A CRITICAL REVIEW OF WIND TRANSMISSION COST ESTIMATES FROM MAJORTRANSMISSION PLANNING EFFORTS

27th USAEE/IAEE North American Conference September 2007 A CRITICAL REVIEW OF WIND TRANSMISSION COST ESTIMATES FROM MAJOR TRANSMISSION PLANNING EFFORTS Andrew Mills, 1 Ryan Wiser, 1 and Kevin Porter 2 Lawrence Berkeley National Laboratory Energy Analysis Department 1 Cyclotron Rd. Berkeley, CA 94720 Exeter Associates, Inc. 5565 Sterrett Place, Suite 310 Columbia, MD 21044 Ph: 510.486.4059; Fax: 510.486-6996; Email: ADMills@lbl.gov Abstract It is difficult to evaluate the cost of new transmission for wind energy due to the complex and data intensive process of transmission planning. The requirement for wind to be sited in high wind resource areas that are often far from load centers and the low capacity factor of individual wind farms leads to concerns that transmission for wind may have excessive costs. However, regional transmission planning groups are increasingly including wind energy in transmission plans. We analyze 17 transmission plans that include between 500 MW and 25.5 GW of new wind generation to evaluate the range of expected unit costs of transmission for wind. Based on a simplified methodology we find that transmission for wind ranges from $0.40 to 95/MWh or $8.5 to $1,940/kW. However, nearly 75% of the scenarios studied cost less than around $20/MWh or $420/kW. We find no correlation between the unit cost of transmission and the amount of new wind analyzed in each scenario. We also find that no uniform set of methods and assumptions has emerged for evaluating the transmission requirements for wind energy. Introduction Differences between conventional power and wind power make transmission more important to wind projects than to conventional power plants. The location of wind farms is dependent on the wind resource, which is often some distance from loads. Natural gas power plants, for example, require much less transmission because they can be sited near load centers. Wind projects also have a lower ratio of the volume of energy produced to the rated capacity of the power plant (a lower capacity factor) compared to baseload power plants. The need for transmission expansion and the low capacity factor for wind lead to concerns that the cost of transmission per kWh generated may be excessive compared to other generation options. Unfortunately, transmission planning is a relatively complex, data-intensive process that does not lend itself well to simplified analysis. We approach the question of the cost of transmission for wind through a meta-analysis of 17 regional transmission planning studies from across the United States that include accessing new wind resources. While the transmission studies usually provide only first-order cost estimates, the results reveal that, in many cases, concerns about extremely high costs of transmission for wind are unfounded.