Wind industry warns of rising grid connection costs

The US wind energy industry has lodged an official complaint with regulators, warning that proposed changes to grid policy in the Midwest could slow the sector's rapid expansion.

The American Wind Energy Association (AWEA) and lobby group Wind on the Wires (WOW) last week filed a 64-page submission with the Federal Energy Regulatory Commission opposing proposals from the Midwest Independent Transmission System Operator, which they claimed would nearly double the cost of wind farm grid connection for developers.

Under the proposals set out last month, energy generators in 13 midwest states and the Canadian province of Manitoba would be required to pay for 90 per cent of the cost of any new transmission lines. The move would mark a major break with the previous policy, which saw costs split 50-50 between energy generators and transmission line owners.

Beth Soholt, director at WOW, said the changes would place an unfair cost burden on wind farm developers despite the fact that a wide variety of stakeholders would benefit from grid upgrades.

"The proposed policy change is like requiring the next car entering a congested highway to pay the full cost of adding a new lane," she said. " Obviously, such a policy is unworkable, which in our case means that wind projects will not be able to connect to the grid."

The AWEA warned that the proposed changes could put billions of dollars of new wind farm investment at risk in the Midwest, undermining the chances of meeting President Obama's target of doubling renewable energy capacity within three years.

"At a time when the wind industry is one of the few bright spots of the US economy, having created 35,000 new jobs last year, this policy is saying the Midwest is becoming less friendly for the wind business, and that will clearly have an impact on not only wind development but manufacturing and supply chain jobs throughout the region," said AWEA chief executive Denise Bode.

The Midwest and South West have emerged as the engine room of the fast-expanding US wind energy sector, which earlier this year ousted Germany as the world's largest generator of wind power.