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Drivers of the New
Transmission System

    CLE International
   Ritz Carlton, Denver

    March 19, 2010
   by: Ron Mille...
RE Project Ingredients
• Environmentally-permittable
• Technically-feasible
• Financially-viable

… and the linchpin of an...
Market Drivers
• U.S. electricity demand, coal
    consumption, & electricity
    prices
• Renewable resource location
• F...
U.S. Electricity Demand, Coal
Consumption, & Electricity Prices
• Key electricity consuming areas:
    Texas, California, ...
Electricity Consumption




                                                                        High energy
          ...
Coal Consumption




                                                                        High coal,
                  ...
Average 2008 Residential
Electricity Price in U.S.


                                                                     ...
U.S. Residential Electricity Price
 Historical Trend




Growing energy use/price, even with DSM/energy efficiency
       ...
Renewable Resource Location
• Wind in Intermountain / Great
   Plains area, California
• Solar in desert Southwest
• Geoth...
U.S. Wind Resources




                                                                 Source: NREL




    Copyright© 2...
U.S. Wind Potential




    Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to
    the...
U.S. Solar Resources




    Source: NREL

     Copyright© 2010 Ronald L. Miller. Material can be shared or copied with at...
U.S. Geothermal Resources




  Source: NREL

     Copyright© 2010 Ronald L. Miller. Material can be shared or copied with...
Federal Direction
• Ensure that 10 percent of the nation's
    electricity comes from renewable
    sources by 2012 and 25...
Renewable Portfolio Standards




    Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution ...
Price Convergence




    Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to
    the c...
Grid Use
• Grid built to handle transmission &
    distribution needs for a utility’s service
    territory with ties to o...
Current U.S. Grid




       Source: Global Energy Decisions, LLC, June, 2008
    Copyright© 2010 Ronald L. Miller. Materi...
National Extra High-Voltage
Overlay Proposal




    Copyright© 2010 Ronald L. Miller. Material can be shared or copied wi...
Transmission Issues
• According to North American Reliability
    Council new generation supplies are
    forecast to outp...
Transmission Solutions
• Texas approved a $4.9 billion transmission
    system upgrade moving power from West
    Texas to...
Our Problem




High energy demand
& prices
Renewable resources
         Copyright© 2010 Ronald L. Miller. Material can be...
One Possible Future Solution




High voltage transmission
High energy demand & prices
Renewable resources
          Copyr...
Value
• North / South grid allows leveraging
    natural variability of wind throughout
    Great Plains and complementary...
Kinder Morgan Rockies Express




• Natural gas pipeline from Cheyenne, WY to
    Clarington, OH
• Limited “off-ramp” to d...
Kinder Morgan Northeast Express




Natural gas pipeline Clarington, OH to
 Linden, NJ
       Copyright© 2010 Ronald L. Mi...
Summary
• Environmental concerns are leading
    generation source changes
• Renewable resources need connections
    to e...
Summary, cont’d.
• Choice between less-productive, local
   renewable resources vs. highly-productive
   resources connect...
Summary, cont’d.
• To harvest best resources with economies
    of scale, national extra-high voltage
    transmission sys...
Contact Information

Ron Miller, P.E.
303-723-5465
303-748-3441 cell
ronmiller74@comcast.net




      Copyright© 2010 Ron...
Questions and Answers




 Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to
 the cop...
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Drivers Of The New Transmission System 031910

