Many communities, especially in the Midwest and the Great Plains, are looking to wind power as a future economic engine. The vision is great–develop the local economy while also promoting renewable energy. But, the reality is much tougher. This is not a “build it and they will come” situation. Wind energy doesn’t work without a robust and efficient grid system.
Most wind energy resources are located in rural areas; these regions also tend to be home to antiquated or inefficient energy transmission systems. Without new investments in grid development, the prospects for wind power development may be limited. We can generate the energy, but we can’t get it to the customer.
An interesting new study from the Center for Rural Affairs, Connect the Dots: Transmission and Rural Communities, does a good job of highlighting the key issues in this debate. A number of states, most in the Midwest, are generating sizable portions of their electricity via wind power. Iowa is the national leader with 15.4% of its power coming from wind in 2010. But, the real demand for this power comes from other more urbanized parts of the country. Yet, because transmission is limited, there is no effective means to use abundant wind power from the Great Plains to supply other regions of the US. In fact, the study identifies more than 275,000 megawatts (MW) of new wind projects that are unconnected due to transmission constraints.
New investments in transmission infrastructure could help break this impasse, and, in the meantime, help stimulate new economic activity in rural America. But, the big problem will be how to pay for it. The Center’s researchers estimate that total costs could be as high as $300 billion over the next 20 years. Recognizing that this money is unlikely to come from Washington in the near future, the authors recommend a mix of potential solutions including new Federal Energy Regulatory Commission (FERC) rules to expand transmission investement, and expanded use of renewable energy standards to stimulate demand. The study also notes that investors are also recognizing these opportunities. Today, more than $180 billion in new grid investments have been proposed and 11 new projects are actually underway. This progress is promising, but the pace of these investments—from public and private sources—needs to quicken. Here again is another instance where smart tools for infrastructure investment–such as a proposed National Infrastructure Bank—could play a crucial role in aiding our economic revitalization.