Business Costs & Regulation

Alt-Energy Is in for a Boost

Changes to the grid to reduce power outages will help wind, solar, tidal and geothermal energy projects reach customers.

A huge policy shift is coming at the Federal Energy Regulatory Commission. All power generating firms in an area will share the costs of new lines, starting early in 2011. At present, only the utility building a new facility foots the bill for power lines to get the juice from the plant to users.

One impact of the change: A big lift for prospective wind, solar, tidal and geothermal energy projects, many of which are best suited to relatively isolated areas -- in western deserts or on the High Plains, for example. Sharing the cost of building transmission lines to power-hungry urban areas will make the projects more financially attractive and doable, since alternative energy companies, such as PacifiCorp, US Wind Force, Crownbutte Wind Power and First Wind, to name a few, rarely have the deep pockets of large electric utilities.

The policy change is part of a larger government plan that will require electric utilities to show that there’s sufficient generating and transmission line capacity to meet current and anticipated needs. The overall goal is to boost the reliability of the nation’s electric grid, reducing blackouts and brownouts, says Michael Goggin, manager of transmission policy with the American Wind Energy Association.

Already, about 330 gigawatts of new wind power capacity are in the works,planned for prairies, mountainsides and offshore. Many projects still need approval from state utility commissions, and some are sure to encounter court challenges. But by 2020, most will be built. Current U.S. wind power capacity is a mere 36 gigawatts.

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