Doubling power in mid-Atlantic, Midwest could save $7B annually — report

Source: Hannah Northey, E&E reporter • Posted: Friday, May 10, 2013

Clean energy advocates and former chairmen of the Federal Energy Regulatory Commission today unveiled a report that found doubling wind power in the Midwest and mid-Atlantic could lower the regions’ electricity prices but avoided the prickly question of who pays for those projects.

Doubling wind power in the footprint of PJM Interconnection, a grid operator that oversees the electric grid in 13 states and Washington, D.C. — would lower greenhouse gas emissions and save the region almost $7 billion annually by 2026, according to the study from Synapse Energy Economics that was commissioned by Americans for a Clean Energy Grid.

Joseph Kelliher, a Bush-era chairman of FERC who went on to Florida Power & Light Co., said the report defies the common wisdom that wind is less reliable and called for a national energy policy that ensures the country isn’t over-reliant on natural gas.

“Like it or not, the U.S. electric supply is changing, not everyone likes that,” he said on a call with reporters today. “Both parties say they’re for ‘all of the above’ but … [that must mean] we’re betting on something else, rather than betting everything on one fuel.”

Wind power is currently growing in PJM through a host of state renewable portfolio programs and accounted for roughly 3.4 percent of PJM’s installed capacity by the end of 2012. Earlier this year, PJM, which oversees more than 65,000 miles of high-voltage power lines, said record retirements of coal plants and additions of gas-fired generation and wind had led to hundreds of grid projects costing more than $5 billion (Greenwire, March 8).

The Synapse study modeled how regional prices would be affected by doubling the amount of wind in PJM’s territory, looking at expanding wind throughout the region and at a scenario in which wind was developed only in higher-performing regions in the Midwest and then shipped into PJM on high-voltage power lines.

In each scenario, Synapse said, wind displaced old coal- and gas-fired power plants and emissions decreased, and the region saved billions of dollars annually. Synapse also found that the cost of increasing wind installations, transmission and backup gas generation could be offset by efficiency gains.

The study, however, assumed that the necessary transmission would be built to transport wind into PJM, that a price on carbon would be in place by 2026 and that up to 59 gigawatts of coal in PJM’s footprint would be retired by 2020. The study did not account for any tax incentives for wind.

The study’s authors said on a call with reporters today that they had shared the study with PJM CEO and President Terry Boston.

Jim Hoecker, senior counsel at the law firm Husch Blackwell and former FERC chairman, said public policy drivers and customer desire to access more renewable energy will ultimately determine whether the United States pursues such an aggressive path toward more wind and transmission lines.