Renewable demands drive billions in transmission investment

Thursday, November 10, 2011

As demand for renewable electricity increases, utilities are proposing new transmission lines to connect the new crop of electric generation projects to consumer markets.  Given the scale of these projects, and because renewable power projects are often sited far from the cities and industrial sites where the electricity will be consumed, the proposed transmission lines can come with a significant price tag.  For example, the Northern Pass project - a proposed high-voltage DC transmission line capable of carrying 1200 megawatts of power from Quebec to New Hampshire - is projected to cost $1.1 billion. These costs, and who must pay them, can generate as much controversy as siting the route for the transmission lines.

Another major high-voltage direct current transmission line has been proposed by Rock Island Clean Line LLC.  The Rock Island Clean Line would run about 500 miles from northwestern Iowa into Illinois, where it would connect with the mid-Atlantic regional grid operated by PJM Interconnection.  The proposed line would be positioned to collect electricity produced by wind power facilities in the eastern parts of South Dakota and Nebraska as well as the western parts of Iowa and Minnesota.  This power could be delivered into Illinois, either to satisfy that state's renewable portfolio standard or for further transmission throughout the mid-Atlantic region.  Proponents of the line also claim that it would reduce transmission constraints between the Midwest ISO and PJM grids, as well as reducing wholesale energy prices in Iowa and Illinois.

The price tag for the Rock Island Clean Line project is projected to be $1.7 billion.  While the current project is based on the assumption that the electricity flowing over the line would come from wind generation, there is no guarantee that the resource mix will be as expected.

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