“Heretic” Battles Straw Man

Energy Self-Reliant States [pdf], a flawed study on local Renewable Energy availability from the Institute for Local Self-Reliance (ISLR) found that 18 of the 50 states could not meet their electricity needs with local renewables.   In fact, no state can meet its electricity demand through local renewables without expensive electricity storage.  On a national basis, such storage would cost an estimated $13 Trillion, or over 65 times the cost of the transmission investments they oppose.

by Tom Konrad, Ph.D.

Straw Man: "Transmission is Only for Utility Scale Renewables"

Image: GE Smart Grid Scarecrow (video)

One of the study authors, John Farrell, has been promoting the study as a "Heresy on Transmission."  Rather than a heretic attacking misguided establishment shibboleths, this flawed study attacks a simplistic misunderstanding of why we need transmission.  Farrell and his co-author David Morris are either intentionally promoting this misunderstanding as a straw man, or if they simply fail to grasp the reasons behind long distance transmission’s necessity.

Their straw man is the false choice between states relying on local renewables such as PV on rooftops which supposedly would require only "minimal transmission upgrades" and far-off wind farms requiring expensive long distance transmission.  They say, for example,

[I]f Ohio’s electricity came from North Dakota wind farms — 1,000 miles away — the cost of constructing new transmission lines to carry all that power and the electricity losses during transmission could result in an electricity cost to the consumer that is about the same, or higher, than local generation with minimal transmission upgrades.

This ignores most of the benefits which would flow from new transmission lines connecting North Dakota and Ohio.  A 1,150 mile transmission line from Bismark to Cincinnati would also connect Fargo, Minneapolis, Eau Claire, Madison, Chicago, and Indianapolis running along Interstate Highway corridors (Google maps.)  It also ignores the study’s own finding that Ohio would only be able to generate 29% of the electricity it needs with local renewables. 

Incidentally, their national map shows Ohio being able to generate 33% of its electricity from local renewables, but adding up their own numbers for the renewables they identify gives 29%.  I looked closely at their numbers for only six states, so there may be other arithmetic errors as well.

The states along this hypothetical route are North Dakota, Minnesota, Wisconsin, Illinois, Indiana, and Ohio.  The study found that these states can generate the following percentages of local demand with in-state renewables:

State %Wind % Solar % Small hydro % CHP Total
North Dakota 14,000% 19% 1% 4% 14,024%
Minnesota 1,311% 24% 1% 4% 1,340%
Wisconsin 120% 22% 1% 5% 150%
Illinois 57% 17% 2% 4% 80%
Indiana 83% 18% 1% 3.6% 106%
Ohio 3% 20% 1% 5% 29%

If each of these states attempted to meet their local electricity needs with the renewables in the study, Ohio and Indiana would still need to import some electricity from other states.  Although Ohio would not need to import power from as far away as North Dakota, they would have to tap into Minnesota’s wind resources if demand were to be satisfied along this corridor.  An attempt to meet that demand with the nearest resources might look like this:

State %Wind % Solar % Small hydro % CHP Total
North Dakota 300% 2% - 2% 304%
Minnesota 150% 10% 1% 2%   163%
Wisconsin 120% 22% 1% 5%   148%
Illinois 57% 17% 2% 4%  80%
Indiana 83% 18% 1% 3%   105%
Ohio 3% 20% 1% 5%  29%

You’ll note that the total above exceeds 600% because the states with renewable energy surpluses have much lower local demand.  The magnitudes of this demand are my best guess.  Keep in mind that I did not choose this corridor to make my example work; the suggestion came directly from the transmission example in the study.

The Consequences of Timing

By the study’s own methodology, both Ohio and Illinois need interstate transmission, because they cannot generate all their renewable electricity locally.  Yet, as I will demonstrate, even though North Dakota and Minnesota would be generating electricity for export, they will often need to import renewable electricity as well.  

