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Tight Grid Capacity Limits SD Wind-Energy Growth

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Wednesday, December 30, 2020   

PIERRE, S.D. - The renewable-energy industry is happy to be included in the COVID-19 relief bill signed this week by President Donald Trump. However, South Dakota regulators say that to see more growth for wind power, more grid capacity is needed.

The relief package contains key tax-credit extensions for solar and wind projects. In South Dakota, wind energy has taken off in recent years, accounting for nearly 24% of the state's generated electricity.

Chris Nelson, vice chairman of the Public Utilities Commission, said the trouble is that there's almost no space left to get that energy to homes and businesses.

"We had some very large transmission lines that were developed over the last 10 years," he said. "Now, it appears that most of those are fully subscribed, with all of these projects that have been recently built."

He said additional grid space could keep the development flow moving. There was a rush to finish projects in South Dakota before existing federal incentives expired. Nelson said that contributed to the recent growth, but predicted that the tax-credit extension won't be a big boost for wind developers because of the capacity barrier.

The lack of grid space has caught the attention of key groups, including the Midwest Governors Association. It recently sent a letter to organizations involved with grid operations, asking for a long-term solution. Nelson said there's a lot of awareness he hopes will break the capacity logjam.

"What are the transmission needs that are here today and might be here 10 years from now," he said, "and what kind of planning do we need for capacity for that energy."

Nelson said some smaller wind projects, along with solar development, still could be included in current infrastructure. But the transmission barriers pose a threat to utility-scale development that could have a major impact on the energy market.


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