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South Dakota’s wind-power export opportunity could be permanently bottle-necked by transmission issues if the state doesn’t act soon, an industry association is warning.
The South Dakota Wind Energy Association (SDWEA) is holding its annual meeting today in Watertown, where it’s releasing a pair of new reports on interstate transmission issues that give a new sense of urgency to the state’s industry.
The good news for the industry: The reports conclude that it could be economical to export South Dakota wind power to other electricity markets like Chicago, Detroit or St. Louis.
The bad news: If wind farm planning and development doesn’t accelerate in South Dakota, it could permanently miss out on the economic opportunity.
“It’s a lost opportunity, forever, and a lot of people don’t understand that,” says Steve Wegman, executive director of SDWEA.
A wave of new long-distance transmission projects, such as CapX2020, is on the horizon across the Upper Midwest. But new capacity on those lines will be assigned on a first-come-first-served basis, says Wegman. Because neighboring state’s policies have been more supportive of wind projects, those states have more projects in the pipeline and could absorb most of that new capacity.
“It appears that North Dakota could take all of South Dakota’s transmission,” says Wegman. “Once they put an interstate past your house and they don’t give you a ramp on it, you ain’t getting on. Ever.”
South Dakota has among the nation’s best wind resources — enough to theoretically generate half of the nation’s electricity needs. Even with its superior wind, however, it lags Iowa, Minnesota, North Dakota and other states in total installed capacity. As of this summer, it had 784 megawatts of capacity compared to 1,424 megawatts in North Dakota, 2,518 megawatts in Minnesota, or 3,675 megawatts in Iowa.
One factor limiting the state is its small population. The installed wind capacity it has now is enough to generate up to 26 percent of the state’s total electricity demand (more than half the state’s power comes from hydroelectric dams). In recent years, some in the state have started looking into exporting electricity as a way to grow the wind industry.
A 2010 study commissioned by SDWEA and the governor’s economic development agency estimated that a project to export 1,000 megawatts of new wind power would create 5,360 new construction jobs and generate $538 million in total economic activity. It would also require building more than 83 miles of high-voltage transmission lines and other transmission grid upgrades.
Transmission line projects can take decades to plan and build. If South Dakota wants to sell its wind power to other markets, Wegman says its best, and perhaps only, opportunity to do so is by getting wind developments lined up in time to be included on transmission projects that are already in the works.
Miss out on those and South Dakota could be waiting for another generation for similar transmission opportunities. Even then, it’s likely those markets to the east will have already secured all of the power resources they need, says Wegman, noting that electricity demand has been falling. That, he fears, could leave South Dakota’s great untapped wind potential permanently unclaimed.
Wegman says he hopes the report signals to transmission developers that connecting South Dakota wind to eastern markets is economically viable, but the other audience is state policymakers.
“You have to get good government tax policies,” says Wegman. “Just because you have high wind doesn’t mean they’re going to build a wind project here.”
Read the reports:
SDWEA Wind Energy Transmission Economics Assessment – Final (pdf)
SDWEA – Transmission Input from CapX v7 (docx)
Photo by windimages via Creative Commons