Using the Correlation Maximization tool on Energy Timing (note: Energy Timing has been taken down, see comment here.), I generated the best portfolio of North Dakota wind and solar farms to meet the needs of Square Butte Electric Coop, an electric utility in Grand Forks, ND.  The results are shown below:

Composition of Optimal Portfolio of North Dakota Renewable Energy:  ND Optimal Portfolio

  Site Name Type Optimal Weight Capacity Factor
1) Olga 5, ND Wind 63% 21%
2) Pickert, ND Wind 19% 38%
3) Valley City, ND Wind 18% 22%

 

Normalized Diurnal ND wind and demand.png

This combination of three wind farms represents the best fit between electric output from existing wind farms and solar sites in Energy Timing’s database, and local demand.  Even though this is the best fit, the correlation between supply and demand is only 13.2%.  Solar sites do not appear in the optimal portfolio because they do not lead to a better fit.

As you can see from the bottom graph, wind output is strongest in the morning, when demand is relatively low, and falls off in the afternoon, as demand rises.  Hence, unless North Dakota builds far more wind farms than it needs to supply local demand (an expensive proposition which could only be justified by electricity exports), they would not have enough electrify in the afternoon and early evening, when the wind typically dies down.  This would be the situation on a typical day.  On any given day, wind power is even more variable than it is on average, leading to large and frequent swings from oversupply to undersupply.

Composition of Optimal Portfolio of Minnesota Renewable Energy:  MN Optimal Portfolio

  Site Name Type Optimal Weight Capacity Factor
1) International Falls, MN Solar 37% 17%
2) Minneapolis, MN Solar 34% 20%
3) Rochester, MN Solar 23% 19%
4) Duluth, MN Solar 6% 18%

 

Normalized Diurnal MN Solar and demand

In the case of Minnesota electrical demand, solar sites turn out to be a better fit than wind sites.  In reality, if Minnesota were to attempt to meet local demand with renewable energy, a mix of wind and solar sites would be used, since wind is so much less expensive than solar.  But since solar sites are the best fit for local demand, a mix of wind and solar would produce a worse match than the 24.5% correlation we see in the scenario above.

Benefits of Transmission

We can now see how both Minnesota and North Dakota would benefit with a high capacity transmission connection between the states.  In the early morning, before the sun rises, Minnesota will not be producing any domestic renewables, so it makes sense to import electricity from North Dakota, where production is far in excess of demand all morning.  Minnesota will in turn be able to supply excess solar power to North Dakota in the afternoon before the sun gets low and cuts solar output.  

In short, even though both Minnesota and North Dakota can easily produce enough local renewable electricity for their needs, the timing of that electricity causes problems of both oversupply and unmet demand.  If we build transmission connecting states regions, these problems are reduced, and less storage is needed to make up the difference.

As we increase the interregional connections, we will be able to bring in power from farther afield that better meets demand.  For instance, both these states don’t have enough local renewables in the evening, even when combined.  The worst period is just around dusk, from about 5pm to 8pm Central time, before the wind begins to pick up at night in North Dakota.  But in the sunny Mojave Desert of southern California, the sun is still up (it’s two hours earlier, Pacific Time), and large Concentrating Solar Power (CSP) plants can use relatively cheap thermal storage to continue producing power for hours after sunset.

We can also see that both North Dakota and Minnesota typically have spare production capacity in the summer months, so they could export electricity back to the Southwest during these months, when Southwest electricity demand peaks due to air conditioning loads.

As we increase the length of regional transmission networks, each state along the path gains, both as an electricity exporter and as an importer depending on the season and weather conditions.  Ohio does not need to pay for giant transmission lines from North Dakota to import which "could result in an electricity cost to the consumer that is about the same, or higher, than local generation."  North Dakota, Minnesota, Wisconsin, Illinois, and Indiana would also benefit from such a line, and all could be asked to contribute.

Costing Storage vs. Transmission

The study’s authors also invoke electricity storage to "solve" the problem of timing, saying

Some renewable fuels, like sunlight and wind, are variable.  Thus, the estimates, especially for wind, assume a significant level of storage or on-demand distributed generation.

