But the ITC announcement makes clear that the private sector is ready to make big investments now. And the JCSP study makes clear that the goal is not only attainable, but would bring with it big economic benefits and even bigger greenhouse gas benefits.

The ball is in the court of President Barack “We will double the production of alternative energy in the next three years” Obama.

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18 Responses to ITC to build $12 billion in wind farm power lines, JCSP study finds $50+B savings from 20% wind

  1. Wow…

    This is an amazing development!

    Might I also call your readers attention to this campaign against dirty energy from the Alberta Tar Sands… run by the EDF in Canada, Earthworks, and 14 other environmental groups.

    http://one-blue-marble.com/blog/?p=186

  2. Kojiro Vance says:

    Wow, a business plan to deliver 7 cents per kWh (not including transporation) intermittent wind into an 8 cents per kWh Illinois market.

    http://www.eia.doe.gov/cneaf/electricity/epa/fig7p4.html

    Nothing wrong with that business plan.

    OK, I’m being snarky. I’m not anti-wind, we just need to be realistic. The wind resources are in the midwest and Texas surrounded by some of the cheapest power in the country. That is a big problem that will limit the availability of wind.

    [JR: Yes, those are the climate-destroying electricity prices. I can't wait for the non-climate-destroying electricity prices.]

    Queensland

  3. Kojiro Vance says:

    I should have said the development of wind rather than availability.

    Even the American Wind Energy Association admits that 20-25% wind power is as high as you can go without causing grid stability issues. As local wind resources overwhelm local demand more transmission is needed. Unfortunately for wind, nearby big states like Illinois have cheap power, making it hard for wind to compete.

  4. Kojiro Vance says:

    Whoa – stop the presses, somebody REALLY important agrees with me:

    “Obama acknowledged that while the cost of producing electricity by wind and solar has declined, it is still cheaper to generate power from plants fueled by coal or natural gas.”

    http://www.reuters.com/article/environmentNews/idUSTRE51876P20090209

  5. caffeind says:

    Great article – do you know when the actual study will be released? All I see how is an executive summary.

  6. On one of the other posts, Kojiro touts Norway’s advanced work with carbon capture and sequestration, and he’s right. The Norwegians are expected to have the first commercial-size power plant using CCS at Mongstad which will capture 2.5 million metric tons of CO2 annually when it goes online in 2014.

    What he Korjiro didn’t mention is that Mongstad plant is expected to exceed the $25 – $110 per tonne CCS estimates of the IEA.

  7. John McCormick says:

    Caffeind,

    go to:

    http://www.jcspstudy.org/

    and link to the study materials link at the top. Lots of information on the formation of the plan.

    John McCormick

  8. max says:

    Has there been any study of how climate change will alter the locations and intensity of the wind resource itself-ie will windy areas get windier or less windy with climate change?

  9. kai says:

    This is all well and good, if it weren’t for the amount of incredible greenwashing that’s going on. North Dakota is home to lignite coal, which is wetter and heavier than other coal types, making it costly to transport. Therefore, most of it is burned on site and then transported as electricity. The Antelope Valley substation is surrounded by coal plants – with something like FIVE. Transmission is non-discriminatory, and if the interconnect is made to the Antelope Valley substation, more and more coal will be transported to the midwest. Joe, you’re usually pretty great at digging up these facts, but here you missed a big one.

  10. This is NOT needed, and it’s for coal. It starts at the Antelope Valley coal plants, as above, and ends in Illinois, WHERE THERE IS ALREADY OVER 10,000MW OF WIND IN THE MISO QUEUE!!! Here’s a post with more info, including a sortable MISO queue so you can see for yourself that there’s plenty of wind planned for Illinois: http://www.legalectric.org/weblog/2900/
    Here’s Matthew Wald’s recent piece on xmsn in NYT:
    http://www.legalectric.org/weblog/2863/
    As to need, see my post on Grist, Transmission Lies:
    http://www.legalectric.org/weblog/2836/
    See more on Midwest CapX 2020: http://www.nocapx2020.info

  11. Kojiro Vance says:

    Well at least we can agree that low CO2 power is going to be MORE expensive.

    [JR: Other than energy efficiency -- and only if by "MORE expensive" you mean in the narrow voodoo-economist sense where destroying our climate is not an expense -- and only for maybe a few more years, until Fossil fuel constraints and learning curves on renewable side causes their economic paths to cross.]

  12. ClaudeB says:

    Joe, you might want to check this joint answer from the CEOs of NYISO and New England ISO to the JCSP report. In a nutshell, they’re not happy about it, accusing their colleagues at MISO of greenwashing.

    We note that the report also assumes the development of new coal-fired generation in the Midwest without recognition of current and future restrictions on carbon emissions and their associated costs.

    Of course, the northeast has other options. They have 12,000 MW of wind in their regional queues and they contemplate buying some more hydro and wind from Hydro-Qu├ębec — an extra 4,000 MW low emission capacity is in construction and scheduled to be commissioned there between 2011 and 2015.

