Richard-Caperton

							Electric Transmission and
 Economic Opportunities




      Richard W. Caperton
   Senior Energy Policy Analyst
 Energy Opportunity at the Center
     for American Progress
• Clean energy is a success story in tough
  economic times.
• Now we need to scale everything up.
• There are three things that will grow the
  clean energy economy
  – Market demand
  – Financing
  – Infrastructure
   Transmission Does More than
           Carry Power
• Enables new
  generation
• Improves reliability
• Reduces congestion
  and improves market
  conditions
• Puts people back to
  work
           Transmission Enables New
                  Generation
"In order for renewable to replace a meaningful amount of our imported
    oil, we need a national electricity transmission system to carry this
    electricity be it wind, solar, biomass or other alternatives." - T. Boone
    Pickens, Texas oil magnate

•   The U.S. DOE has identified transmission limitations as the greatest obstacle to realizing the
    enormous economic, environmental, and energy security benefits of obtaining at least 20% of our
    electricity from the wind.
•   A poll conducted at the WINDPOWER 2008 Conference and Exhibition in June in Houston, Texas,
    found that participants saw transmission as the largest roadblock to the continued development of
    wind energy in the U.S.
•   Almost 300,000 MW of wind projects, more than enough to meet 20% of our electricity needs, are
    waiting in line to connect to the grid because there is inadequate transmission capacity to carry
    the electricity they would produce.

The DOE 20% wind scenario would create over 500,000 jobs and $450 billion in economic
    impact by 2030, including billions in tax revenue for rural landowners and farmers.
  Transmission Improves Reliability
Base-Case Estimation of Cost of Power   Base-Case Estimate of the Cost of Power
Interruptions by Customer Class             Interruptions by Type of Interruption
    Transmission Improves Reliability
“Today, our grids are antiquated, fragile, and vulnerable to cascading
   failure. Power outages and defects in the current grid system cost U.S.
   businesses more than $120 billion dollars a year. It has to be upgraded
   anyway." - Vice President Al Gore

•   The 2003 blackout in the Northeast U.S. and Canada caused an estimated $7-10 billion in
    economic losses.
•   An analysis of SPP construction of two transmission projects found that the projects would have
    “reduced loss benefits” of nearly $100 million.
Transmission Reduces Congestion
 and Improves Market Conditions
    Transmission Reduces Congestion
     and Improves Market Conditions
“The AWC Project will reduce LMPs, especially in the “EMAAC” region of
   PJM, compared to the radial alternative. These price impacts would
   save PJM customers approximately $126 million per year or $1.35
   billion over 20 years.” - The Brattle Group
•    The DOE identified New England in 2006 as a Congestion Area of Concern due to high electricity
     price differentials across the region and congestion-related reliability problems in Massachusetts,
     and Connecticut. However, congestion continues to decrease due to efforts and achievements on
     several fronts: specifically with energy efficiency reducing total loads. In 2009, New England was
     no longer a Congestion Area of Concern; but New England still faces a potential resource shortfall
     under extreme load conditions over the next few years.
•    The DOE continues to identify San Francisco, Seattle, Portland area as a Congestion Area of
     Concern; and the DOE continues to identify the San Diego – Los Angeles areas as a Critical
     Congestion Area. The New York, Philadelphia, Baltimore, and Washington D.C. area are also
     listed as a Critical Congestion Area according to the DOE.
•    The Figure illustrates that PJM’s top 20 congestion-causing constraints were responsible for 87%
     of PJM’s total congestion costs in 2007.
     Transmission Construction Puts
          People Back to Work
Pilot projects from the Rapid Response
    Team on Transmission:
•   Oregon and Idaho: 500 jobs, 300 mile long,
    500 kV transmission line
•   Wyoming and Idaho: 1,200 jobs,1,150 mile
    long, high-voltage transmission
•   Minnesota and Wisconsin: 1,650 jobs, Double-
    circuit 345 kV transmission line, and single
    circuit 345 kV line.
•   Oregon: 450 jobs, 210 miles of 500 kV
    transmission line
•   New Mexico and Arizona: 3,408 jobs, two 500
    kV lines
•   Pennsylvania and New Jersey: 2,000 jobs,
    145 mile long 500 kV, and several 230 kV
    lines
•   Wyoming, Utah, and Nevada: 1,500 jobs, 700
    mile long 600 kV line
     Transmission Construction Puts
          People Back to Work
“We want to spend a fair amount of money investing in a new smart grid.
  That is, the ability to transmit across high-tension wires in the minds
  of most people in the public, or underground in these wires, wind and
  solar energy. You can't do that now. That would create tens of
  thousands of new jobs, high-paying jobs.” Vice President Biden

•   An AWEA report analyzes that a SPP proposal that costs $1.1 billion in transmission expansion in
    Kansas, Oklahoma, and Texas would create 7,475 transmission jobs and $962 million in
    economic output.
•   A report by the University of Southern Maine analyzed a 2008 proposal by Central Maine Power
    Company that would cost $1.5 billion and be implemented over three years. The project would
    result in 2,100 indirect and direct jobs in Maine. The project would result in $242 million in
    wages and salaries, and increase Maine’s GDP by nearly $300 million over four years.
•   The American Transmission Company (ATC) recently completed a large scale project (353 kV)
    and a small scale project (138 kV) in Wisconsin and Minnesota. The small scale project generated
    42.5 jobs for every mile and had a $6 million per mile total economic impact. The large scale
    project generated 11.6 jobs for every mile and has a $2.1 million per mile total economic
    impact.
        Thank you!


   www.americanprogress.org
rcaperton@americanprogress.org
        1-202-741-6284