The debate over reliability and the costs of reducing carbon pollution comes to St. Louis with the Federal Energy Regulatory Commission (FERC) holding a technical conference on the electricity grid with the EPA carbon pollution rules. Folks looking at this debate should consider three reasons why the central U.S. has great opportunities to reduce carbon pollution:
1. Economics for renewable energy are better than most assumed
With expansive windy open spaces, the central U.S. offers wind energy under 3 cents per kilowatthour and has been doing so since 2012. Installed costs for windfarms are around $1750 per kilowatt. Meticulous reports on recent wind technology costs are available from the Lawrence Berkeley National Laboratory.
Wind from Oklahoma has been sold in voluntary, approved long-term contracts to Georgia and Alabama at prices below the long-run cost of fossil-fuel generated power.
2. The region has world-class experience integrating wind on the transmission system
The Southwest Power Pool (SPP) ran the grid with wind serving 33.4% of the load during April 6 2013, the same week as shown in the map graphic above. SPP continues to set new records for its highest amount of wind production – the latest was in January 2015, with 7,625 MW. Other grid operators are also proving that wind reduces fossil fuel needs and carbon emissions. The Midcontinent Independent System Operator has met 25% of demand from wind; ERCOT, the grid operator serving Texas, 39.7%. A thorough report from the American Wind Energy Association describes this option for compliance with the EPA Clean Power Plan.
The central region also knows how to plan and build transmission for wind. The region’s utility sector, including some new businesses challenging the monopolies, has risen to meet the need to connect remote windy areas to the existing grid and meet consumer demand for new, clean and cheap energy. Much of the wind-related transmission was planned and built in a pro-active recognition of the benefits. These are discussed further in UCS comments for this FERC technical conference.
When early reports about the reliability impacts of the EPA carbon plan came out, and before there were any proposals for compliance (which is still the case), I compared the change in rhetoric about wind integration and transmission for the EPA Clean Power Plan
3. The opportunity for clean energy expansion is huge and ready
SPP states Kansas, Oklahoma, Texas, Louisiana are and will continue to be energy exporters. New development is well along, and can be seen with proposals for grid connection. The connection queue for SPP indicates that the active wind projects add up to 15,000 MW in that region alone. Developers of 2,800 MW of new gas-fired generation are also asking for transmission connections in SPP.
SPP is able to integrate much more wind. A SPP study looked at adding 5 times more wind than was in place at the time (meaning a grid with 13,600 MW of wind) and described what would be needed to manage this added resource.
Discussions of the EPA rules for carbon reduction have overstated the impact on reliability. Too many have started by assuming that the reduced use of fossil-fuel will require the abrupt closing of coal plants. The implementation of the EPA rule will not require plant closings, or any specific deadline for plant closings. The mid-Atlantic grid operator PJM has made clear that a variety of factors regarding the revenues that flow to older coal plants are all relevant to whether a plant will close. In the central region, most of the coal plants are owned by utilities that are assured revenues for their plants by the state public utility commission. This fact alone provides states and utilities control over the closing of plants during the coming decades as clean energy supplies replace the energy from the oldest and most-polluting plants in the region.
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