Wind and Solar Developers Don’t Want To Pay Their Own Costs To Connect To The Grid
Despite bold-sounding announcements on decarbonizing America from progressive politicians and profit-seeking, government-approved monopolies, the biggest impediment to a world powered by wind, solar, and batteries is not political opposition from unwashed conservatives, it is reality.
This truth was on display in a recent article in RTO Insider, which stated that the transmission upgraded needed to connect new wind and solar facilities to the grid costs too much. The cost is so high that wind and solar developers are abandoning their projects, which is great news for Minnesota families, seniors, and businesses.
“MISO West — which includes Minnesota, Iowa, parts of the Dakotas and western Wisconsin — is again facing high system upgrade costs for interconnection hopefuls, this time from SPP studies of generator interconnections, or affected-system studies, along the seams.
SPP’s draft studies of a 2017 cycle of generation projects in MISO West recommend about $500 million of upgrades for 250 MW of projects.”
These are enormous transmission upgrade costs. For example, the Energy Information Administration estimates that it costs about $1.26 million per megawatt to build a wind facility in Minnesota, North Dakota, and South Dakota. Using this figure, it would cost roughly $315 million to build a 250 MW wind facility, meaning the cost of transmission upgrades exceed the cost of the wind project, itself.
Obviously, this has huge implications for the cost of the electricity generated from these facilities. Using the Assumptions for the Annual Energy Outlook, for the cost to build and operate a wind turbine, the levelized cost of energy from wind is about $32 per megawatt hour (MWh) without government subsidies, and the cost of wind after upgrading the transmission would be $73 per MWh, as you can see in the graph below.
It’s also important to remember that this figure does not account for the cost of “backup” power plants for when the wind isn’t blowing, utility profits, increased property taxes, or upgrades to the broader transmission system, such as the high voltage power lines built across the state as part of the CAPX202o project. After these costs are considered, the cost of wind (not considering the new transmission upgrade costs discussed above) is nearly $80 per MWh, as you can see below.
The rising cost of upgrading the grid is keeping many wind and solar projects from being built:
“Several stakeholders agreed, saying that few projects will proceed in the west at this rate and characterizing the issue as a process failure. They said part of the problem lies in SPP using the stricter network resource interconnection service (NRIS) standard to model all service requests, making upgrades costlier and unnecessary in some cases. MISO uses the more relaxed energy resource interconnection service (ERIS) standard in its affected-system modeling.
“It is a bigger issue. Everyone should be concerned about this,” Savion’s Chad Craven said. “It’s basically going to roadblock everything in the west.”
“It is extremely concerning. This is going to kill MISO West generation projects,” IPWG Vice Chair Angela Maiko said, adding that the August 2017 batch of projects will probably also be imperiled by high upgrade costs. She said the region runs the risk of never welcoming new generation unless it’s for replacement or surplus interconnection service.”
The Clean Grid Alliance, Solar Energy Industries Association and the American Wind Energy Association said recent upgrade costs have been raising renewable projects’ costs by more than 60% on average in MISO West.
A Siemens system impact study prepared for MISO in March showed that a cluster of 60 western wind generation projects dating back to 2018 and totaling 9 GW would collectively require more than $1 billion in transmission upgrades before they could interconnect.”
This reality is the biggest roadblock to Xcel Energy’s proposed “Green New Deal,” because most of the wind facilities the government-approved monopoly wants to build are in North Dakota and South Dakota.
Wind and solar promoters are attempting to defy the laws of physics, which is a science, by advocating for a grid largely based on wind, solar, and battery storage. Their plans require hundreds of billions of dollars to implement, and also requires billions of additional dollars on transmission lines to accommodate unreliable sources of energy.
None of this makes any sense. If these groups are so concerned about the environment, they should be lobbying to lift Minnesota’s ban on new nuclear power plants, demand that the electricity we already buy from large Canadian hydroelectric plants be counted as “renewable,” and advocate for technologies like carbon capture and sequestration. All of these technologies would be expensive, but they would be a bargain compared to turning our electric grid into a Rube Goldberg contraption.