Electric Transmission Investments Needed to Unlock Enormous Wind Power Resources in US

Feb 2, 2009 - emerging energy research

Cambridge, Massachusetts - The electric transmission investments proposed in the new Obama administration’s stimulus plan would have a major impact on wind power development in the US, according to Emerging Energy Research, a Cambridge MA advisory firm in the renewable energy sector. EER has recently profiled nine of the largest transmission initiatives under development in the western United States, which alone are set to unlock 57 GW of new wind power -- more than tripling the existing wind power capacity in the US. While most of these large-scale projects are not scheduled for completion until after 2015, hundreds of smaller transmission lines and grid upgrades can provide a more immediate impact on wind power development in the US.

The US wind power industry finished 2008 at a record pace, just ahead of EER’s 2008 base case forecast of 8,203 MW – the American Wind Energy Association reports 8,358 MW were installed at year-end. EER expects a significant decline in 2009 projects due to the curtailment of project and tax equity financing in the current economic climate. But according to EER president William Ambrose, “investments in new transmission and other renewable policy provisions being considered in the stimulus bill can go a long way towards maintaining momentum in the industry.” EER’s high-growth wind power forecast -- which factors in a national renewable portfolio standard and stepped up investment in transmission – estimates 187 GW of wind power capacity by 2020, accounting for nearly 14% of total US power consumption.

Wind development in the United States remains constrained by an inadequate and aging transmission infrastructure that hampers the delivery of wind generated power from regions of wind-rich resource to population centers with growing clean energy demands. None of the nine projects profiled by EER are expected to be fully operational before 2013, and the timeframe for new grid capacity is made even more uncertain as these large projects face complex permitting and siting hurdles. “Beyond investment, a significant amount of initiative is required on a Federal level to fast track permitting and siting of these projects,” says Ambrose.

With none of the large-scale transmission initiatives expected to come online between 2008 and 2012, annual growth in the US wind market may stall at 8-9 GW per year according to EER. “The inability of transmission build-out to keep pace with wind project development activity will increasingly constrain the growth of the US wind power market in the near-term,” according to EER senior wind analyst Matthew Kaplan.

The nine projects analyzed by EER will open up large regions of wind resources stretching from Minnesota to Southern California. In some regional transmission areas (RTOs), such as the Midwest Independent Transmission System Operator and Southwest Power Pool, EER found that wind projects are the most proposed form of generation, comprising an average 80% of the total generation seeking to interconnect. Wind development activity across the US has prompted some planners to re-shape transmission projects to include wind: at least four of transmission projects profiled by EER were initially targeted for coal generation and have been adapted to address booming demand for wind power in the western US.

Exhibit: US Wind Power 2008- 2020, Base Case vs High Growth (Cumulative MW)

Source: Emerging Energy Research

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About the Findings

EER’s research findings were released in a Market Brief, Transmission Initiatives Adapt to Wind US Growth, part of the company’s North America Wind Advisory Service, a program that provides on-going analysis of market trends and developments to wind industry developers, utilities, and technology suppliers.

EER’s US wind market forecasts appeared in our July 2008 release of US Wind Power Markets and Strategies 2008-2020, an in-depth study providing critical strategic and tactical support for those seeking to compete in US wind markets. This 310-page study, produced annually by EER, features state by state analysis, market environment rankings, competitive analysis of utilities, IPPs and developers, as well as US wind turbine manufacturer and component supplier analysis. Follow this link for the study's Table of Contents and Order Information.

About Emerging Energy Research

Emerging Energy Research is a leading industry advisory firm providing unrivaled balance and perspective on the world’s clean and renewable energy markets. Based in Cambridge, MA and Barcelona, Spain, EER works with more than 1,000 stakeholders across the industry, providing research-based advice, support, and analysis to executives and key decision-makers including utilities, developers, independent power producers, technology promoters, manufacturers, and investment companies.