Unfortunately, they make no attempt to account for the price tag of such storage.  They state only, 

This report does not examine storage and its implications, but in our analysis of variable renewable energy potential, we assume that sufficient storage is available.

"On-demand distributed generation" could come from natural gas or biomass.  Renewable generation relies on the availability of the natural resource, few of which can be stored.  Even incremental hydropower is typically not on-demand, because it is usually the result of adding generation to existing dams and comes with obligations to maintain flow rates.

Biomass based power is typically baseload, not on-demand.  Furthermore, the study authors explicitly rule out the large scale use of biomass for electricity because they expect the amount of biomass-based electricity to be "modest."  Even if large scale, on-demand distributed biomass based generation were available, it would only be available in those states with a large biomass resources.  See the map below.

Natural gas is an incomplete response to climate change in that it is a fossil fuel, may not even be available in the necessary quantities, and must be imported by the vast majority of states.  What is the point in pushing for reliance on locally generated renewable electricity if it only increases our dependence on imported natural gas which may not be available and produces greenhouse gas emissions? 

Given the not only daily, but seasonal mismatches between local electricity production and demand, states which are locally self-sufficient in electricity would have to invest in a month or more worth of storage.  While electric vehicles may be able to provide some daily or hourly storage, they will not be available for seasonal electricity storage, since the vehicle owners will need to drive them, and so cannot keep them fully charged for months or even days on end.

The cheapest large scale electricity storage solutions, (Pumped Hydropower, Compressed Air Energy Storage, and Molten Salt Thermal Storage) typically cost $10 to $50 per kWh of storage.  Unfortunately, all three of these options are limited in where they can be located, so restricting transmission will also restrict the use of these cheaper forms of storage.  The cheapest battery and flow battery storage technologies cost about $100 to $150 per kWh.  To be generous, I will assume that all states can build as much electricity storage as they want at $50 per kWh, or $50,000 per MWh.  I will also assume that geothermal, hydropower, combined heat and power, and efficiency gains will mean that solar and wind will need to supply only 50% of our current electricity usage. 

According to the Energy Information Administration, total electricity production in 2007 was 4,156,745 thousand MWh.  An average monthly production was thus 346,395,000 MWh, and the cost of a month’s worth of national electricity storage to meet half of a month’s demand would be $8,665 Billion under the assumptions above.  In contrast, the ILSR study states that "FERC, Congress, and environmental groups… rush to accelerate the construction of a new $100-$200 Billion interregional transmission network."  

If such a network cost $200 Billion, and reduced the need for storage by only 10%, then it would have paid for itself more than eight times.  Given less conservative (and I think more realistic) assumptions of reducing the need for storage by 50%, and a per MWh cost of storage of $75,000, a regional transmission network would pay for itself in reduced storage needs by 65 to 1.

Conclusion

To me, 65-to-one, or a savings of approximately $13 Trillion, seems worth the price of stringing wires.  For comparison, $700 Billion has been spent on the war in Iraq since 2001.  In other words, the ILSR study is suggesting that we pay for eighteen wars in Iraq in order to avoid building an interregional transmission network, costing about as much as we spent in Iraq in 2008. 

In fact, the price for local self-reliance on renewable energy would likely be higher.  Thirteen trillion dollars does not include the cost savings that the report’s authors tried to address: Transmission allows us to exploit less expensive renewable generation.    Furthermore, the variability of both wind and solar generation can be vastly reduced by combining the output of dispersed wind and solar farms.  Less variability reduced the need for costly spinning reserves to stabilize the grid if wind power suddenly drops or a cloud passes above a solar farm.

Not all self-styled heretics are fighting a just cause against an oppressive consensus.  To the extent that a consensus exists in favor of an improved national transmission grid, it is based on sound science and economics.  It is unfortunate that so many environmentalists are seduced by the mirage of renewable energy self-reliance.

