Why Isn't Midwest Wind-Generated Power Blowing East?

In the waning days of the Great Depression, FDR signed the Rural Electrification Act of 1936 into law, heralding a new era of growth and prosperity for the nation’s heartland. While electricity was generally available in cities and towns, it was nearly unheard of on farms, ranches and other rural areas. The REA brought electric power to these sparsely populated Midwest farms and ranches.

Today the shoe is on the other foot, so to speak. President Obama is hoping that Midwest rural areas will return the favor, and provide much needed wind-generated power to densely populated cities and towns up and down both coasts of the country.

Wind turbines are huge, and not well suited to more densely populated areas. They are a natural fit in the vast open plains of the nation’s heartland, where the wind almost never stops blowing. But there’s a problem… it’s just not the one you might think.

Here’s why wind-generated power is still going to be the driving force for change in the way we use energy, and one of the biggest obstacles it has right now to getting us to where we need to be.

A Banner Year For The Wind Power Industry

2008 was a banner year for the wind power industry:

• Previous installation records were blown away, with over 8,500 megawatts (MW) of new generating power installed in the United States alone. That’s enough to light over 2 million homes.
• Wind power installations represented 42% of all the new power generation capacity added in 2008.
• The 44 million tons of carbon emissions avoided equates to taking 7 million cars and trucks off the highways.

As a result of the current recession, the wind energy installation outlook for 2009 will be somewhat muted compared to last year, with about 5,000 MW expected to be installed. But despite the downturn, the industry is still in expansion mode. And that’s a good thing.

A lot of the stuff is engineered and made right here: domestic “made in the USA” components now make up about 50% of the average system, up from 30% in 2005. And like any other burgeoning sector, when business is booming, companies expand and hire people.

In just the last two years, wind turbine, tower and component manufacturers announced new facilities, added or expanded 70 facilities, 55 of them in 2008 alone. It creates lots of jobs as well. Today 85,000 people are employed in the wind industry. That’s a 70% increase from just one year ago. It’s all good news - well almost all of it.

Where Wind-Generated Power Is Needed The Most

You see, while plenty of wind farms dot the ranchlands of the Midwest, the bulk of the wind-generated power produced is needed in the dense urban areas on the east and west coasts. And there’s the big problem: the existing power grids won’t cut it.

Just consider: 3,000 utilities generate power and send it to 500 transmission owners. They control over 164,000 miles of transmission lines divided into three major interconnection regions: East, West, and Texas.

As an electrical engineer, I may be one of the few who can appreciate the technology, but it’s truly amazing that it all plays together.

They’re fragmented, low power grids that aren’t capable of transmitting the hundreds of thousands of megawatts that will be needed thousands of miles away from the wind farms. The bottom line is that in order for the estimated 300,000 MW of proposed wind-generated power to get to where it's needed, $60 billion will need to be spent on grid upgrades and interconnects by 2030.

The Biggest Problem Facing Wind-Generated Power

But even assuming the $60 billion was available to be spent on this type of alternative energy right now, not a dime of it would be used to build wind-generated power transmission lines.

The problem? Red tape with a capital R:

• Regulations that aren’t designed for power transmission between states.
• Rules that burden the local ratepayers unfairly with the construction costs instead of distant beneficiaries.
• Approval times measured in years, not months.

Here’s an example of how ridiculous it gets: American Electric Power (NYSE: AEP) is a public utility holding company in the business of generation, transmission and distribution of power at both the retail and wholesale level. As part of an expansion of its network, the company erected a transmission line between West Virginia and Virginia. The construction time was two years. The approvals took 14.

Susan Tomasky, AEP Transmission President, explains the problem: “There are lots of people with authority to make pieces of the decision, and no single entity that can say ‘yes’ or ‘no’.”

Clearly what’s needed is federal permitting to locate cross-country transmission lines. The federal government has been doing it with natural gas pipelines since the 1960’s.

Looking To The Future Of Wind Turbines

So what are the chances of the fed saving us, and getting it done in the near future?

Better than you might think: Jeff Bingaman - Chairman of the Senate Energy Committee - has a proposal that will require comprehensive plans for grid interconnections. More importantly, it will greatly expand the FERC’s powers to locate big new transmission lines at the federal level (bypassing the myriad of local regulations) and the authority to properly allocate their costs.

