Why is the current transmission landscape a significant barrier to clean energy deployment?
The reason is simple: our transmission infrastructure was built in the early and mid-twentieth century to deliver energy from centralized generators to concentrated load pockets – cities, towns, and industrial centers. It was designed simply to provide for reliable operation of the central generation.
At the time, that central generation power came from nuclear and fossil fuels, so early transmission planning didn’t necessarily account for where there are abundant wind and solar resources. Early integration of renewable energy allowed developers to site these resources along the existing transmission system and make use of underutilized transmission capacity at minimal cost. Those optimal siting opportunities are no longer plentiful and, in most markets, entirely unavailable.
Yet federal and state carbon reduction goals are clear: we need significantly more renewable energy to help decarbonize our electric grid and address climate change. The challenge is that renewable energy – specifically places with the most abundant solar and wind resources – are primarily far from where old centralized generators are located and often far from load centers.
What are the big opportunities at the federal, regional, and state-level to address those barriers?
At a high level, transmission planning needs to be completely reimagined.
FERC’s transmission planning NOPR (notice of proposed rulemaking) is one such opportunity already underway. The interconnection study process is generally ill-equipped to enable generators to shoulder the cost of major transmission upgrades given the capital-intensive nature of these upgrades, the dependency on other interconnection customers, and the risk of getting the transmission built by the time the generator needs to interconnect to the grid.
Having a more integrated transmission and generation planning process will have two major benefits:
1.It will lower ratepayer impact by ensuring the right sets of transmission upgrades are selected and built to serve both the generators and customers receiving the energy. All too often, the upgrades that individual interconnection customers trigger are simply to address the individual or clustered interconnection requests and don’t consider future needs of generation and load expansion
2.More proactive transmission planning and construction will provide more timing certainty and allow energy developers to deploy energy quicker and more efficiently
The FERC’s Transmission Planning and Generation Interconnection NOPR and upcoming rulemaking should improve the overall process. However, it will require states, regional, and inter-regional transmission planners to appropriately identify the full and expanded range of economic, reliability, and societal benefits of transmission and generation expansion. That’s a lot of hands in the kitchen and a lot of ingredients to consider.
Once planning has been improved, there will need to be changes to the way and speed these transmission projects are permitted. Regional and inter-regional transmission projects often cross multiple permitting state and federal agencies, which can impede project approval in the planning process and ultimately prohibit construction. It’s clear that an expedited permitting process is essential to ensuring necessary transmission upgrades are placed in service.
Any good news on this front? Are there models today that others can replicate?
There are positive signs in regions like MISO and CAISO where there have been recent improvements in the planning process. Those regions are looking farther into the future and developing various resource portfolios to evaluate what transmission upgrades are required. Significant capacity-enabling upgrades are being approved and permitted to facilitate new renewable energy deployment. This is an example where clear state and federal policy can start to restructure the national transmission system to learn from the past and build the grid of the future.
What about Federal legislation? Are there legislative proposals to help address the need for additional transmission?
There are bills pending in both the House and Senate that seek to resolve issues with energy project permitting challenges. One part of this discussion is to address several aspects of transmission build-out, including how the costs of the transmission lines are allocated (how they are paid for), and jurisdictional oversight to ensure that regional projects covering multiple states can move forward. Portions of the permitting bills have bipartisan support in both the House and Senate. It is likely that some compromise version emerges over the next several months. The transmission sections are among the most controversial and may or may not be included in the final bill.