On Monday, several regional grid operators and organizations announced the Joint Coordinated System Plan (“JCSP”) report, which estimates that over $80 billion in new transmission is needed to support 20% of the electricity consumed in the eastern U.S. coming from wind generation. 20% is the wind energy contribution that the U.S. Department of Energy (“DOE”) recommended in its Eastern Wind Integration and Transmission Study.

The Midwest Independent Transmission System Operator, Inc. (“Midwest ISO”), Southwest Power Pool, Inc. (“SPP”), PJM Interconnection LLC (“PJM”), the Tennessee Valley Authority (“TVA”), the Mid-Continent Area Power Pool (“MAPP”), and members of the SERC Reliability Corporation (“SERC”) all participated in creating the JCSP Report. The Independent System Operator of New England, Inc. (“ISO-NE”) and the New York Independent System Operator (“NYISO”) also took part in the development of the JCSP, however, they did not participate in the final report. In a separate statement, they praised the cooperative approach, but complained that the report’s release is premature, and does not take appropriate account of the potential of local renewable resources.

The JCSP considered two different scenarios in its report. The first was a “reference scenario” in which wind energy comprises 5% of the Eastern Interconnection’s electric power. Under this scenario the JCSP estimates that an additional 10,000 miles of new extra-high voltage transmission will need to be installed at a cost of approximately $50 billion. This amount excludes the capital costs of the added generation, which the JCSP estimated at $700 billion by 2024. The second scenario assumes that 20% of the Eastern Interconnection’s electricity will be powered by wind. This plan would require an additional 15,000 miles of new extra-high voltage transmission, at a cost of $80 billion. The additional generation under this scenario would amount to $1.1 trillion by 2024.

The JCSP acknowledged that these scenarios sound expensive, but noted that a fuel mix with 20% wind energy would save $12 billion annually by 2024 because of its low production costs and free fuel compared to the fossil plants that the wind turbines would replace. Additionally, the American Wind Energy Association estimates that the 20% wind energy scenario would save 3 billion tons per year in carbon dioxide emissions.

The JCSP is only the first phase of an overall analysis that seeks to find the most effective and efficient way to increase wind energy in the eastern U.S. The second phase, which will start in the first quarter of 2009, will analyze additional scenarios in order to more accurately understand possible solutions. In addition to refining the JCSP’s existing assumptions, the second phase will analyze reliability and make recommendations for new transmission facilities. Contributors to the JCSP intend to present the report to FERC and Congressional representatives soon.