This report examines the economics of new transmission to deliver wind power from Wyoming to electricity customers in California. It looks at possible choices for meeting the last increment of California’s renewables portfolio standard (RPS) requirement—33% of retail sales by 2020—comparing Wyoming wind with in-state renewables likely to be available in 2017. 

Other recent studies take a system-wide approach to renewable energy expansion in California and the West.1 The purpose of this study is to match these system-wide analyses with one that focuses on a possible Wyoming-to-California transmission corridor, which a number of the regional studies suggest could accommodate cost-effective renewable energy delivery. By focusing on the Wyoming-California transmission corridor, this analysis replaces system-wide assumptions with inputs that are more specific, providing a more fine-tuned analysis of costs and benefits and enabling a more detailed assessment of risk. 

The results suggest that the economic benefits of developing the corridor exceed the costs under the array of future conditions tested in the analysis. Benefit-to-cost ratios range from 1.62 to 3.62 depending on assumptions about federal tax incentives in 2017, and depending on assumptions about the future costs of different renewable energy technologies. Where outcomes fall within this range will depend on: 

• Expectations about future technology costs. If large-scale solar photovoltaic (PV) costs fall significantly faster than the cost of wind power, the ratios will tend toward the lower end of the ranges reported here. 

• Expectations about future federal tax incentives. Reductions in the production tax credit (PTC) and investment tax credit (ITC) tend to favor developing the corridor, particularly if the reductions are even across all benefitting renewable technologies. If the changes significantly benefit solar and geothermal without benefitting wind, the ratios will tend toward the lower end of the ranges reported here. 

• Avoided transmission build-out in California. The ratios tend toward the higher end of the ranges when including the economic benefit of avoided transmission build-out in California, regardless of expectations about future generator costs and future federal tax incentives. 

Read more about NREL wind studies.