Will Politics Slow the Wind?

Not many years ago, there wasn't enough wind power coming from the Great Plains to worry about. Now there is, and lots of people are worrying.

A group of mostly East Coast utility companies calling itself the Coalition for Fair Transmission Policy fears that the prime conditions in the Great Plains will make the region's wind power too cheap for its members to compete with, unless developers there are made to pay the costs of moving wind power eastward.

Influential natural gas producers and generators in Texas are worried. They are demanding that the state's wind developers share the costs of backup natural gas generators that must pick up the slack when the wind doesn't blow. The gas industry, threatened by state policies that promote wind power, is asking regulators to impose penalties on wind generators that can't deliver scheduled energy when the wind dies down.

And last week, four senators representing New York, Ohio, Montana and Pennsylvania proposed to deny federal clean energy grants to wind developers that buy blades, turbines and other components from abroad.

"It is a no-brainer that stimulus funds should only go to projects that create jobs in the United States rather than overseas," Sen. Charles Schumer (D-N.Y.) said, pointing at a proposed Texas wind farm whose backers include a Chinese power company.

Some renewable policy advocates say the problem has less to do with China and more with on-and-off-again federal energy policies, and arguments over how to pay for the vast expansion of transmission lines needed to maximize wind power delivery. Instead of looking at foreign rivals, members of Congress should start with a look in the mirror, says this side in the debate.

"We've had so many studies," said Lisa Barton, vice president for transportation strategy and business development at Columbus, Ohio-based American Electric Power, a strong proponent of grid expansion. "It's 2010, and yet we still don't have a decision on how to move forward in connecting wind or in building a more robust transmission system."

How 'American' should the jobs be?

The issue of allocating costs for new transmission lines among states and regions is one of the high hurdles ahead for the Senate, if it can get climate and energy legislation to the floor this spring. The debate pits utilities and power generators in the North, Southwest and Pacific Northwest against companies like AEP that hope to move large amounts of competing wind power to the coasts.

Wind power development poses "a perceived threat to the embedded generators," said David Corbus, senior engineer with the Energy Department's National Renewable Energy Laboratory. "They color it in different ways. But when you come down to it, that's the bottom line on a lot of these issues." Corbus was project manager for the NREL's recently released 14-month study of wind power.

"You can't ignore the interests of the folks involved in the debate," Barton said.

Schumer and his three Democratic colleagues, Sherrod Brown of Ohio, Bob Casey of Pennsylvania and Jon Tester of Montana, say new wind power projects receiving federal stimulus grants should use U.S. manufacturing -- some of which lies in their backyards.

"Companies located in New York, Pennsylvania, and elsewhere across the United States are fully capable of manufacturing the range of clean-energy components," they said in a letter last week to Treasury Secretary Tim Geithner.

Citing an American University study that reported foreign dominance of renewable energy grants, they proposed a moratorium on wind power grants from Treasury until the Senate can pass their "Buy America" legislation.

The American Wind Energy Association, backed by Energy Secretary Steven Chu, disputes the facts and conclusions by American University's Investigative Reporting Workshop. The wind industry employs 85,000 people, AWEA said. "In three years, we went from two turbine manufacturers with facilities in the U.S. to nine, and four more have announced plans for factories here," it added. The AU study did not count foreign-owned clean energy manufacturing employment in the United States as "American" jobs, the association said.

"You do not want to stop these projects if two-thirds is American and one-third is foreign," Chu said on Friday.

'Wind is getting curtailed'

AWEA executives say that policy delay is the real threat to the U.S. competitive position. After strong expansion of wind power in the past two years, orders for the future are jeopardized by low natural gas prices, the recession's impact and transmission bottlenecks. If the U.S. wind sector plateaus, it risks losing technological leadership to European and Chinese rivals, AWEA says.

The current transmission system is too crowded already to deliver the wind power that exists today, Corbus notes. "It's a shame for wind [generation] to be curtailed, and that's happening. Wind is getting curtailed all over the place."

The American Council on Renewable Energy (ACORE) also has opposed the senators' proposal, arguing in a letter to Geithner, "We submit that the very reason the United States is falling behind the rest of the world is because the Congress has created on-again, off-again public policy regarding renewable energy."

The National Renewable Energy Laboratory recently concluded that 38 U.S. states have the potential to generate at least 1,000 gigawatts of electricity from onshore wind power, in an updated analysis on its "Wind Powering America" site. These include Midwestern states like Michigan, parts of New York abutting the Great Lakes, and eastern Maine.

Eastern and Great Lakes states may decide that it's worth paying a little more in order to build their own wind projects, creating local jobs and boosting their tax base, said Ralph Izzo, chairman and CEOs of PSEG, the large New Jersey utility.

"I'd like a shot at developing a project," he said. His company is one of 10 in the newly formed Coalition for Fair Transmission Policy, headed by Atlanta-based Southern Co., whose region has among the poorest onshore wind power potential in the country.

The NREL wind integration study headed by Corbus concludes, however, that the most economical wind resources -- even when transmission costs are factored in -- are in the Great Plains. Izzo and other members of the fair transmission coalition disagree.

Uncertainty is biggest barrier, industry officials say

Reaching a goal of 20 percent wind generation in 2024 would require construction of 10 inter-regional high-voltage lines spanning a total of nearly 22,700 miles, at a cost of $93 billion. Such an ambitious goal won't be achieved under a business-as-usual approach, the study concluded.

"It's super important because of all the jobs that will be launched," said Corbus. "If you don't have the transmission, you don't have the wind going in, and you're going to have jobs lost."

NREL also studied another option, in which aggressive wind development offshore and along the Great Lakes halves the number of long-distance transmission lines needed to maximize wind power delivery.

It's not clear whether a state-by-state approach, including large amounts of offshore wind, can happen quickly enough to reach that 20 percent goal, NREL says. It's also not clear whether state political interests would ever allow the build-out of a big transmission overlay that would speed wind power deployment, or whether regions would agree to consolidate control over the grid, in order to maximize wind power's impact.

Time matters, contend authors of an "Electrification Roadmap," released last year, which charted a scenario for moving a large portion of the U.S. light-duty vehicle fleet from reliance on gasoline power to battery or hybrid power.

If 75 percent of the light-duty vehicle miles traveled in the United States were "electric" miles in 2040, then oil consumption by that fleet would drop from more than 8 million barrels a day today to 2 million, with a corresponding decline in U.S. dependence upon foreign oil, that study says.

To reach that goal, however, the nation would have to hit a "tipping point" around 2020 with new transmission and charging infrastructure capable of serving a quarter of new car and light truck purchases.

"The No. 1 problem is that there's no certainty about what future to plan for," said Evan Wilcox, AEP's manager of transportation business development. "If we knew it would be a 20 percent renewable future, then your transmission would get built."