  13. John says:

    I’m curious to see if someone has addressed how these wind farm developments would respond if global wind patterns were to change course due to climate change. And what impact this would have if the united sates does eventually become much more dependent on wind generated energy.

  14. ClaudeB says:

    John: I’m certainly not a climate scientist, but the expected lifespan of windmills is 20-30 years. You have to keep that in mind.

    The really scary part of climate change (the gradual increase in temperature and its long term consequences on ice, oceans, etc) happens in a longer timeframe, so I don’t think there is a valid concern there for wind farms we build today.

    However, hydro dams are a different story, since they typically last for a century and more.

  15. Bob Wallace says:

    The individual turbine might be used up in 20-30 years, but the infrastructure will be very usable. Just stick a newer, better turbine on top of the tower and keep pumping out all that cheap energy.

    Just because a locomotive wears out does not mean that we have to install new track on new right of way and build new stations.

    Adkins and Jacobson’s 2008 study show that 20% is not the maximum wind that can be incorporated and be 100% reliable. The number that we should be using is 35%. Add in a couple hours storage and the number skyrockets.

    As for wind farm and local climate change – there does seem to be some localized soil drying underneath the turbine. If you think that there might be more of an effect than that I suspect you’ve never visited the Great Plains.

    If it was ever possible to build enough farms to drop the wind intensity in the Great Plains I really doubt that the locals would complain.

  16. Kojiro Vance says:

    Again, Joe and I agree. If properly priced for carbon emissions, fossil fuel power prices will rise as renewable generation prices fall. But the cost of carbon capture and storage will also fall as they achieve both economies of scale AND the learning curve effect. Retail electric prices will go up moderately, I’m guessing we go from a national average price of 9 cents/kWh to 13, about where retail prices in Texas are. With a mix of more gas, more wind, less but more efficient coal, and about the same amount of nuclear power.

    The Wall Street Journal covered the MISO transmission story nicely:

    http://online.wsj.com/article/SB123414242155761829.html

    ‘The purpose of the study was “to make clear that if you need large sums of energy that’s not carbon-based, these are the kinds of numbers involved” to achieve it, said Clair Moeller, head of transmission planning for the Midwest Independent System Operator.’

    But Mr. Moeller goes on to point out the fly in the ointment:

    ‘The projected cost of the system is only one hurdle. Getting the high-voltage power lines build across the country would require the assent of local authorities and landowners, and might require federal intervention. “For that 15,000 miles of lines, I promise about 15,000 lawsuits,” said Mr. Moeller.’

    The environmental “reject everything” crowd – who are partly responsible for making global warming WORSE by killing more efficient coal fired power plants, has erected a project killing machine of unnecessary regulations and lawsuits.

    It is this energy project killing machine that will turn on the environmentalists and begin eating the very projects that they hope to save the earth from global warming.

    You can almost taste the irony.

    [JR: Nice try. Enviros have tried to stop coal plants from expanding emissions illegally. This absurd notion that environmentalists have been killing off more efficient coal plants is pure disinformational talking points from the coal industry.]

  17. Kojiro Vance says:

    Nice example of liberals eating their own here. American Apparel, an LA inner city clothing company with all the right “progressive” values can’t open a 3rd store in an area of San Francisco with vacant store fronts and high unemployment:

    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/09/EDCL15OVLG.DTL&hw=caille+american+apparel&sn=001&sc=1000

    BS! – I assume you mean that environmentalists objected to new coal expanced under provisions of the CAA that allowed for incremental capacity additions.

    So you are saying that the environmentalists WOULDN’T object to new coal fired power if they had been filed as new permits??? So what alternative reality do you live in?

    Environmentalists have rejected EVERY coal fired power plant. (Even those committed to CCS.) The truth is that had some of these more efficient plants been built they would have become sunk costs. In the dispatch order the higher efficient plants will get run BEFORE the dirtier plants. Therefore, less global warming pollution.

    Big Stone 1 & 2 are a great example. BS 2 installs pollution control equipment that makes both plants together pollute less than BS 1 on its own. BS2 is 20% more efficient on its own. Once BS2 is built, as wind power expands BS1 can be shut down.

    Don’t build BS2 and BS1 continues to pollute and operate inefficiently for years to come.

    [JR: You seem to live in a world without the reality of catastrophic global warming on our current emissions path. As such, I'm not certain why you are posting comments here. There ain't no "pollution control equipment that makes both plants together pollute less than BS 1 on its own."

    Your "check is in the mail" [Once BS2 is built, as wind power expands BS1 can be shut down.] nonsense is laughable.

    Environmentalists got suckered by the coal industry which promised two decades ago that if only you could grandfather some of their coal plants so they could finish paying off, then they would be shut down. So it is absurd for the coal industry to keep those plants running forever AND tried to expand capacity. It was the coal industry that broke the deal.

    Yes, we don’t need new polluting plants. There Is no such thing as a coal plant “committed to CCS.” Ya gotta stop peddling industry talking points because I’m not going to keep wasting time debunking them.]

  18. paulm says:

    Coming out of Spain 3rd largest wind power gen country…

    Stormy weather probably due to GW is contributing to higher power generation ration of wind in the mix than previously envisiaged!