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FUEL FROM THE SKY: SOLAR POWER’S POTENTIAL FOR WESTERN ENERGY SUPPLY were a disaster for the West, 2001 appears to be the turning point, and RDI Consulting’s fore- cast of demand and capacity additions through 2004 shows that after this past summer the worst seems to be over. In the following section we will look at some of the hot spots that may remain in the region. Demand and Supply out of Balance Exhibit 2 suggests that, by 2002, the West as a whole will again have an adequate supply of electricity, but the new generating capacity that will come on-line is not distributed evenly. While some regions will see, or already have, sufficient generating capacity, other regions will continue to be in a tight situation. Nevertheless, our forecast suggests that no regions will be in a critical situation, especially in the light of the recent slowdown in electric demand growth. In Exhibit 3, we show the estimated supply and demand balance in the West during summer 2001. The Northwest, Colorado and Wyoming, California, and the Southwest are all part of the Western Interconnection and are able to exchange electricity. Exhibit 3 shows that all regions but the Northwest fall short of their target reserve margins. The situation is especially critical in California and the Southwest, where reserve margins are 3% and 6%, respectively, and danger- ously short of the 16% target. In 2001, the Western Interconnection was still greatly affected by drought conditions in the Northwest, but significant energy conservation measures helped avoid the kind of power shortages that threw the Western Interconnection into turmoil in late 2000 and early 2001. The Prairie States, which are within the Eastern Interconnnection, have only limited electrical ties to the Western Interconnection and are better interconnected to the North (Canada), East, and South. Small portions of Texas are in the Western Interconnection, but most of the state is an island unto itself—the Electric Reliability Council of Texas (ERCOT). According to our analysis, Texas had a substantial surplus of power in 2001 due to an early and strong power plant con- struction boom that still continues. For the Prairie States, the demand and supply balance is a lit- tle more difficult to assess because this region is part of two NERC reliability regions, but our demand and supply balance analysis in Exhibit 3 suggests that the Prairie States currently enjoy a slight surplus of power. Exhibit 3 shows that the demand and supply balance in the West is different from region to region. While, as a whole, the West is only slightly short of capacity in 2001, some western regions, such as California, are still short, at least when historic demand levels are assumed. However, because of interregional transmission, which was built to enable the West to take advantage of regional diversity and reduce the need for power plant construction in the West, some of the worst problems have been avoided. In fact, if power were able to flow freely all across the West, the demand and supply situation would have been almost in balance. This sug- gests that interregional transmission—by sending power from where it is abundant to where it is 7PDF Image | Solar Fuel From The Sky
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