  1. 1. Drivers of the New Transmission System CLE International Ritz Carlton, Denver March 19, 2010 by: Ron Miller, P.E.
  2. 2. RE Project Ingredients • Environmentally-permittable • Technically-feasible • Financially-viable … and the linchpin of any utility-scale project is TRANSMISSION of energy to the end- user market Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 2
  3. 3. Market Drivers • U.S. electricity demand, coal consumption, & electricity prices • Renewable resource location • Federal direction • State renewable portfolio standards • Price convergence • Transmission use and constraints Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 3
  4. 4. U.S. Electricity Demand, Coal Consumption, & Electricity Prices • Key electricity consuming areas: Texas, California, Midwest • Key coal consuming areas for electricity: Texas, Midwest, Southeast • Highest prices for electricity: Northeast, California, Texas These key criteria define the “target market” for future renewable energy destinations Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 4
  5. 5. Electricity Consumption High energy demand areas Source: National Priorities Project Database Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 5
  6. 6. Coal Consumption High coal, NOX, SOX, CO2 Source: National Priorities Project Database Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 6
  7. 7. Average 2008 Residential Electricity Price in U.S. High energy price areas Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 7
  8. 8. U.S. Residential Electricity Price Historical Trend Growing energy use/price, even with DSM/energy efficiency Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 8
  9. 9. Renewable Resource Location • Wind in Intermountain / Great Plains area, California • Solar in desert Southwest • Geothermal in Nevada, California • Best resources tend to be in more remote locations, not near major population centers, areas of highest coal use, or areas with highest electricity prices Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 9
  10. 10. U.S. Wind Resources Source: NREL Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 10
  11. 11. U.S. Wind Potential Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 11
  12. 12. U.S. Solar Resources Source: NREL Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 12
  13. 13. U.S. Geothermal Resources Source: NREL Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 13
  14. 14. Federal Direction • Ensure that 10 percent of the nation's electricity comes from renewable sources by 2012 and 25 percent by 2025 • Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050 • Reduced GHG in tandem with retiring coal plants opens a window for alternative sources for energy mix, if it can be delivered to the end-user market Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 14
  15. 15. Renewable Portfolio Standards Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 15
  16. 16. Price Convergence Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 16
  17. 17. Grid Use • Grid built to handle transmission & distribution needs for a utility’s service territory with ties to only adjoining utilities • Never intended to handle cross-country transmission of energy • Transmission investment and rate of return have historically lagged generation Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 17
  18. 18. Current U.S. Grid Source: Global Energy Decisions, LLC, June, 2008 Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 18
  19. 19. National Extra High-Voltage Overlay Proposal Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 19
  20. 20. Transmission Issues • According to North American Reliability Council new generation supplies are forecast to outpace transmission, constraining wind development with a planned 145,000 megawatts of capacity over the next 10 years • Generation growth over 10 years: 21% • Transmission line growth over 10 years: 10% with 1,700 circuit miles Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 20
  21. 21. Transmission Solutions • Texas approved a $4.9 billion transmission system upgrade moving power from West Texas to major population centers. Capable of transmitting 18,500 MW of wind power. Cost: $4/month/retail customer • National upsurge in transmission investment due to Congressional action to increase transmission project allowed rate of return Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 21
  22. 22. Our Problem High energy demand & prices Renewable resources Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 22
  23. 23. One Possible Future Solution High voltage transmission High energy demand & prices Renewable resources Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 23
  24. 24. Value • North / South grid allows leveraging natural variability of wind throughout Great Plains and complementary solar, just as a portfolio of different stocks lowers overall volatility • East / West grid allows delivery to the target markets with greatest value to producers and producing states Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 24
  25. 25. Kinder Morgan Rockies Express • Natural gas pipeline from Cheyenne, WY to Clarington, OH • Limited “off-ramp” to deliver gas to ultimate destination, connecting market with discounted gas prices (CO) to one with premium prices (East Coast) Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 25
  26. 26. Kinder Morgan Northeast Express Natural gas pipeline Clarington, OH to Linden, NJ Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 26
  27. 27. Summary • Environmental concerns are leading generation source changes • Renewable resources need connections to end-user electric markets which offer higher prices to spur renewable growth • Price convergence will multiply the need for transmission to accommodate renewable energy generation • Energy storage will dampen RE variability, adding greater reliability and value to its generation Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 27
  28. 28. Summary, cont’d. • Choice between less-productive, local renewable resources vs. highly-productive resources connected to high-demand, high-priced markets • Currently, intermediate states can derail renewable generation and its multi-state transmission to demand centers • Need to incent the intermediate states to gain from transmission, not just producer and end user Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 28
  29. 29. Summary, cont’d. • To harvest best resources with economies of scale, national extra-high voltage transmission system similar to interstate highway & natural gas pipeline system is needed • Combine different RE technologies whose energy production profiles are complementary to improve transmission asset utilization and project rate of return Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 29
  30. 30. Contact Information Ron Miller, P.E. 303-723-5465 303-748-3441 cell ronmiller74@comcast.net Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 30
  31. 31. Questions and Answers Copyright© 2010 Ronald L. Miller. Material can be shared or copied with attribution to the copyright holder. http://www.linkedin.com/pub/ron-miller-p-e/4/842/580 31

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