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Green Energy Outlook

Realizing the benefits of a modernized system requires an integrated strategy.

Fortnightly Magazine - January 2010

aimed at reducing CO2 emissions to 17 percent below 2005 levels by 2020 and 83 percent below 2005 levels by 2050. It also contains a provision for 20 percent of U.S electricity to be supplied by renewable generation by 2020. 1 The Senate is currently working on the Kerry-Boxer bill, which in its current form 2 proposes to reduce CO 2 emissions to 20 percent below 2005 levels by 2020 and 83 percent by 2050. Meanwhile, at the state level, there have been a variety of regional CO 2 initiatives, such as the Regional Greenhouse Gas Initiative (RGGI) and the Western Climate Initiative (WCI) (see Figure 4) . Additionally, state renewable portfolio standard (RPS) or renewable energy standard (RES) programs require that varying percentages of total electricity production come from forms of renewable generation. Currently, 28 states plus the District of Columbia have RPS targets in place.

Policy makers also have recognized that T&D upgrades will be necessary to meet these challenges. President Obama has called for the construction of 3,000 miles of new transmission lines 3 and in October 2009 unveiled $3.4 billion in stimulus funds for specific electricity infrastructure projects, including smart-grid systems and supporting infrastructure and modernization of transmission lines.

Integrated Solution

Looking forward, it’s clear that renewable generation will play an important role in the future of the power markets. However, ensuring both the installation of significant levels of renewable generation to meet CO 2 abatement and other regulatory objectives, as well as the ability to deliver the generation from the new renewable plants to load centers, is a large undertaking, exacerbated by the continued challenging financial market environment. To create a modernized electricity production and delivery network that supports environmental sustainability, delivers energy in a reliable manner to changing load centers, and facilitates the evolution of customer demand characteristics, it’s important to integrate a solution that not only addresses the character of installed megawatts, but also the need for significant T&D infrastructure and that balances generation.

One of the biggest challenges associated with the development of substantially greater sources of renewable generation is the need for a new and enhanced T&D infrastructure to accompany the new assets. Stated simply, while the United States has vast amounts of renewable resources, a majority of these resources are located away from load centers, requiring major investment in new T&D infrastructure.

Perhaps the best example of this is the Electric Reliability Council of Texas (ERCOT), which has added more than 8,500 MW of wind capacity to date. 4 Over 90 percent of ERCOT’s wind capacity is located in the sparsely populated West, while the major demand, or load centers ( eg., Dallas, Houston etc.), are located in the East. Due to limited transmission capability from the West to the South and East zones, much of the wind capacity is stranded, and therefore ERCOT is unable to realize the full benefits of wind power, in terms of both energy pricing and CO 2 emissions reduction. These stranded megawatts have resulted in large price variations across the ERCOT zones (see Figure 5) .