Influential Study Reveals a Complicated Story

By Richard Garrett, Jr.
Your voice for conservation at the Wyoming State Legislature

WYOMING GOV. MATT MEAD RECENTLY ANNOUNCED that by working with state agencies, industry, legislators, and environmental groups he intends to develop a state energy policy.

The governor has pointed out, quite rightly, that absent a national energy policy, Wyoming must chart a path forward that is balanced and proactive, one that anticipates how the state’s abundant energy portfolio will be administered while protecting other critical natural resources including air, water, and wildlife.

Most of the electricity generated in Wyoming is not used here — it is exported and used in other western states, including California and Nevada.

As Wyoming’s governor works toward a state energy policy, the influential Western Electricity Coordinating Council has released a comprehensive study on energy generation and transmission in the western United States.

This study is sure to play an important role in the governor’s energy policy.

The objective of this analysis is to offer decision makers detailed information on how best to meet growing energy demands in the West, reliably and affordably, through the delivery of energy that, ideally, would have a smaller carbon footprint.

Does Wyoming Wind Energy Make Economic Sense?

Some Wyoming officials have asserted that the WECC study conclusively demonstrates that Wyoming’s wind resource, when coupled with large transmission projects, makes economic sense.

A close reading of the study reveals a much more complicated story.

For one thing, many of the study’s conclusions are contingent upon a very big “if” — that is, they are only potentially predictive IF there is some sort of new cost added for emitting CO2 (a carbon tax, for example).

Under one scenario, the study suggests that if an “adder” of $30-per-ton of produced CO2 was tacked on to the cost of coal-fired electricity generation, the result would be the retirement of most if not all of the coal-fired power plants in the state.

In turn that would mean 3,000 mw of generation would have to be replaced with any number of alternatives including renewables (which in Wyoming, for the foreseeable future, means wind), natural gas, geothermal, biomass, nuclear, or some kind of advanced coal technology.

An adder would certainly make wind energy more competitive in the marketplace, but it would also mean that natural gas producers and utilities that use natural gas to fire electrical generation would look hard at developing natural-gas-powered generation located more closely to where the energy is used.

(In fact, Rocky Mountain Power, Wyoming’s largest electrical utility, has repeatedly said that if it develops natural-gas-fired generation it will almost certainly be located more centrally in its system and not in Wyoming. One reason for this is the company believes natural gas is a more efficient source of energy when it is burned at lower altitudes than are generally found in Wyoming).

Under another scenario, the study attempted to look at how wind energy resources, located far from load (demand) with large-scale transmission projects tying them to market, might be competitive with a distributed model (where renewables – primarily solar – are located more closely to demand).

This is a scenario of particular interest to Wyoming since the state has, by all accounts, a world-class wind-energy resource but not much demand within the state to use it.

Some in the state say that the Western Electricity Coordinating Council’s study conclusively demonstrates that Wyoming’s wind resource, when coupled with large transmission projects, is competitive — that wind development in the Wyoming can be justified in the market. (Two examples of this assertion are here  and here.)

Here are some reasons that conclusion demands further analysis:

The study says:

“…(W)ind resource relocations and transmission expansions studied were not rigorously assessed in terms of their ability to deliver the relocated generation from Wyoming and Montana to particular load areas. In addition, resource and transmission cost uncertainties were not fully analyzed, and a number of other important factors used to make actual resource planning and procurement decisions were not fully addressed.” (http://www.wecc.biz/library/StudyReport/Documents/2020%20Study%20Report.pdf – see pages 92 & 93)

Put another way, the study’s authors concede that due to siting and transmission line routing challenges, among other things, they could not be as definitive in their conclusions regarding wind development as they could when they created a model that included an adder of $30/ton of CO2 to the cost of coal-fired generation.

The WECC also asserts on Page 13 of the plan summary:

“Alternative resource and transmission capital cost comparisons presented in this Plan generally reflect point (median) estimates of resource and transmission costs. Actual future costs must be viewed as covering a significant range of uncertainty…and this risk will factor prominently into investment decisions.” (http://www.wecc.biz/library/StudyReport/Documents/Plan_Summary.pdf)

The study makes it clear, then, that challenges related to siting and transmission line routing can add substantially to the cost of wind energy and create major uncertainties related to the amount of wind energy that can realistically be developed.

It is uncertainties like these that perplex decision makers and investors that seek to profit from marketing energy.

It’s not easy, either, for those who are committed to reducing carbon emissions and conserving resources while at the same time trying to negotiate a path that will allow people to thrive using reliable, affordable, and clean energy.

Can Wyoming Lead the Nation?

Perhaps the time has come when we don’t need to look first and so often outside of our state’s borders for the answers to all of our economic needs and energy requirements.

While it’s a fact that most if not all of the coal burned in the state comes from Wyoming, forward planning could result in a combination of renewables, advanced coal technology, natural gas, and possibly even nuclear energy to power the state forward.

By coupling these sources with conservation, we could enable a balanced energy portfolio that matches the governor’s call for development and conservation in a self-sustainable way. In this way the state will be a proving ground for technology and commitment that could serve as a model for the nation.

The Wyoming Outdoor Council is looking forward to working with Governor Mead on his energy policy initiative.

We are encouraged that his door is open and that he has made it clear that he needs to hear many different voices in the weeks and months to come. Be assured, we will be actively engaged and are looking forward to hearing from our members and sharing all that we learn.

Richard Garrett, the Wyoming Outdoor Council’s legislative and energy advocate, can be reached at richard@wyomingoutdoorcouncil.org, or at 307-332-7031 x18.