Alternative energy faces power line "bottleneck" in U.S. West

By Jim Christie - Analysis

SAN FRANCISCO (Reuters) - President Barack Obama aims to double alternative energy production over three years, but how much "green" power will come from the U.S. West is uncertain if the sunny and wind-swept region cannot overcome a shortage of power lines.

Installing large solar installations and dotting landscapes with wind turbines across the western United States would be, technically speaking, straightforward, and potentially popular with the renewed interest in domestic energy sources amid rising economic, environmental and security concerns.

Delivering the region's green power to markets, however, is proving easier said than done.

"Our customers are telling us that they're already seeing transmission bottlenecks with their future plans," said Vic Abate, head of General Electric Co's renewable energy business.

Transmission line costs vary wildly. For years the rule of thumb was $1 million per mile, but a recent project in Southern California cost $16.5 million per mile.

T. Boone Pickens' "Pickens Plan" for generating 22 percent of the United States' electricity from wind power sees the need for $70 billion in transmission and power-grid infrastructure.

"It's all over the map," said George Given, head of the consulting firm Wood Mackenzie's global power unit. "If you're building over Texas, which is relatively flat ... you don't have so many issues. But if you're building in mountains, it's monumentally different work."

Transmission line projects in the U.S. West, much of it mountainous, face another steep challenge the region's industry and public officials say the Obama administration must tackle: federal bureaucracy.

Much of the region's expanses are overseen by a variety of U.S. agencies charged with managing natural resources, wildlife, parks and native populations.

"Nevada is, what, 90 percent federally owned?" said Rich Halvey, energy program director at the Western Governors Association. "We're continually stymied because of how long it takes to get transmission projects approved and built."

SPEEDING FEDERAL PERMITS

Bureaucratic delays stem from mandates of U.S. land agencies, said Lew Milford of the Clean Energy States Alliance, which represents 20 states' renewable energy funds: "It's one of those tricky good-versus-good problems -- trying to move more renewable energy but in an environmentally friendly way."

The U.S. Forest Service is the toughest sell of any U.S. land agency, said Robert Mitchell, chief executive of transmission systems developer Trans-Elect.

"If you are the chief forester and it is your responsibility to protect forest, probably the last thing you want to happen is to have transmission lines built through the forest," he said.

U.S. land agencies will need to cut red tape to help speed transmission projects, said Wayne Whitlock, a partner with the law firm Pillsbury Winthrop Shaw Pittman and a former lawyer at the U.S. Department of the Interior.