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Wind Power, Transmission Lines, and a Vision for a Better Electric Grid

By Evelyn Teel

Wind energy is an incredible resource with incredible potential. The generation costs are low, the efficiency of turbines continues to increase, and the threat to birds continues to decline. An unfortunate irony, however, is that the places with the most prolific wind energy tend to be places with relatively little demand for power.

West Texas, the Dakotas, Kansas, the Oklahoma panhandle – these are all places where the wind blows powerfully and fairly consistently. However, getting electricity generated by that wind to the population centers that most need it is challenging in the current environment. The decentralized nature of the US power grid means that moving electricity across state lines and between regions is difficult, and sometimes seemingly impossible. 

A wind farm

Several people have envisioned networks of high-voltage transmission lines that could move power from areas of abundant wind energy (as well as solar energy) to areas that could use that power. Russell Gold’s book Superpower centers on one of those people.

Michael Skelly conceptualized a series of high-voltage, direct current transmission lines radiating out from the center of the United States to points east and west. Little did he realize, however, quite how complicated it would be to implement that vision. With differing economic, political, regulatory, and cultural realities in different states, overlain by the interests and powers of the federal government, Michael Skelly’s company, Clean Line Energy Partners, would require agreement from myriad stakeholders in order to make their project a reality.

High-voltage transmission lines and supporting tower

Though Superpower focuses primarily on Michael Skelly – including earlier ventures that prepared him for the task at hand – the author incorporates a wealth of information about the history of the electric grid and the energy field. He provides fascinating background about major developments that have led to the system we have in place today, from the first factory with generator-powered electric lights to the first centralized power plants to the first “experiment” in which wind energy was fed back into the electric grid. He also illustrates the massive declines in the cost to generate wind energy, along with the growth in the size of wind farms.

The electric grid has evolved over time such that electricity is generated and used within the same general area – first, within the same building; then, the same city; and now, the same region. In order for renewable energy to provide a sizeable percentage of our electricity needs, the next step in that evolution will need to be transmission lines that allow electricity to be moved across regions. The book’s extensive discussions of the various players in this drama – utility companies, public service commissions, elected officials, landowners, federal agencies – and their interests and motivations bring clarity to the challenges facing anyone attempting to modernize the grid. It is also fascinating to learn how differently various states approach the energy industry, and how state and federal powers intersect.

Russell Gold is clearly very sympathetic to Michael Skelly and comes across at times as more cheerleader than reporter. However, looking beyond the fanfare, the reader can gain a strong understanding of the challenges facing the US as we seek to incorporate more renewable energy, update the electric grid, and increase the resilience of our power supply.

The Avalon Advantage – Visit our website at www.avalonenergy.us, call us at 888-484-8096, or email us at info@avalonenergy.us.

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All images copyright 2019 Avalon Energy® Services LLC

Copyright 2019 by Avalon Energy® Services LLC

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Maryland Renewable Energy Portfolio Standard (RPS) – Veto Override

Last week, the Maryland House and Senate voted to override Governor Larry Hogan’s 2016 veto of the 2016 Clean Energy Jobs bill.  As a result, Maryland’s Renewable Energy Portfolio Standard (RPS) will increase from 20% in 2022 to 25% in 2020.  The graph below shows the effect of the original RPS rule in blue overlaid with the newly amended rule in red.

Maryland’s solar “carve out” will increase as well as shown below.

Regulatory guidance is that customers with executed retail electric contracts in place prior to the effective date of the override are grandfathered from the additional RPS costs until the expiration of the grandfathered contract.

This is a good time to consider extending your electricity supply contracts to year 2021.

The Avalon Advantage – Visit our website at www.AvalonEnergy.US, email us at info@avalonenergy.us, or call us at 888-484-8096.

Please feel free to share this article.  If you do, please email or post the web link.  Unauthorized copying, retransmission, or republication is prohibited.

Copyright 2017 by Avalon Energy® Services LLC

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Cape Wind

It was recently reported that a power purchase agreement between National Grid and Cape Wind was approved by the Massachusetts Supreme Judicial Court. National Grid is committed to purchasing half of the output of the project at a starting price of 18.7 cents per kilowatt-hour. This price will then escalate 3.5% per year for 15 years.

With this 3.5% annual compounding, the contract price will reach 30.3 cents/kWh in the fifteenth year. Over the term of the agreement, the average price from Cape Wind will be 24.1 cents/kWh. How do these prices for wind generated electricity compare to historical electricity prices in New England?

The above graph shows the daily price of electricity in NEPOOL over the period of time spanning 2001 through 2011 (blue line). NEPOOL is New England’s bulk electric power market. In New England, as is the case elsewhere, electricity prices exhibit considerable volatility. Over this eleven year period, daily electricity prices have been as high as 31.2 cents/kWh and as low as 2.5 cents/kWh, and have averaged 6.3 cents per kWh (red line).

Electricity prices in New England have been declining. Since the beginning of 2009, daily electricity prices have averaged 5.2 cents/kWh.

So, how does the cost of electricity from the Cape Wind project compare to historical prices in New England? In order to provide a visual sense, the two graphs above are reproduced below, each modified to have the same vertical axis scale. In both cases, the horizontal red line represents the historical average wholesale price of 6.3 cents/kWh.

Cape Wind’s website describes their project as consisting of 130 wind turbines that can produce up to 430 megawatts of electricity. Assuming a 25% capacity factor and the application of both the historical average NEPOOL price and the average Cape Wind contract price to the total projected output of the wind farm, the annual difference in cost is estimated to be $167 million.

The Cape Wind project represents a large, long position in what today is expensive electricity with a fixed escalator. This analysis is limited and does not reflect future price movements (up or down) in the cost of electricity associated with the existing and future fleet of generation in New England nor the environmental, social and operational costs and benefits associated with the existing and future fleet of generation and the Cape Wind project.

The Avalon Advantage – Visit our website at www.avalonenergy.us, call us at 888-484-8096, or email us at jmcdonnell@avalonenergy.us.

Copyright 2012 by Avalon Energy® Services LLC