And firms like AEP and ITC Holdings Corp. (NYSE: ITC), another power generation and transmission company, are both eager to invest and build lines from the Midwest to cities in the east.

Even if all goes according to plan - which isn’t ever the case in Washington - these lines wouldn’t be in service until 2020 or so. Clearly a more streamlined approach is needed. The refreshing news is that it appears politicians are actually working on the problem.

Disclosure: none.

Comments

[epeon:]

The biggest problem with wind generated power is that it does not make any economic sense. The best data I gathered says that electricity generated using wind is on the order of $.18/kwhr. This is, by the way, what the mandated cost of it is in California. Compare this to coal generated electric power (about $.03 to $.05/kwhr) and gas fired electric power (about $.07 to $.09/kwhr). Without huge government subsidies (i.e. taxpayers), windpower is not economic. Are average Americans willing to have their electric bills at least doubled?

Jul 14 08:32 AM

[Njord Wind:]

epeon: Gather some more data. New onshore wind farms cost anywhere from $.05 - $.09/ kwh, depending on the wind resource. While existing coal plants may generate in the range you mentioned, new coal plants will cost as much or more than wind. The PTC is worth just north of $.02/kwh, so unsubsidized wind would cost $.07-$.11/kwh. Your estimates for gas plants are roughly correct, until gas prices go back to $6-$7/MMBTU. Your rhetoric about "electric bills doubling" is ignorant and irresponsible.

Jul 14 09:55 AM

[lefty37:]

Do not know where you received your midwest wind results. Where we live, central Illinois, the only time we have enough sustainable wind is in March. I'm looking out of the window as I write. Not even a tree leaf is moving.

Jul 14 11:21 AM

[quick:]

"The refreshing news is that it appears politicians are actually working on the problem."

Is it really a good thing that more politicians are working on the problem? I would consider that a bad thing, and the main reason projects like this get held up for years.

Jul 14 12:02 PM

[nakedjaybird:]

David Fessler - now you just turn around and go inform all your friends in DC to get with putting all the new power grid within the already existing right-of-ways for all the interstate hiways. They criss-cross the US hinterlands every 100-200 miles and thru if not nearby all major cities in the US, east to west, north to south. That's the answer as to where to put the new transmission lines.

The short connects from solar or wind farms to the interstate hiway grids should be a minor problem and the major is solved. Put up the new solar and wind generating farms - and bury, put along side or above the interstate highways all the transmission. We already have those right-of- ways.

Let the Gov't own the transmission. They own everything else, or soon will. It's certainly cheaper than having all the regulators and utilities and their lawyers arguing about it for a dozen years and then doing something, maybe. We pay for that too.

So go tell 'em.

Jul 14 12:16 PM

[Road Runner:]

lefty37, Northern Illinois, where my relatives live, has plently of wind, and wind farms are popping up in many places. The ice age glacial moraines created ridges where the wind is accelerated as it passes over the ridge. Going north on I-39 before getting to Rockford, there is a wind farm on the left that is located on the top of one of these glacial moraines.

Jul 14 02:07 PM

[jerrydd:]

Big wind, solar costs are much more than home wind, solar thermal which is where the real future of RE is, in many millions of home size units.

Why is the land is paid for, no new powerlines that cost as much as the wind generators are needed. Now add that homeowners pay $.10-.23/kwhr and payback is much faster, savings/profit much better once real mass production is done.

Already good wind generators of 1kw are just $1k or many web lists/groups where one can learn if handy how to build them for $300/1kw or $450/2kw in retail parts. It's only a matter of time before these are common as energy prices go up limiting the price of coal, NG power..

Jul 14 03:07 PM

[c300man:]

There is little discussion of the energy requirements to transmit large amounts of electrical energy long distances. There is a cost associated with energy transmission that increases as the distance increases. So ideally, energy should be generated as close as practical to where it is used.

New technology is / can be employed to reduce this energy loss but that comes at a cost. Hopefully the author can comment about this transmission energy requirement and how it can be minimized and at what cost.

Jul 14 03:29 PM

[rivermann75:]

China has the best solution for wind power. They are building wind farms near the ocean where the wind never stops blowing.

Jul 14 04:57 PM

[User 456609:]

coastal users do not want to look at windmills in thier backyards.they should not demand windpower from elsewhere till all thier local sites have been developed

Jul 20 02:13 PM