A Free-Market Energy Blog

AWEA Misinformation on Power Transmission

By Donn Dears -- April 7, 2019

Straightforward analysis shows that the AWEA generation/transmission proposal is very expensive and amounts to spending $4 billion unnecessarily (based on a 400 MW infrastructure).

A representative of the American Wind Energy Association (AWEA) recently wrote what amounted to an op-ed in Power magazine, claiming that building more transmission lines would make the grid more efficient.

The core of her argument was that more transmission lines would bring wind from distant parts of the country to where it could be used.

She said

“Now is the time to expand the nation’s network of transmission lines to bring electricity from the country’s most renewable-rich sites to the cities.”

What this would mean, in real terms, is to spend billions of dollars unnecessarily on new transmission lines. It is no free lunch but an expensive, unnecessary second lunch.

While new transmission lines can improve efficiencies in certain areas where existing lines need to be expanded or interconnected with other transmission lines, building new lines to transport electricity thousands of miles is merely expensive.

Here is the basic question: Is it better to build a (combined-cycle) natural gas power plant close to where it’s needed or build a wind farm a thousand miles from where the electricity can be used, and in each case build a new transmission line to carry the electricity from either the new wind farm or a new gas plant?

In each instance, the plant would generate 6 billion kWh per year of electricity. Let’s look at the economics.

The cost of building an 800 MW natural gas combined cycle (NGCC) power plant would be $800 million (800,000 KW * $1,000 per KW) and have a capacity factor of 85%.

The cost of building a comparable wind farm would be $3,800 Million (1,900,000 KW * $2,000 per KW). The larger capacity is needed because the capacity factor of the wind farm would only be 36%. However, the costs are calculated so that the total generation of 6 billion kWh is the same for both the wind farm and NGCC power plant. 

The distance between Billings, Montana, near where excellent wind conditions are found, to Chicago is 1,245 mils. Or alternatively from Casper, Wyoming, is 1,092 miles.

The cost of constructing a new 230 KV transmission line is approximately $1 million per mile.

The table compares the cost of the two alternatives: A new wind farm (first cost column) where renewable wind is plentiful, with an NGCC power plant (second cost column) near where the electricity can be used

Wind Farm
Cost of plant$3,800,000,000$800,000,000
Cost of Transmission Line$1,100,000,000$100,000,000

These costs ignore some other factors. Line losses, for example, will be about 11 times worse for the wind farm than for the NGCC alternative.

In addition, wind is unreliable and may not be available when it’s needed. And the winters where the wind farm is built are severe (See my analysis, Wind Power Warning).

Straightforward analysis shows that the AWEA generation/transmission proposal is very expensive and amounts to spending $4 billion unnecessarily (based on a 400 MW infrastructure).

AWEA’s Betsy Beck, director of electricity and transmission policy, ends her article:

“The changes described here require no breakthroughs or moonshots—they rely on long-established technology and governance structures. And yet, these suggestions could have a profound impact on the power system, both facilitating even more renewable energy growth while making the overall system more reliable and affordable. That’s a win-win for American families and businesses.”

Wrong. Surplus, low-utilization transmission is a lose-lose for ratepayers and the general economy with the only gainers being a few crony capitalists. What AWEA thinks is a free lunch is an expensive, unnecessary meal.

What is needed is a market test, of course. Remove all local, state, and federal subsidies for wind power and see what generation is built and what transmission emerges to move it.

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