New Type Energy||Renewable Energy

President Barack Obama's push for Wind and solar energy to wean the United States from foreign oil carries a hidden cost: overburdening the nation's electrical grid and increasing the threat of blackouts.he funding Obama devoted to get high-voltage lines ready for handling the additional load of alternative supplies is less than 5% of the $130 billion that power users, producers and the U.S. Energy Department say is needed.

Without more investment, cities can't tap much of the Renewable energy from remote areas, said Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission. He serves as the administration's top official on grid issues and recognizes the dilemma it faces.

"As we add more and more wind power, the grid will get more stressed, and there's going to be a point where the grid can't handle any more," Wellinghoff said at an energy conference in Chicago. "The first thing we need is to build out transmission."

The country's electricity network sprawls over 211,000 miles of high-voltage power lines, a patchwork connecting substations and transformers owned by utilities and federal agencies.

Obama's $787-billion stimulus plan to end the deepest U.S. recession since the 1940s dedicates $6 billion in the next two years to expand the country's transmission system for renewable energy.

By contrast, China is spending 23% of its 4 trillion yuan ($585 billion) in stimulus to make its grid ready for alternative sources, using advanced electrical technologies from Zurich-based ABB Ltd. and American Superconductor Corp.

The administration is counting on private utilities and transmission developers to complement its investment, according to Wellinghoff.

Yet a full refit of the U.S. grid would cost $13 billion annually over 10 years, compared with the $5 billion a year averaged over the last decade, said Rich Lordan of the Electric Power Research Institute, an industry-funded research organization in Palo Alto, Calif.

The amount utilities will spend is limited by how much consumers are willing to pay for transmission work and alternative energy, said Keith Martin, a lawyer at New York-based Chadbourne & Parke LLP who represents developers of renewable projects.

"China's our fastest-growing market," said Jason Fredette, investor relations manager at Devens, Mass.-based American Superconductor. "We're not counting on U.S. stimulus money."

The Energy Department's latest round of loan guarantees, announced July 29, underscored the government's emphasis on alternative energy over the transmission system itself. The department said it will provide as much as $30 billion for renewable projects, compared with $750 million to increase the reliability of the nation's power network.


A new solar-power facility costs three times as much as a coal-fired plant of the same size, the Energy Department estimates.

"Five years from now, we could experience ratepayer backlash," Martin said.

Encouraging alternative sources without preparing the grid heightens the risk of shortages, said Will Gabrielski, an analyst with Broadpoint AmTech Inc. in San Francisco.

Consequences in Texas

The consequences of failing to improve the grid played out last year in Texas, the biggest U.S. generator of wind power with 7,907 megawatts, enough to supply about 6.3 million homes. When winds died in February 2008, utilities had to cut power to factories and offices as output dropped 82%.

Obama is calling for 25% renewables by 2025, more than five times the current amount, excluding hydroelectric, the Energy Department says. That would add about 272,000 megawatts to the grid's capacity of 830,000, further straining the transmission system.

Texas' transmission network is mostly independent of the nation's. Without added power lines, operators were unable to draw enough replacement electricity to keep businesses supplied.

"The rule of thumb is by 2011 we need to see significant upgrades" to avoid such shortages caused by the intermittent, unreliable nature of renewable-energy sources, Gabrielski said.

The outdated network led to the nation's worst blackout six years ago this month. It cut power to 50 million people in eight states and the Canadian province of Ontario, causing about $10 billion in damage.