Center for American Progress Announces Report on Offshore Wind Industry in USA

In a recent report on the permitting and financing challenges to the U.S. offshore wind industry, the Center for American Progress identified the Atlantic Wind Connection as a solution to many of these challenges that threaten to prevent domestic offshore wind from becoming a reality.

The report had this to say about the Atlantic Wind Connection project:

Transmission and grid connection issues

Of course, all the money in the world can’t make offshore wind a reality if the power system isn’t ready for it. This means we need to upgrade existing grid connections and build new transmission to handle new wind power.

The simplest way for a single offshore wind farm to connect to the electric grid is to build a line from the project directly to the shore. But this will quickly prove inefficient as more and more projects come online. Each of those connections costs many millions of dollars, and they don’t necessarily connect to the most robust parts of the onshore grid.

That’s why the most innovative project in this space is the Atlantic Wind Connection mentioned earlier. A better way to approach the interconnection challenge is to build one offshore transmission line that’s properly planned in the context of the existing grid. Then, each project would easily tie in to the line, saving all of the money from building a line to the shore.

This approach will cost billions of dollars, but the benefits will outweigh the costs. Building the Atlantic Wind Connection transmission line will cost about $5 billion, roughly equivalent to the cost of building single connection lines for each individual offshore wind turbine. But significant associated benefits make the single transmission line far more desirable.

For instance, having the transmission already in place makes it much easier for offshore wind developers to build projects because they won’t have to independently plan for grid connections. And having a simplified transmission connection will encourage the development of local wind manufacturing, which will also reduce project costs and increase local economic development.

These benefits are real, and they add up quickly. A Brattle Group study notes that “streamlined permitting and increased scale that allows local manufacturing and sourcing will reduce total offshore costs by approximately 20 percent.”

Finally, all new transmission, onshore or offshore, contributes to the robustness of the existing transmission grid, which lowers power prices for all consumers. The Atlantic Wind Connection project will reduce transmission congestion and increase power flows, which Brattle estimates will save consumers hundreds of millions of dollars over its lifetime.

There are significant planning and permitting challenges facing the Atlantic Wind Connection, however. FERC recently approved an “incentive rate” for the project, which provides a slightly higher rate of return for investors. This recognizes the risky nature of this first-of-its-kind project.

The next step for the developers is to get the project approved by PJM Interconnection, which manages the transmission grid in the mid-Atlantic region. PJM is independently managed under rules set by its members, who include power generators, utilities, and other market participants. PJM’s existing rules work against an independently owned large-scale project like the Atlantic Wind Connection. But there are opportunities for stakeholders to encourage PJM to adopt the plan, such as indicating that they will build new wind projects offshore if the line is built. A commitment to use the project would make approval much more likely.

(atlanticwindconnection)

[mappress]

Source: atlanticwindconnection, June 06, 2011