Pioneer Editorial: Base power generation threatened
A decision announced Friday by Otter Tail Power Co. to pull out of the Big Stone II energy project could seriously affect the availability of affordable electricity in our area.
The clean-coal project to added a second plant at Milbank, S.D., and new transmission lines into North Dakota and Minnesota was originally slated to be up and running by 2011, but capitalization efforts and lawsuits have now put the start to late 2015, if at all with Otter Tail's withdrawal.
"The broad economic downturn coupled with a high level of uncertainty associated with proposed federal climate legislation and existing federal environmental regulation have resulted in challenging credit and equity markets that make proceeding with Big Stone II at this time untenable for Otter Tail's customers and shareholders," Otter Tail President and CEO Chuck MacFarlane said.
Big Stone II project was designed to provide the latest in clean-coal technology which would have brought total emissions of carbon from both the older Big Stone I and the new plant under existing federal standards. But with unknown changes in those standards, plus lawsuits from environmental groups, utilities will be hard-pressed to build the new plants necessary to supply base power to growing power consumption areas.
The result could be more brownouts or even blackouts, or the need to buy power at high prices from other areas of the country.
The environmentalists are right to argue that we need to move to alternative and renewable energy, but they are at this time incapable of providing base-line power.
While Otter Tail Power Co. has invested more than $300 million in wind energy generation during the last three years, MacFarlane said dispatchable generation remains an important need for Otter Tail Power's customers. As a result, over the next three to six months, Otter Tail will continue to evaluate other options to meet its customers' need for reliable electricity.
Without coal-fired electricity to support the baseload, other alternatives must include nuclear power, which can provide baseload. Work must continue to develop other sources, such as wind and solar, but they will not support baseload power generation for many years.
The effect of pending federal climate change legislation will also affect how we receive power, and for how much.
How to continue to supply abundant and affordable power in the interim as we reach future emissions standards and high use of renewables is a huge policy question with an even larger potential price tag.