New Transmission May Help Nebraska Export Wind Power in Future

Nebraska has some of the highest wind power potential in the nation, yet relatively few wind farms. It’s a fact often criticized by wind power advocates within and outside the state. But Nebraska’s utilities only need so much wind. So what about sending some of that wind power to other states?

Nebraska’s wind resources could supply the state’s power needs more than 100 times over—according to the National Renewable Energy Laboratory. So what’s keeping energy companies from tapping into that resource? One reason is the lack of infrastructure—a way to get the power from point A to point B. You can think of transmission lines, or the electrical grid, like the interstate system.

“If a highway has a lot of traffic on it, it gets congested and traffic doesn’t flow as well. The same kinds of things happen in the transmission world,” said Tom Kent, chief operating officer of the Nebraska Public Power District.

Take north-central Nebraska, like Cherry or Hooker counties. There aren’t many people who need energy, but there’s a lot of very good wind potential. Right now, though, moving wind power out of Cherry County is like trying to put I-80 traffic on a busy two-lane highway.

“There’s no transmission there now that’s able to move the kind of energy that can be produced from wind generation into the transmission network so it can be delivered to the east or south of Nebraska,” Kent said.

That will soon change. Five years ago, Nebraska’s utilities joined a regional transmission organization called the Southwest Power Pool. That association helps plan and pay for transmission upgrades, like the new 220-mile transmission line that will start along the I-80 corridor near Sutherland, Neb., and go north into Cherry County, then east to Holt County to connect with other major transmission lines. Lanny Nickell, vice president of engineering with the Southwest Power Pool, referred back to the interstate analogy.

“Not only does it allow for some of that wind to be dropped off at certain exit points on the interstate, but also continue to connect to the rest of the interstate system that exists and ties region together,” Nickell said.

Nickell said in addition to creating infrastructure for future wind projects, the new transmission line will also help improve reliability and traffic, or congestion, when moving power across the state and region. Those upgrades, along with recent tax incentives approved by the state legislature, should help bring more wind farms to Nebraska.

“If Nebraska doesn’t have transmission infrastructure to capitalize on those opportunities, then those wind resources will connect somewhere else. That’s the benefit this infrastructure provides to Nebraska—it allows them to compete," Nickell said.

But after a handful of new wind power purchases this year, Nebraska’s utilities have mostly reached or exceeded their renewable energy goals. So they likely won’t be buying more wind in the immediate future.

Nebraska has potential beyond what the public power districts will want to buy for in-state consumption, said Tim Polz, of wind developer Geronimo Energy.

“That gets to the ability to build out and take advantage of the tremendous wind resource here and export wind beyond the borders of Nebraska, while still keeping all those economic development benefits in the state.”

Currently, there are no wind projects exporting power from Nebraska. But connecting to the Southwest Power Pool lets Nebraska’s utilities buy and sell power with others in the region, which Polz said offers more marketing opportunities to developers. That increased market competition is also expected to help keep down energy costs for ratepayers.

“Nebraska is recognizing the fact that it has this tremendous wind resource. They haven’t been overly aggressive but I think they’ve taken a very responsible approach and are starting to really see some of the benefits,” Polz said.

Some of those recent moves come down to cost, said Steve Gaw of the Wind Coalition, who spoke at Nebraska’s recent wind conference.

“For a long time there was a notion that renewable power was more expensive than traditional generation. That’s just not the case today. The advances in technology, competition in market, and access to these very good wind zones is that price is competitive with any other form of generation,” Gaw said.

Utilities see the benefit to locking in cheap prices now through wind power contracts, which, unlike coal or gas, can remain consistent for the next twenty years, Gaw said. Tom Kent of Nebraska Public Power District isn’t sure the wind export landscape has changed much.

“I think the potential is as it always has been. It really boils down to transmission access and the economics—finding a buyer and making the economics work,” Kent said.

Those buyers will likely need to be in other states. NPPD won’t buy any additional wind this year. And the Omaha Public Power District just added two big wind projects. By the end of 2015, the utility will get 30 percent of its power from renewable sources. Dean Mueller, OPPD’s sustainable energy manager, said they were motivated by low wind prices and the expiration of the federal wind tax credit at the end of the year. And he said traditional energy will only become more expensive with further carbon regulation.

“There’s a lot of regulatory pressure on coal and natural gas and the costs of those kinds of generation are growing higher. As those prices get equal to or above cost of wind, you’ll see a lot more wind taking over,” Mueller said.

Nebraska lawmakers may consider further tax credits to wind farms next legislative session. But Mueller thinks the change likely won’t happen as quickly as some would like. After all, Nebraska’s new transmission line won’t be complete until 2018. But by establishing the infrastructure now, Nebraska should be able to cash in on its rich wind resources with the changing power demands of the future.