The Transformer – February 6, 2008

Size matters

‘Mega’ wind farms could make new transmission practical


The number and size of new and projected Northwest wind farms have exploded, matching the worldwide annual growth rate of 37-percent for the past seven years.

Wind, however, continues to provide just a small fraction of the region’s power. To really combat global warming — and to meet the renewable mandates recently passed in California, Washington and now Oregon — we will need a lot more renewable energy of all types in the next 15-20 years … around 10,000 megawatts more. If wind were the primary new resource, we’d need 75-100 new projects of the size typically built in this region.

Most regional wind development has occurred in the Columbia Gorge area, with its strong winds and access to Bonneville Power Administration’s transmission grid. Multiple developers have targeted Central Washington’s Kittitas County, which also boasts that critical combination of wind resource and ready transmission. In both areas, wind developers are starting to get pushback from local residents who have generally welcomed a wind farm or two, but are wary of hosting too many more.

One solution is building new wind farms in more remote reaches of, say, Montana and Wyoming. This strategy presents two immediate concerns: First, any remote development will require construction of new transmission lines – with the attendant routing controversies. Second, clean-energy advocates are justly concerned that the new lines would just as likely carry fossil-fueled power as power from renewables, especially since the intermittent power from a Northwest wind farm would be claiming only about a third of the total line capability.

Solving the second problem involves siting really big wind projects in largely unpopulated but really windy areas. That combination – strong, near-constant winds and lots of turbines – could result in projects large enough, by themselves, to cost-effectively cover the expense of new transmission.

This issue of The Transformer considers a recent study from the Center for Energy Efficiency and Renewable Technologies (CEERT) that examines the economics of “mega projects.”

Thinking big

In “Renewables-First Generation/Transmission Projects,” CEERT’s David Olsen says wind-power advocates must concentrate on “Mega Projects” such as South Dakota’s 3,000-plus megawatt Rolling Thunder wind facility or the recently studied projects that would bring 6,400 wind-generated megawatts from North Dakota and Manitoba to Toronto and New England.

Olsen writes:

A few very large projects can add as much wind generation capacity as hundreds of traditional 100 MW projects, and can be developed and built much more quickly. Compared to traditional wind plants, Mega Projects are likely to provide significant economies of scale not only in development and permitting, but also in financing, component sourcing, construction, power marketing and operation. These economies may help drive down the cost of energy from large-scale renewables development… Installing large numbers of wind turbines in unpopulated regions [also] avoids landowner and public objection to dense turbine siting in populated areas.

Economies of scale result from a greater number of turbines, and from higher capacity factors. For example, a good Columbia Gorge wind farm might have a 33-36 percent capacity factor: For each 100 megawatts of total nameplate machine capacity, the wind blows frequently and strongly enough to produce an average of 33-36 megawatts over the year. But some wind sites in Mountain and High Plains States are normally in the 45- to 50-percent range. PacifiCorp is investigating one potential site with an estimated 60-percent capacity factor. The difference in cost per megawatt-hour is significant.

Transmitting that remotely generated power remains a problem. A relatively large 1,000-megawatt wind farm must have enough transmission available to carry the full 1,000 megawatts when the wind is blowing hard, even though it transmits less power than that much of the time. Building a transmission line to bring Wyoming or Montana wind power to Western population centers might be economic if unused line capacity is sold to generators of power from some other source — such as coal or natural gas. Some clean energy advocates worry that coal generators would be the main beneficiaries of new transmission ostensibly built to support wind power.

Conventional thinking is out

But the region’s appetite for coal is shrinking. California and Washington — two of the most likely markets for new generation — recently passed landmark legislation essentially forbidding utilities from purchasing power from, or investing in, new conventional coal plants. Oregon failed to enact similar legislation in the 2007 session, though its new 25-percent renewables standard puts a serious damper on attempts to meet that state’s future power needs with fossil fuels.

As West Coast utilities turn away from coal-generated electricity, renewables developers are showing renewed interest in building new transmission to Montana and Wyoming — wind’s “Saudi Arabia.”

And in place of Mountain States’ coal plants, developers of large-scale remote wind projects now find that they’re competing with relatively cleaner natural gas-fired generation located close to the load and requiring no new transmission lines.

In his study, Olsen compared the economics of supplying large loads in Las Vegas and Los Angeles with 3,000 megawatts of Wyoming wind, including the cost of new transmission, with power from new gas plants located near the loads. The extremely long route has higher transmission costs than would be needed to serve sites closer to the Rockies, and thus makes the comparison quite conservative.

Olsen’s conclusion:

[L]arge-scale renewable energy generation projects (‘Mega-Projects’) appear able to economically justify major transmission infrastructure with no … participation by coal.… The $37.20/MWh difference in the cost of power … between gas fired generation in the Los Angeles area and wind generation in Wyoming, is large enough to pay for the necessary transmission ($29.90/MWh), while supporting a competitive rate of return on the overall generation-transmission project.

In other words, building a new 3,000-megawatt capacity transmission line from Wyoming or Montana mega-wind projects all the way to Southern California results in lower power costs than would building new gas-fired plants close to the loads. The high and variable cost of natural gas is the primary driver of the cost difference. That means large-scale clean energy can hold its own against natural gas-fueled power, with no help from coal to underwrite the new transmission.

Details, details

The Olsen study is very detailed, and includes wind integration costs. It includes a 1.6 cents per kilowatt-hour carbon adder in the gas case, but not the federal Production Tax Credit (thus the two factors essentially cancel each other out).

Three factors are key to the economic analysis:

1. The wind really blows in Wyoming. The U.S. Department of Energy estimates that Wyoming has more than 57,000 megawatts of Class 6 and 7 wind, with capacity factors in the 40- to 48-percent range. Olsen’s study used 45 percent.

2. Olsen models over-construction of the resource: 3,600 megawatts. This means that about 10 percent of the time, some energy will have to be “wasted” by feathering the blades (or perhaps used locally), but the excess capacity means the transmission line is used more:  at 54-percent capacity up from 45 percent. The trade-off (some wasted generation, but more efficient transmission use) is worth it.

3. Building a 3,600-megawatt project creates a large economy of scale. Using 2015 dollars, Olsen estimates a mega-project construction cost of only $1.3 million per megawatt, a substantial savings from the current $1.7-2 million per megawatt cost for the currently typical 100-megawatt Northwest wind farm.

NWEC’s conclusion

The answers for meeting our energy needs – and doing so cleanly and affordably – will no doubt be multifarious. Not all will pass muster, but we must constantly look beyond the static set of traditional choices and remain open to conceptual and technological breakthroughs.

First and foremost, we must increase the efficiency of the existing generation, transmission and distribution system, and of all electric and gas end uses. We must deploy smart grid technologies, improve grid operator and control area coordination, and apply more effective price signals and transmission products.

The Northwest has just begun large-scale harvest of its rich diversity of renewable resources. Accelerated development of our solar, geothermal, biomass, ocean and tidal resources — along with continued expansion of wind projects — will move the region much closer to meeting its renewable energy goals and legal standards.

Mega-wind projects may or may not be part of the solution. Their apparent cost effectiveness versus fossil-fueled generation is encouraging. However, few mega projects of any kind are light on the Earth, and we must measure their value against that of other available clean-energy options.

Additional Links:

David Olsen’s paper, “Renewables-First Generation/Transmission Projects”