This blog was written by Simon Mahan, former Energy Policy Manager at the Southern Alliance for Clean Energy.Guest Blog | January 9, 2017
A newly released study highlights the economic benefits associated with a proposed wind powered transmission line. The Southern Cross transmission project would use high voltage direct current (HVDC) to connect wind energy from Texas to northern Mississippi and the rest of the southeast. The 400 mile power line could provide up to 2,000 megawatts of wind power from some of the best wind energy resources in the country.
The new study highlights the beneficial job and economic development impacts associated with the proposed power line. According to the study, the Southern Cross Transmission project will provide significant economic benefits within Louisiana, and Mississippi, including $3.9 billion in total direct, indirect, induced and fiscal economic impact. The benefits primarily stem from construction, potential local tax revenue, and operations. Notably, the benefits from low-cost wind power associated with the transmission project were not included in the analysis, suggesting a conservative analysis.
Southern Cross would connect to the Electric Reliability Council of Texas (ERCOT) transmission grid system, enabling access to some of the best wind energy resources in the country. Wind power in the windiest parts of the country is being sold in long-term contracts for under $20 per megawatt hour, or 2 cents per kilowatt hour. According to analysis from the Lawrence Berkeley National Lab, low cost wind power contracts are cheaper than natural gas-generated electricity. Utilities need to begin contracting for wind power as soon as possible to lock-in the absolute lowest priced wind resources.
The southeast is a major market for wind energy. Already, southern utilities import over 3.5 gigawatts of wind power – or enough for 1 million homes. However, that amount of power represents just 1% of the total installed capacity. In states like Kansas, Minnesota, Oklahoma, and Texas, wind power provides more than 10% of the state’s electricity generation. Iowa receives more than 30% of its electricity from wind power. In order to reach higher levels of wind power penetration levels, additional transmission projects (like Southern Cross) will be necessary. The Southern Cross project would substantially increase access to low-cost wind power for the southeast.
Pattern Development, the developer of the Southern Cross, plans to begin construction of the power line in 2018 with wind power delivery as early as 2021.