Siting Difficulty and Renewable Energy Development: A Case of Gridlock

Every social phenomenon eventually generates an acronym or two. Citizen opposition to new development is often foreshortened to NIMBY (Not in My Back Yard). When it comes to building new power plants and power lines, the uproar tends to be louder still with acronyms like BANANA (Build Absolutely Nothing Anywhere Near Anyone) entering the public debate. Few people like the idea of transmission towers marching across a verdant landscape, but the demand for new energy infrastructure, especially renewable energy facilities, has grown significantly in recent years.

Politicians on the national level see new renewable energy development as a means to achieve both national energy security and greenhouse gas reductions. And states and regions are beginning to focus on the local benefits of renewable energy, including potential improvements in state electricity reliability, local job creation, and regional economic growth.

To respond to these anticipated benefits, states and regions across the United States have launched a variety of programs and initiatives. Some of the most widely recognized are renewable portfolio standards (RPS), policies that require electric utilities to generate or purchase a minimum amount of electricity from renewable resources. How to fulfill this mandate varies from state to state: some RPSs specify which technologies are allowed, which must be used in certain amounts and from where, while others are more flexible. To date, RPSs have been enacted or renewed in 22 states and the District of Columbia.

Despite gaining a great deal of momentum in recent years, such efforts still face huge obstacles—primarily, where do we build these new facilities? A recent illustration of the severity of siting problems is Cape Wind, a proposal to site 130 wind turbines off the coast of Massachusetts in Nantucket Sound. This proposal has moved slowly forward through years of regulatory and environmental assessments and high-profile public and political opposition, most notably that of the Kennedy family.

Although Cape Wind is an extreme example, many of the problems surrounding this project are common to other renewable energy facilities, which generally face hurdles above and beyond their conventional counterparts. Not only are renewable resources typically confined to pristine, isolated parts of the country, like mountain tops or coastal waters, but these resources are also inflexible. Unlike conventional energy facilities, such as coal or natural gas power plants, where the fuel can be moved to the power plant, renewable fuels are immobile, and electricity must instead be moved out from these areas.

As a result, the viability of any new large-scale, grid-connected renewable energy project depends not only on the locations of renewable resources but also on the availability of supporting infrastructure, such as transmission lines. Because renewable resources are so often confined to remote locations, in many cases they also require new electric transmission lines to ship power to areas where it is needed. Consequently, renewable energy developers are faced with a chicken-and-egg problem. Without adequate and accessible transmission capacity, renewable projects are unlikely to cross the threshold of economic viability, and without adequate generation capacity to justify new transmission construction, investment in new lines also is unlikely to occur.

Transmission-line siting difficulty provides an important benchmark for the siting problems facing new renewable energy development. Therefore, one way to evaluate this obstacle is to compare areas with different amounts of renewable resource potential to areas of anticipated transmission-line siting difficulty. This analysis can then be used to examine the potential barriers to effective implementation of policies to promote renewable energy development, such as Renewable Portfolio Standards.

In a recent article in Energy Policy, Paul Fischbeck, a professor at Carnegie Mellon University, and I developed a measure of transmission-line siting difficulty for the continental United States based on several measures, including the economic variations of the cost of electricity generation within states, proximity of residents to power plants in different states, comparisons of power plant and power line construction over time, and perceptions of siting difficulty in different states, gathered through a survey of industrysiting experts.

The results of our analysis are illustrated in Figure 1. On this map, each state has a siting difficulty score between -3 and +3, where zero is the average siting difficulty across the United States. States with below-average siting difficulty, those shown in the lighter colors on the map, have negative scores, and those with greater than average difficulty, the darker states, have positive scores. Given these variations in power-line siting difficulty, what are the implications for new renewable energy development?

