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Dave Englander July 25, 2008 6 Comments

Wind Power Waiting on Transmission-Line Boom

Transmission lines are becoming the single-largest obstacle to the continuing growth of U.S. wind power. But some investors, such as T. Boone Pickens, view the barrier as an equally large opportunity.

When T. Boone Pickens, the Texan oil tycoon, announced plans to build the largest wind farm in the country, he faced one big problem. There were no transmission lines connecting his site to the rest of the electricity grid. Pickens’ solution: He would build them himself.

This highlights the main issue facing the growth of centralized wind power. You can’t have power without the power lines.

According to Ed Legge, a spokesman for the Edison Electric Institute, an association of public electric companies, it’s the old question of whether the chicken or the egg comes first. “Do you build the bridge first or the source?” he said.

Wind is alluring because it’s the cheapest green energy to produce, and it is far less expensive than solar power, for example. The United States this year has overtaken Germany as the world’s No. 1 wind-power producer, according to the American Wind Energy Association, and the sector has the potential to grow far larger. The U.S. Department of Energy forecasts wind power could reach 20 percent of the nation’s power supply by 2030, up from about 1 percent today.

But wind developers – some not as well capitalized as Pickens – are wary of building wind farms where there are no transmission lines, even if that’s also where the most wind blows. They fear their investment will dry up with no lines to deliver the power. And make no mistake: Transmission lines are expensive.

The DOE estimates that reaching 20 percent wind power will cost $60 billion in new wind-power transmission by 2030. But that cost spells an attractive opportunity for deep-pocketed entrepreneurs like Pickens.

The need for new grid infrastructure is by no means a new discussion. For the last twenty years, the nationwide power grid has suffered from chronic underinvestment. A DOE study notes that the annual investment in transmission lines had fallen from $5.5 billion in the early 1970s to below $3 billion in the 1990s. In fact, in 1998, utilities spent less than half of what they did in 1975.

Over this same time period, the country’s generating capacity has steadily increased, adding to the distressed grid’s troubles.

Deregulation is partially to blame. In deregulated markets, utilities are required to share their transmission lines to promote competition. But in this system, they have little financial incentive to maintain and build more lines. Profits increase the longer the equipment is in use, discouraging updates and repairs. In particular, public utilities, who must answer to shareholders, have a difficult time justifying building new lines. After all, the utility is no longer the sole beneficiary of the investment.

These issues have created a grid system that is outdated and – in some cases – falling apart. Power outages have become commonplace, and they’re expensive. The largest blackout in North American history, in August 2003, affected some 50 million people in Canada and the United States and resulted in damages of about $6 billion.

Wanted: Total Grid Overhaul

It will take a building boom in new lines to add a significant amount of wind to the grid.

For one thing, with wind power, there’s the issue of distance. Developers like Pickens – who chose remote West Texas as his wind site – are looking at locations increasingly off the grid to harness the strongest wind.

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Comments [6]

  • Jim Burrows 11/13/08 3:54 PM

    In initiating a solar powered camp in the semi remote woods of the foot hills of the Adirondack Mountains I’m a firm beleiver that renewable energy can work. Looking at a huge project of renwing power to the grid by means of green souces is ultimate in keeping the way we live our life styles. But small substations behind everyones house seems more a reality to me. I believe after watching the thieves of this land rape the money foundation of the United States it’s time for the American worker/people to take charge and incorporate our own electricity. Even if this country went to fully renewable power and the big guy’s still own it, we the people that built this country through learning and hard work will not pay less for utilities. But if unconnected from the grid we can control our own destiny’s. Instead of dumping 700 billion in something that will make smart investers very fat let’s dump that money into households so all of America can spend money again at places besides Walmart and lead imbedded chinese toys. I’ve read and listened to some of Pickens comentary’s. He’s on the right track and as an ivestor I would like to know who will be doing the work so I can get in on the ground floor and become rich myself. But, If we just looked at the education we have in front of us on our computers we can all have FREE power at our house’s. Will it be free with Pickins plan?

    Reply
  • adam moritz 07/25/08 10:15 AM

    Imagine the amount of distributed renewable energy generation that could be purchased with those billions of dollars.  No habitat destruction or violation of property owners’ rights would be necessary.  Think of the energy needed to manufacture, transport and put in place all the aluminum, steel and concrete—not just for the transmission lines themselves but the substations as well.  Think of the renewable energy turned into waste heat from transmission line impedance and substation losses.  Think of the labor involved in building and maintaining all of this.  New transmission lines are completely unnecessary in the presence of abundant solutions such as negawatts through green building, distributed renewables with smart grids, waste heat recycling and small-scale cogeneration. 

    By the way, Pickens’ plan for sucking water from the already over-taxed ogallala aquifer and pumping it to Dallas (a town without a clue about real water efficiency) is as much of a disaster as the transmission lines.

    He could get accomplish more renewable generation and more water distribution in a much more ecologically sound, socially equitable and profitable manner by investing in distributed renewables and rainwater catchment infrastructure WITHIN Dallas and other Texas cities.  The paradigm of centralized production and distribution of natural resources needs to be shrunk to a fraction of its size if there is to be real and lasting peace in this world.

     Reply
  • Jim White 07/26/08 5:06 AM

    greensolutions - Talk to thousands of your neighbors and see how many of them are willing to invest thousands of dollars in distributed energy sources.  Remember, T Boone Pickens nor anyone else will be paying for it.  Are you and your neighbors willing to make this investment?  What are the sources for the distributed generation?  Gasoline??  Unreliable wind or solar??  Your idea will never happen without a major technological breakthrough.  So, the real question is how do we survive for the next few decades?  I say thanks to Mr Pickens for helping out us all!

     Reply
  • Michael Powes 07/27/08 10:40 AM

    There is a new world wide web emerging right before our eyes. It is a global energy network and, like the internet, it will change our culture, society and how we do business.  More importantly, it will alter how we use, transform and exchange energy.
     
    Enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world’s energy needs for a full year. There is no energy supply problem, there is an energy distribution problem—and the emerging solution is a new world wide web of electricity.

    For more information, see http://www.terrawatts.com

     Reply

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