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10 Comments

  1. D_Lane said

    Very convincing Tom. What is the motivation of Farrell and his co-author to argue against transmission? I’d also be curious to see their response to you.

  2. [...] now Tom Konrad at the Clean Energy Wonk blog who takes a long hard look at the price of local renewable energy self-reliance as conceived [...]

  3. Tom,

    I appreciate you response to our report and your analysis of storage versus transmission. Thanks for engaging us.

    On the subject of renewable energy variability and transmission, your analysis looks interesting, but I’m stymied by the lack of labels on the charts and the fact that I can’t seem to access the Energy Timing website. I’ll address the basic argument that the wind and sun don’t blow or shine at the right time to meet demand in various places and thus we need transmission to smooth variability.

    Variability is the transmission advocate straw man. Right now, renewables make up a mere fraction of electricity generation in most states, on most days, and even at most hours of the day. Even with the penetrations of wind or solar projected for most states by 2025 (25-30%), there’s still plenty of backup from conventional power sources (like natural gas) to fill the gap. And with the major gas finds in the U.S. of late, it seems odd to fearmonger about imports.

    And in the one state that has actually made an engineering analysis of the electric grid – Minnesota – it was discovered that getting to 25% renewables could be done at a fraction of the cost of new high voltage transmission by dispersing 10-40 MW wind projects across the state on the existing grid.

    In other words, states should be examining ways to maximize their existing infrastructure before investing in a new, high-voltage and more costly transmission network.

    On that subject, cost is much more complex than the simplistic “month of storage” v. national grid. First, I’ve not heard anyone suggest that the transmission superhighway proposal is sufficient for a 100% renewable scenario. In fact, I believe that it was part of a 20% “wind by 2030″ report, so the comparison you make appears rather disingenuous.

    Second, we have years before we bump up against the tradeoff between high-voltage interstate transmission and storage. Right now, renewables are such a small part of the mix that storage is unnecessary. The smart grids you dismiss have already shown promise to reduce peak demand by 20% in selected pilots. That extends the time horizon for significant storage. We don’t know the price of storage because we aren’t ready to buy it.

    Third, cost in this debate never looks beyond the electricity system, but nobody but us wonks are so shortsighted. When 10 East Coast governors wrote a letter to Congress to register their concern with federal preemption of transmission planning, it was in large part because they wish to exploit their own renewable resources and the attendant economic benefits. For them, it’s not just about the cheapest kilowatt hour but also about the overall benefit to their citizens.

    Getting to our ultimate goal of a fully renewable electricity system may require some new transmission. No question. But when the proposed new transmission superhighway may be orphaned by expanding smart grids, existing grid capacity, and states with a legitimate interest in developing their own renewable energy resources, it’s should be heretical to suggest it’s the only option.

    • Tom said

      John,
      Red is production and green is demand on the Energy Timing graphs. I don’t know why their site is down, but I’ve sent them an email.

      Regarding the national grid vs. seasonal storage, I was arguing within the framework of your study… you were talking about 100% local renewables, so I looked to see what it would cost. When I said “natural gas imports” I meant imports into those states that don’t produce natural gas locally. Why do you prefer importing natural gas to importing electricity?

      Transmission, in general, reduces the need for backup generation, even without resorting to renewables. Because demand peaks at different times in different places (note the different demand shapes (green) in neighboring MN and ND above. Transmission allows demand to be aggregated, so the overall difference between peak and trough is a reduced as a percentage of overall demand.

      Saying that “we have plenty” of backup generation for renewables in the short term is misleading. As someone who has filed expert testimony in resource planning cases, I can tell you from first hand experience that growing penetration of air conditioning is causing peak demand to grow in many states even faster than overall demand, and so more peaking capacity is something that utilities often need. Wind does not help much with this because wind is often weakest on the hottest days, and utilities only grudgingly will credit it with a 10% capacity factor. Transmission does help, because the hottest days happen at different times in different regions of the country. Solar also helps, but is far, far more expensive than transmission.

