Electric Transmission and Economic Opportunities

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Electric Transmission and Economic Opportunities

• Richard W. Caperton
• Senior Energy Policy Analyst

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Energy Opportunity at the Center for American
Progress

• Clean energy is a success story in tough economic
  times.
• Now we need to scale everything up.
• There are three things that will grow the clean
  energy economy
• Market demand
• Financing
• Infrastructure

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Transmission Does More than Carry Power

• Enables new generation
• Improves reliability
• Reduces congestion and improves market conditions
• Puts people back to work

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Transmission Enables New Generation

• "In order for renewable to replace a meaningful
  amount of our imported oil, we need a national
  electricity transmission system to carry this
  electricity be it wind, solar, biomass or other
  alternatives." - T. Boone Pickens, Texas oil
  magnate
• The U.S. DOE has identified transmission
  limitations as the greatest obstacle to realizing
  the enormous economic, environmental, and energy
  security benefits of obtaining at least 20 of
  our electricity from the wind.
• A poll conducted at the WINDPOWER 2008 Conference
  and Exhibition in June in Houston, Texas, found
  that participants saw transmission as the largest
  roadblock to the continued development of wind
  energy in the U.S.
• Almost 300,000 MW of wind projects, more than
  enough to meet 20 of our electricity needs, are
  waiting in line to connect to the grid because
  there is inadequate transmission capacity to
  carry the electricity they would produce.
• The DOE 20 wind scenario would create over
  500,000 jobs and 450 billion in economic impact
  by 2030, including billions in tax revenue for
  rural landowners and farmers.

5
Transmission Improves Reliability
Base-Case Estimation of Cost of Power
Interruptions by Customer Class
Base-Case Estimate of the Cost of Power
Interruptions by Type of Interruption
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Transmission Improves Reliability

• Today, our grids are antiquated, fragile, and
  vulnerable to cascading failure. Power outages
  and defects in the current grid system cost U.S.
  businesses more than 120 billion dollars a year.
  It has to be upgraded anyway." - Vice President
  Al Gore
• The 2003 blackout in the Northeast U.S. and
  Canada caused an estimated 7-10 billion in
  economic losses.
• An analysis of SPP construction of two
  transmission projects found that the projects
  would have reduced loss benefits of nearly 100
  million.

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Transmission Reduces Congestion and Improves
Market Conditions
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Transmission Reduces Congestion and Improves
Market Conditions

• The AWC Project will reduce LMPs, especially in
  the EMAAC region of PJM, compared to the radial
  alternative. These price impacts would save PJM
  customers approximately 126 million per year or
  1.35 billion over 20 years. - The Brattle Group
• The DOE identified New England in 2006 as a
  Congestion Area of Concern due to high
  electricity price differentials across the region
  and congestion-related reliability problems in
  Massachusetts, and Connecticut. However,
  congestion continues to decrease due to efforts
  and achievements on several fronts specifically
  with energy efficiency reducing total loads. In
  2009, New England was no longer a Congestion Area
  of Concern but New England still faces a
  potential resource shortfall under extreme load
  conditions over the next few years.
• The DOE continues to identify San Francisco,
  Seattle, Portland area as a Congestion Area of
  Concern and the DOE continues to identify the
  San Diego Los Angeles areas as a Critical
  Congestion Area. The New York, Philadelphia,
  Baltimore, and Washington D.C. area are also
  listed as a Critical Congestion Area according to
  the DOE.
• The Figure illustrates that PJMs top 20
  congestion-causing constraints were responsible
  for 87 of PJMs total congestion costs in 2007.

9
Transmission Construction Puts People Back to Work

• Pilot projects from the Rapid Response Team on
  Transmission
• Oregon and Idaho 500 jobs, 300 mile long, 500 kV
  transmission line
• Wyoming and Idaho 1,200 jobs,1,150 mile long,
  high-voltage transmission
• Minnesota and Wisconsin 1,650 jobs,
  Double-circuit 345 kV transmission line, and
  single circuit 345 kV line.
• Oregon 450 jobs, 210 miles of 500 kV
  transmission line
• New Mexico and Arizona 3,408 jobs, two 500 kV
  lines
• Pennsylvania and New Jersey 2,000 jobs, 145 mile
  long 500 kV, and several 230 kV lines
• Wyoming, Utah, and Nevada 1,500 jobs, 700 mile
  long 600 kV line

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Transmission Construction Puts People Back to Work

• We want to spend a fair amount of money
  investing in a new smart grid. That is, the
  ability to transmit across high-tension wires in
  the minds of most people in the public, or
  underground in these wires, wind and solar
  energy. You can't do that now. That would create
  tens of thousands of new jobs, high-paying jobs.
  Vice President Biden
• An AWEA report analyzes that a SPP proposal that
  costs 1.1 billion in transmission expansion in
  Kansas, Oklahoma, and Texas would create 7,475
  transmission jobs and 962 million in economic
  output.
• A report by the University of Southern Maine
  analyzed a 2008 proposal by Central Maine Power
  Company that would cost 1.5 billion and be
  implemented over three years. The project would
  result in 2,100 indirect and direct jobs in
  Maine. The project would result in 242 million
  in wages and salaries, and increase Maines GDP
  by nearly 300 million over four years.
• The American Transmission Company (ATC) recently
  completed a large scale project (353 kV) and a
  small scale project (138 kV) in Wisconsin and
  Minnesota. The small scale project generated 42.5
  jobs for every mile and had a 6 million per mile
  total economic impact. The large scale project
  generated 11.6 jobs for every mile and has a 2.1
  million per mile total economic impact.

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Thank you!

• www.americanprogress.org
• rcaperton_at_americanprogress.org
• 1-202-741-6284