We’d like to think that when we asked Jonathan Thompson, Senior Editor of High Country News, to moderate a panel at our Rocky Mountain summit in January, we knew we’d be providing fuel for a gorgeously-written article that lays out—in language attractive to both the layman and the expert—precisely what we see as a key energy issue in the West. Truth is we didn’t have that kind of foresight. But we did know that Jonathan falls squarely into a growing contingent of practical environmentalists, the “green gridders” as he calls them. This new breed of advocates is departing from the long-held environmental opposition to transmission lines as one-dimensional threats to flora and fauna, and embracing new transmission as essential infrastructure for the renewable energy needed to address a much greater threat: climate change.
Renewable energy, it turns out, works best in competitive markets operating over large, contiguous regions. Transmission lines, like the broadband cables that support the internet, make those big competitive and efficient markets possible. Without transmission lines to connect renewable resources, electric customers are essentially stuck with the energy choices, and prices, that their local grids can provide them. As Thompson points out, nowhere is the problem of disconnected grids worse than in the West. Thirty-eight separate energy balancing authorities (see picture at right) are tasked with balancing energy supply and demand in its own area every minute of every day. The chaos that ensues is the energy world’s equivalent of the Wild West. For comparison, the Midwest Independent System Operator [MISO] operates a 12 state region from North Dakota to Ohio as a single balancing authority. Coordination is poor, resource sharing is limited, and there is little incentive to establish and expand urgently needed transmission line interconnections.
“The West is very diverse, and that’s a good thing,” says Ormond. “You want plants all over the place, because the wind’s always blowing somewhere.”
In MISO, diverse wind resources from 11 different states and strategic transmission investments to connect them allow grid operators to easily balance variability without the need for large investments in balancing generation, storage, or other expensive resources. Wind already comprises more than 10 percent of the MISO’s generating capacity – and is expected to double again by 2025 – yet MISO’s grid operators do not foresee any problems managing those resources reliably and economically.
Mr. Thompson’s “green-gridders” are embracing MISO’s lesson: renewables, transmission, and competitive markets are a powerful combination capable of delivering huge economic and environmental benefits.
“For renewable energy, it makes zero sense to stay in your small area,” says Tom Acker, a professor of mechanical engineering at Northern Arizona University.
Transmission and markets give grid operators options to balance the grid economically at all times. As Mr. Thompson points out, such flexibility in the West would have allowed the Bonneville Power Administration to sell and move surplus clean power to customers rather than wastefully shutting down thousands of megawatts of wind in the spring of 2011. Specifically, a West-wide Energy Imbalance Market (EIM) would allow anyone in the West with surplus electricity to put it up for bid. A report by the National Renewable Energy Laboratory (Examination of Potential Benefits of an Energy Imbalance Market in the Western Interconnection) found that a hypothetical Western EIM would make the grid more efficient and cost-effective for everyone.
How? First, an EIM makes it easier for the West’s myriad balancing areas to share “reserves” or backup resources – instead of keeping expensive and duplicative backup resources online for thirty-eight separate regions. Second, and most important for renewable energy, the EIM would allow surplus renewables to be sold to the highest bidder whenever they’re available. The best kept secret about renewable energy is that, in a competitive market, it’s always the cheapest resource. Electricity prices are set by the operating costs of power plants, in other words the fuel cost. Wind, sunlight and other renewable “fuels” are free, so wind farms and solar arrays bid into the market at zero whenever they’re producing energy. By allowing more zero-cost renewable energy into the market, an EIM would spur demand for renewables and lower prices for everyone.
Studies around the country are now confirming the powerful synergy of renewables, markets, and transmission. Synapse Energy Economics recently found that doubling wind beyond the requirements of state renewable portfolio standards in the PJM Interconnection – the largest competitive electricity market in North America – would save ratepayers almost $7 billion per year in 2026, even after paying for the capital costs of the wind and the transmission. A similar study by Synapse last year found that dramatically increasing wind and transmission investments in MISO would save ratepayers $3.0 to $9.5 billion per year in 2020 – even after paying for the transmission – and that the savings increase as more wind is added. The bottom line: investing in renewable resources and strategic transmission upgrades saves ratepayers money in competitive electric markets.
And it’s a good thing that renewable energy is an economic winner, because we’re going to need a lot of it in the West – and everywhere else – to meet the threat of global climate change. Mr. Thompson’s “green gridders” appreciate the magnitude of the task before us.
“Local groups will say we can do this with rooftop solar,” and therefore minimal additional transmission, says Gary Graham, of the Boulder-based Western Resource Advocates. “It’s just not the case. You can’t get that many solar panels on roofs that fast in the West” to reach his group’s goal of 50 to 80 percent renewables by 2050. “You need utility scale.”
The thirty-eight balancing authorities in the West have a critical role to play in making that future possible. They can cooperate to plan, build, and share the costs of new strategic transmission resources, embrace open competitive structures like an EIM, and help the nation tap its virtually unlimited renewable resources – the best in the world. If they stubbornly cling to outdated policies from a bygone era, we will all miss a major opportunity for abundant clean energy and even more important, for combating climate change. The rugged, self-reliant, and even unruly character will always remain scattered through the West’s mountains, deserts, rivers, and coasts, but the Wild West of Energy must be tamed.