      Furthermore, our existing renewables *do* put a strain on current backup capacity, causing it to run less efficiently than it would if it were only needed to compensate for fluctuating demand. See: http://knowledgeproblem.com/2009/11/16/reduced-air-emissions-due-to-wind-power-not-as-much-as-you-might-think/

      In other words, even if we have enough capacity to backup near-term renewable supply, the lack of transmission and small balancing areas make the fluctuations more severe, and put strains on gas turbines, reducing the system benefits of wind and solar. See also:
      http://www.altenergystocks.com/archives/2009/04/our_undiversified_wind_portfolio_1.html

      I did not see in your report the source of your $100-$200 Billion cost number, but nor did I assume that it was able to compensate for all the needed storage that would be required by your 100% local renewables proposal: I used two assumptions: that it would reduce the need for storage by 10% or 50%. With the 10% number, I still found that transmission was 4x more effective than storage, and I did not include the benefits of transmission that I outline above in this comment.

      Regarding the local economic benefits of renewables, most of these flow from the economic benefits of *inexpensive* renewables, and (especially) energy efficiency. See:
      http://www.altenergystocks.com/archives/2009/07/not_all_green_jobs_were_created_equal_1.html
      I strongly agree with you that we should pursue all local energy efficiency and combined heat and power opportunities that are available, since these are very cost effective.

      However, your emphasis on local renewables, especially rooftop PV means that low resource states would be pursuing high cost renewables. Sure, each MW of rooftop PV creates lots of local jobs, but this is simply because the level of spending per MW is gigantic. Why not just use a fraction of that amount to purchase cheap wind and transmission, and use the rest to create jobs by investing in local mass transit. If you follow my link above, you’ll see that each $1M spent on transit improvements creates 20.1 jobs, while each $1M spent on Solar or Wind creates about 14 jobs. So, if you have $1M to spend, and want electricity and jobs, you can spend $300K on cheap, out of state wind (4 jobs elsewhere) and $700 on local mass transit (14 local jobs), or you can spend the whole pile on local solar and get the same amount of electricity and local jobs, but no mass transit, and no jobs elsewhere. I don’t call that a local economic benefit.

      • John Farrell said

        Tom,

        I wish that governments thought about public spending the way you illustrate in your last paragraph. If only we were so thoughtful we might have incentives for renewable energy that didn’t require odd tax equity partnerships but instead focused purely on per kWh payments.

        And I think that illustration of perverse policy, at the heart, is the source of our disagreement.

        Renewable energy presents a new paradigm. It’s available virtually everywhere. In many cases, it does not have the same economies of scale as large fossil fuel thermal generation. From a standpoint of generation cost, there’s little to hold us to the paradigm of large, centralized power plants and long distance transmission. And that difference also means an opportunity for communities with renewable energy resources to benefit economically rather than just getting clean energy.

        As you have illustrated effectively, this new paradigm doesn’t eliminate the need for a grid or transmission. Nothing you say is wrong. Transmission can address variability issues, whether season or daily. Transmission can address resource inequalities. Transmission can alleviate the need for backup generation or storage. As we note in our report, “The focus should be on upgrading the transmission, subtransmission and distribution systems inside states.”

        If we had technocrats like yourself in charge of the electric grid, I would have more optimism about the system being structured in a way that maximizes the benefits and minimizes costs, with transmission as a tool in designing that system. You are obviously very thoughtful about the cost tradeoff between a wind/solar mix, storage, and transmission. But the debate in the broader policy community is rarely so nuanced.

        In transmission certificate of need proceedings, utilities are not even conducting alternatives analysis to see what other options exist or if they are less expensive. (See CAPX in Minnesota, or PATH in the Northeast, for example). In the Congress, legislation (by Senator Reid and Bingaman) would preempt state authority to review transmission that is purportedly for renewable energy, obliterating the process for alternatives analysis. The folks building transmission lines get a bonus return on investment thanks to the Energy Policy Act of 2005, but none of the other options (from conservation to demand response to energy efficiency to distributed generation) do. Even the renewable energy incentives (PTC, ITC, etc) are only available as tax credits rather than production incentives that would allow cities, counties, schools, and others to compete to produce renewable energy, especially in areas where their utilities are unwilling to move ahead.

