• DOE Estimates $17 to $34 Billion Needed for Renewable Transmission in the West
  • March 19, 2010 | Authors: William "Bill" R. Derasmo; Kevin C. Fitzgerald; Peter S. Glaser
  • Law Firm: Troutman Sanders LLP - Washington Office
  • On February 24, 2010, the Department of Energy’s (“DOE”) Ernest Orlando Lawrence Berkeley National Laboratory (“Berkeley Lab”) released their report Exploration of Resource and Transmission Expansion Decisions in the Western Renewable Energy Zone Initiative.  The analysis found that $22-$34 billion is needed to build transmission infrastructure in order to meet the West’s 33% renewable energy target.  However, costs could be as low as $17 billion with a free trade system of renewable energy credits in the region.  The Berkeley Lab also estimated that the total cost for the Western Interconnection to upgrade transmission infrastructure to be $89.5-$340 billion.

    The Berkeley Lab study was conducted as part of the Western Renewable Energy Zones (“WREZ”) initiative, which was co-managed by the Western Governors’ Association (“WGA”) and the DOE.  The Berkeley Lab said their findings were not a stand-alone model; instead, the Berkeley Lab calls their report a screening tool for identifying areas to research in order to reach the 33% annual load from renewable energy by 2029.  The analysis examines how decisions about which renewable sources are chosen and how transmission lines are expanded are affected by changes in policies and several other uncertainties like bus-bar costs and renewable energy credit allocation.

    The Berkeley Lab found that wind energy was the largest source for renewable energy procured, representing 38%-65% of all renewable energy.  While solar energy was usually the second largest source of energy procured at 14%-41%, there were times when solar energy exceeded wind when solar thermal energy was used to reduce costs in relation to other resources.  The analysis also noted that policy and economic decisions, particularly how tax credits are applied, greatly influence how wind and solar will develop.  Meanwhile, biomass, geothermal, and hydropower were found to represent only 16%-23% of renewable resources.

    While wind was often the cheapest available resource, it also had the lowest capacity value on average.  Solar had the highest capacity value, and the Berkeley Lab concluded that an increase in solar energy would alleviate transmission demand.  In general, costs in the Southwest were moderate due to the abundance of high-quality solar power and select areas of high-quality wind.   The lowest cost for renewables in the West was located in the northern Rocky Mountain regions, while the Pacific area produced the highest cost for renewables.

    In terms of transmission, the Berkeley Lab noted that while there are some transmission lines over 800 miles, most are relatively short.  The average transmission line ranges from 230-315 miles.  The report found that the availability of high-voltage, direct-current lines is one of the large factors affecting renewable resources.  Additionally, the longest lines are more prevalent if they are low-cost, 500-kV HVDC lines, rather than alternating current wires.
    The Berkeley Lab’s full analysis on estimated costs for renewable transmission in the West is available at http://eetd.lbl.gov/EA/EMP/reports/lbnl-3077e.pdf.