What’s the #1 reason utilities should purchase wind from Clean Line?

This blog entry was written by Allie Brown, former Clean Energy Advocacy Manager at SACE.

Guest Blog | January 27, 2017 | Energy Policy, Wind
Even this Staples employee is excited about Clean Line’s low-cost energy!

Across the nation wind power prices have plummeted over the past five years, and now are at all-time historic lows. A recent forecast from the Lawrence Berkley National Laboratory demonstrates that it’s cheaper to contract for wind power today than to generate electricity using natural gas. 

The Plains and Eastern Clean Line transmission project will deliver 4,000 megawatts of wind energy from the midwest to our southern region. SACE supports this project because it will diversify our energy mix, create tens of thousands of jobs, and provide health benefits by decreasing pollution from fossil-fuel generation in our region.

But one of the most convincing reasons that southern utilities – like Tennessee Valley Authority – should hop on the Clean Line train? It’s simple: Cost.

The project is estimated to cost a mere 3 cents per kilowatt-hourThat’s comparable to the price of operating a modern natural gas power plant, making wind not only cost-effective but a guaranteed low-cost electricity source for decades in the future. Because there is no fuel cost associated with wind energy, utilities can secure long-term contracts (approximately 20-25 years) and lock in prices that protect their customers from price spikes due to volatility in fossil fuel costs.

If you had a choice between a fixed-rate mortgage at 3% or an adjustable rate mortgage at 3%, which would you pick? Nearly everyone chooses the fixed-rate mortgage at today’s low mortgage rates, because there’s not much lower for rates to go. But an adjustable rate mortgage could go up … a lot. But Southeastern utilities are hesitating to grab a deal for 3 cent power for 25 year terms, which leaves their utility customers at the mercy of natural gas prices that could go up … and up!

What’s more, for TVA, there are additional savings since it would distribute the power from Clean Line south and north to other utilities. As a pass-through transmission provider to other utilities purchasing wind energy, TVA would earn additional revenue. Based on this additional revenue and the low cost of wind power, Clean Line could help TVA actually reduce overall costs by about $1.44 per megawatt hour.

The Plains and Eastern project presents an opportunity to for utilities to partner with private industry to increase the amount of low-cost wind energy in the southern electric market, and save money for households and businesses on their electric bill. As TVA phases out 18 coal-fired units, Clean Line’s project provides a perfect solution to help fill in the gaps for electricity needs. This investment would make our region more attractive to new companies wanting large quantities of clean energy.

Plains and Eastern Clean Line is a direct current link to the lowest-cost wind energy in the country. Credit: Clean Line Energy Partners

But the clock is ticking if utilities want to contract for the cheapest prices Clean Line can provide. Critical deadlines regarding the federal production tax credit for wind power are fast approaching. According to Clean Line, contracts for wind power can be signed today, but can take delivery as late as December 2020 or perhaps 2021, and still qualify for the important tax incentive. We strongly encourage TVA’s board of directors to immediately contract for at least 1,000 megawatts of wind power on the Plains and Eastern Clean Line.

We need your help to urge TVA to buy wind power from Clean Line today: Sign our petition today to urge TVA to take advantage of this low-cost, abundant, clean energy resource that would benefit our region.

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