Increasing demand for renewable energy increases costs, as less economically attractive resources are required to meet higher targets, the report concludes.
Wind energy is found to be the largest contributor to meeting regional renewable energy demand when only resources from western resource hubs are considered, while contributions from geothermal, biomass and hydropower do not change significantly with increasing demand or changes to key assumptions.
Lawrence Berkeley National Laboratory produced Exploration of Resource & Transmission Expansion Decisions in the Western Renewable Energy Zone Initiative to examine, at a screening-level, the sensitivity of renewable resource selection, transmission expansion, and supply costs in meeting aggressive renewable energy targets to different assumptions and policy decisions.
Scenario of 33% from renewable sources
The report evaluates decisions under a number of alternative future scenarios centred on meeting 33% of the electrical load of western states with new renewable resources located within resource hubs identified in the Western Renewable Energy Zone (WREZ) Initiative.
Transmission investment costs are “substantial” at US$17-34 billion, but represent only 10-19% of the total renewable supply cost required to meet the 33% target, it concludes. Long transmission lines can be economically justified in particular cases, but the majority of transmission lines are found to be relatively short.
Key uncertainties can shift the balance between wind and solar in the renewable resource portfolio, and the costs of meeting renewable energy targets within the western states are heterogeneous without Renewable Energy Credits (RECs). Transmission expansion needs and overall costs can be reduced through the use of RECs, equating to an average savings of as much as US$6/MWh of renewable generation.
Tool compares economics of renewable enercy
Berkeley Lab worked with Black & Veatch to develop a new analytical tool to compare the economics of renewable resource areas for different load areas, and how different policies and uncertainties may affect resource selection and transmission expansion. The findings build upon the WREZ initiative that was managed by the Western Governors’ Association (WGA) and the US Department of Energy (DoE).
“We need better analytical tools like the WREZ model to enable private and public sector decision-makers to develop timely policies and make investment decisions that will prepare the region for a clean energy future,” says Montana governor Brian Schweitzer, Chairman of WGA.
“As a screening tool, we are not able to identify specific transmission lines or renewable projects that should be developed to meet a 33% renewable energy target, but we are able to identify important questions that need to be considered in more detailed models,” adds Andrew Mills of Berkeley Lab, one of the report authors.
Wind is largest source; solar is almost always second
“Building transmission to reach renewable energy goals requires coordination among renewable developers, utilities and transmission owners, resource and transmission planners, state and federal regulators, and environmental organizations,” the report notes.
“Our analysis finds that wind energy is the largest source of renewable energy procured to meet the 33% renewables target across nearly all scenarios analyzed (38-65%); solar energy is almost always the second largest source (14-41%).”
Solar exceeds wind by a small margin only when solar thermal energy is assumed to experience cost reductions relative to all other technologies.
“We find that the relative economic attractiveness of renewable resources with low capacity factors (eg: wind and solar) are more sensitive to transmission distance and line voltage than are renewable resources with higher capacity factors (eg: biomass and geothermal),” it concludes.
“We also find that the market value of solar, which is considerably higher than the other renewable resources in most instances, is largely influenced by the correlation of solar output with load and the ability of solar to contribute significantly towards resource adequacy needs.”