To examine the extent to which transmission line siting difficulty might affect the development of different types of renewable energy resources or constrain the implementation of policies such as RPSs, I used geographic information system (GIS) data to compare the measure of transmission-line siting difficulty with the spatial distribution by state of four common renewable resources—wind, solar, geothermal, and biomass. Using maps and data from the National Renewable Energy Laboratory and the Department of Energy, a standardized measure of resource potential, an area-weighted average of each resource, was calculated by state. For example, for the case of wind power, this average was developed based on wind power classes or measures of wind speed. Using GIS, the total area within each power class for every state was calculated to find the average power class for an entire state. For example, Mississippi, which is entirely in the wind power class 1, has an average wind power class of 1. In contrast, Colorado, which spans multiple power classes, has an average of 3.47.

Solar-power potential was calculated using a similar method based on average daily value of the incoming solar radiation that reaches any object exposed to solar rays, such as photovoltaic panels. Geothermal energy, which is contained underground as reservoirs of steam, hot water, and hot dry rocks, relies on the extraction of heat as steam or hot water to power steam turbines and generators to produce electricity. The measure of potential for this resource is the average subsurface temperature at a depth of 6 kilometers. Finally, total state biomasspotential was calculated based on estimates of the technical potential biomass resources currently available inthe United States by county (dry tons per year), including crop residues, manure, forest and mill residues, and landfill and wastewater-treatment gases.

The good news from this analysis is that renewable resource potential is widespread. Across the continental United States, 43 out of 48 states have above-average renewable resource potential for at least one resource and 28 states have above-average potential for two or more resources. This is not to say that certain regions are not more favorable for certain types of renewable energy development, or that development of all resources in each state is economically viable—but this result highlights that there are few areas where renewable energy is not an option.

The bad news is that states with some of the greatest motivations to develop in-state renewable energy have less resource potential and face higher siting difficulty than other states.

Take states that are net importers of electricity, such as California, New Jersey, and Maryland. These states have higher electricity prices than the national average and could potentially benefit from the local economic benefits and improved electric reliability possible through intrastate renewable resource development; however, importing states not only have less average resource potential, but also significantly higher siting difficulty than exporting states. As the first three graphs of Figure 2 show, the 18 importing states have slightly less wind and significantly less solar and geothermal resource potential than the 30 exporting states. Only in the category of biomass resources do importers have a slight, but statistically insignificant advantage over exporters. These results highlight the potential barriers to within-state renewable resource development and raise the question of whether high prices and possible reliability benefits will provide sufficient incentives within any given state for those states to turn to renewable energy as a response.

One possible mitigating factor is the role of state RPSs. Evaluating the spatial distribution of resource potential in states with RPSs relative to those without reveals that average resource potential is not significantly different across these states. However, the states with RPSs currently in place still have significantly higher transmission siting difficulty than those without. Although RPSs are intended to encourage investment in and construction of renewable energy facilities, significant siting constraints could increase uncertainty and reduce the incentives to meet these standards with local resources, thereby shifting some of the anticipated benefits, such as local economic growth and job creation, to other states from which renewable energy can more easily be generated (as credits) or imported.

Taken as a whole, many incentives exist for state-level renewable energy development; however, policy proposals toward this end often focus on structures to promote investment and not on interventions to mitigate siting difficulty. As a result, siting difficulty facing both renewable energy power plants themselves and related transmission lines could significantly affect states' ability to meet renewable energy goals and limit their ability to take advantage of potential local economic benefits. For renewable energy to make significant strides toward displacing conventional energy facilities, siting difficulty and its relationship to renewable resource potential must be given much higher priority.

One example of the type of policy intervention that could address these constraints are provisions in the Energy Policy Act of 2005 for "energy corridors" on federal lands in the West and national interest in electric transmission corridors. Including evaluations of renewable resource potential and possible transmission demands as explicit criteria in such a planning process could significantly help start and support new renewable energy development.

Waiting until push comes to shove—that is, until rising costs of conventional fuels spur widespread and rapid growth of new renewable energy facilities in the larger competitive market—presents its own dilemma. Because some renewable energy technologies and projects are still uncertain and many facilities currently take longer to permit and build, in a crisis, there will be little motivation to turn quickly to renewable capacity, unless large-scale commercial applications have already been sufficiently tried, tested, and proven. As a result, addressing siting constraints and solidifying opportunities for effective, early renewable energy development are important initial steps toward meeting long-term energy security and emissions reduction goals.