ANALYSIS-Lack of new power lines threatens renewable growth

By Nichola Groom

NEW YORK, June 20 (Reuters) - While companies scramble to drive down the price of power produced by sun and wind, many say a dearth of transmission lines in remote areas ideal for wind farms and solar plants is a bigger impediment than cost to spurring U.S. growth of renewable energy.

Demand is soaring for renewable energy projects to help reduce both pollutants and consumption of ever-costlier fossil fuels. At issue for developers of wind and solar projects, however, is that the resources to power them are most abundant in sparsely populated areas such as the Southwest's sun-baked Mojave desert and the blustery plains of the Midwest.

Building lines to channel that clean electricity to urban areas will be no small task, and renewable energy executives at a conference in New York this week warned that many planned solar and wind projects may never see the light of day if policymakers do not expand power grids to accommodate them.

"Unless we figure out a way to move capital into transmission, moving power from the Dakotas to Chicago or from the Mojave to Los Angeles is going to be a great dream," Dan Reicher, the executive in charge of Google Inc's (GOOG.O) green energy push, said at the Renewable Energy Finance Forum.

He added that the progress of new transmission "in many respects will define whether 2 percent or 20 percent of U.S. electricity is renewable."

Problems integrating renewable power with the grid are already playing out in Texas, the state with by far the most wind power.

Major power lines are needed to transfer wind generation from West Texas to Dallas, Houston and San Antonio, where electric demand is highest, and congestion on the state's grid has sent power prices soaring.

Texas power regulators are weighing the benefits and costs of new transmission lines that will cost several-billion dollars to build, but executives said grid operators would not be the only ones to foot the bill for such projects.