November 10, 2020 - The cost of wind and solar power may be falling but building the transmission infrastructure to send power across the country – perhaps the key piece of the renewable puzzle – has only gotten more difficult and more expensive. A reality now playing out in both the U.S. and Europe.
Germany’s attempt to pivot to a wind and solar future continues to hit hurdles that should raise concerns here, or at the very least temper ambitions. Germany’s ongoing effort to build transmission superhighways to move power from wind and solar generation in the north to industry in the south is proving a debacle.
As Bloomberg recently reported, “[t]he projected cost of building Germany’s green power ‘autobahn’ is steadily climbing, setting up electricity consumers with an ever increasing bill… Severe delays have seen spending soar more almost fivefold to 95 billion euros ($111 billion).”
German retail electricity prices are already the highest in Europe and are being driven even higher by the ongoing and fraught effort to upgrade and expand transmission. A year ago, when the power autobahn was just 50% over budget, it was already being called a “catastrophe” by Peter Altmaier, Germany’s minister of the economy and energy.
The soaring costs imposed by Germany’s pivot are precisely what U.S. consumers and businesses cannot afford as we eye economic recovery. While some policymakers see opportunity in a national Clean Energy Standard, the evidence from both the U.S. and in Europe offers ample cause for concern.
U.S. electricity rates are already climbing as states pivot away from dispatchable power to increased reliance on intermittent wind and solar generation. As the penetration of these variable resources climbs, and the need for new transmission climbs in tandem, the cost and challenge of integrating these sources of power will soar – costs that will be passed directly onto consumers.
In Texas, the Competitive Renewable Energy Zone project, which connected wind generation in the Texas panhandle to population centers in the middle of the state, ran $7 billion. That was one project. When examining what would be required to achieve the wind and solar ambitions of the Green New Deal, Wood Mackenzie projected that it would require the construction of another 200,000 miles of high-voltage transmission lines. Our existing grid would, for all intents and purposes, need to be completely rebuilt. Practically speaking, that’s staggering.
While important pieces of energy technology are getting cheaper, such as solar panels or lithium-ion batteries, building new transmission infrastructure is not. We aren’t learning by doing; we seem to be getting worse at it.
A recent report found that transmission investment rose from $17.7 billion in 2013 to about $22.4 billion in 2018. However, only about 1,300 miles of new transmission lines were completed in 2018 versus a peak of 4,500 miles in 2013.
It’s time to put soaring political rhetoric aside and hone in on what’s possible and pragmatic. Phasing out essential, existing, well-operating energy capacity is neither.
The system costs and challenges associated with integrating large amounts of wind and solar power remain immense. Perhaps none are larger than the prospect of trying to build tens-of-thousands of miles of high voltage transmission lines, often where they are not wanted. That’s the political as well as technical reality. Pretending otherwise – while sacrificing the existing, affordable generating capacity that currently underpins the grid we have – would be a catastrophic mistake.