        The point is that we probably agree on the technical value of transmission as an element of an effective toolbox for maximizing renewable energy development and that it has a place alongside distributed generation, demand management and other tools to deliver reliable, clean power (especially when it is the most cost effective option).

        But I believe you underestimate the political power of transmission. Rather than being a straw man, transmission is the 800 pound gorilla. In the advocacy community and in Congress, transmission from hot spots of renewable energy to demand centers is the conventional wisdom, despite plenty of examples where – even on the narrow metric of cost – it is not the most effective option.

        Our report, Energy Self-Reliant States, does not prove that energy self-sufficiency is possible or desirable for every state (it wasn’t meant to and couldn’t if it wanted to). But it does illustrate that there are alternatives to the conventional wisdom, that increasing energy self-reliance may pay dividends in clean energy and the economy, and that our policy playbook should – as you illustrated – have as many options as the technical one.

      • Tom said

        John,
        Thank you for your kind words regarding planning.

        It sounds like your current position on transmission is that it has benefits for both local and national renewables, but that it is receiving too much political support at the expense of local renewables, and that federal decision-making on transmission is a step in the wrong direction, because federal decionsion-making will be worse that the state based decision-making we currently have.

        As I believe I demonstrated in my article, the greatest benefits of transmission come from a national grid: it is the ability of transmission to extend across weather regimes which allows long distance transmission to stabilize variable renewables. We currently only have a very weak national grid in large part because transmission decisions are taken at a state level, and because no one state can capture the global benefits of transmission, we have seen massive chronic underinvestment.

        EPACT2005 had more (but not enough) for transmission than it had local renewables, but the much larger ARRA (stimulus) had large support for energy efficiency and the smart grid technologies we both advocate, and these investments dwarfed those in long distance transmission. Hence, I think we can say that the current administration is more likely to get energy policy right than the previous one. Some local governments are better, and some are worse, but, no matter how competent, they lack the ability to decide what is best for the nation as a whole because their remit is local.

        In order to plan a functional national grid, we need to plan at a national level. Local planning gave us the collection of weakly connected local grids we currently have. Our lack of a national grid acts as a barrier to renewable energy penetration. I don’t think that local planning can fix the problem it created, nor do I agree that “The focus should be on upgrading the transmission, subtransmission and distribution systems inside states.”

        The focus has to be on a national grid, and the decisions (however flawed) to create national grid have to be taken at a national level because the benefits of a transmission line flow to all the states along the route… if each state sizes transmission to suit only its internal funding ability and internal benefits, we will continue with a transmission like the one we have now: undersized, under invested, and delivering only a fraction of the potential benefits.

  4. Tom said

    I just received this email back from Ted Ladd, who ran the Energy Timing site:

    Tom,

    I pulled the site down because I didn’t think anyone was using it!

    I’ve merged the ideas from EnergyTiming with HOMER Energy, based in Boulder, whose software is more powerful. We hope to add the portfolio optimization piece into the core product eventually.

    In the interim, I urge you to try the HOMER software (it’s currently free). While it lacks outside data that EnergyTiming encapsulated, it does have better capabilities for analyzing energy flows.

    Ted Ladd

    Chief Operating Officer

    HOMER Energy

  5. [...] Renewable Energy ·Tagged anerobic digestion, electricty, manure A commenter on my recent pro-transmission article questioned some statements of mine about the availability of renewable electricity from cow [...]

  6. [...] be only 50% (and considerably lower if any of these things fail to materialize, especially the diversifying benefits of a robust national grid.)   This upper limit (and the fact that only a fraction of wind power is likely to be [...]

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