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FUEL FROM THE SKY: SOLAR POWER’S POTENTIAL FOR WESTERN ENERGY SUPPLY Transmission in the West (Figure 6 of the report), which was fittingly titled “Location of Famous Transmission Constrained Paths in the Western Interconnected System.” The Impact of Deregulation on Transmission Deregulation was driven by the belief that the regulated monopoly, vertically integrated utility business was outdated and that competition would benefit the industry and consumers. Because the generation business lends itself best to competition, restructuring in many states of the WGA and elsewhere in the country has included a requirement that utilities sell off (divest) all or part of their generation assets. The business of providing electric generation has migrated to IPPs and non-regulated utility affiliates. Regulators hoped that these IPPs and affiliates could produce power more economically than the utility monopolies. Regulators and policy makers acknowledge that the transmission and distribution (T&D) system is a natural monopoly and does not lend itself to deregulation. However, the decoupling of T&D from generation has resulted in little incentive for utilities to add transmission capacity. Conversely, generators are reluctant to build or upgrade transmission lines, because their invest- ment in electric lines may benefit their competitors just as much as themselves.2,3 Therefore, while load and generation have grown, transmission expansion has not kept up.4 Consequently, with more power on the lines and minimal line additions, transmission bottlenecks have devel- oped which, in many parts of the country, have resulted in significant differences in regional prices during peak hours. Transmission in the West The states of the WGA are located in all of the three synchronous electric interconnections in the Lower 48: Western, Texas, and Eastern. Most states and regions are within the Western Interconnection; this includes the Northwest, California, Southwest, and Colorado and Wyoming regions. Transmission is particularly strong between the first three regions, and, unless regional demand greatly exceeds the transmission capacities for the exchange of power, power prices across the regions track fairly well. For example, wholesale power prices in San Diego, Phoenix, or Las Vegas are within a few percent of each other during most hours of the year. In the current environment, power plant developers site their projects to take advantage of the existing transmission system or avoid it by building close to the load, so that sellers are only a short distance from buyers. For gas-fired power plants, with their low emissions and small visual impacts, the latter strategy works, even though these projects often still face fierce opposition from the communities that these generators are trying to serve. For coal-fired power plants this does not work, as both economic and environmental reasons demand that the plants be built close to the mine and far from consumers. This, however, means investing in new transmission line construction or transmission line upgrades. Just such a trend can currently be observed at proposed coal-fired power plants.5 9PDF Image | Solar Fuel From The Sky
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