Clean energy groups, allies call for overhaul of the transmission grid

Earlier this week 18 organizations led filed a 9-page letter with the Federal Energy Regulator Commission (FERC) calling for broad changes to policies to both spur investment in an expanded and modernized bulk power system and to recognize the benefits of transmission in long-term system planning.

2/3 of the organizations in the Grid Advancement Coalition are either renewable energy companies or organizations that advocate for expanded deployment of renewable energy. And while this was never stated in the letter it is not an accident that the changes in policies and expansion of the grid would be of direct benefit when incorporating high levels of wind and solar on the electric grid.

However, they have the support of a number of other organizations that represent other interested parties in the power system as well as a free-market think tank, and what was much more explicitly stated is that these changes could bring savings to electricity consumers writ large.

According to the joint comments:

Integrating the high-voltage grid between and across regions and interconnections will improve bulk power market transparency and efficiency to the benefit of the entire nation

What is being called for?

The organizations are calling for a refocusing and expansion of incentives to create an expanded, more efficient and modernized grid, independent ownership of the gird, and an incorporation of the benefits of transmission into long-term planning.

This includes a call for new incentives for “technologies and operational practices that optimize the capacity of the existing grid as well as the management and control of energy on the grid”, and the coalition argues that the current lack of incentives is slowing down deployment of beneficial technologies.

And of course there is a call for an expanded grid, or more transmission lines, which can bring power from distant resources to load centers. This is particularly important for wind and solar. In Texas the transmission lines built out through the Competitive Renewable Energy Zone (CREZ) program have been cited as a prime factor in that state putting a far greater capacity of wind turbines online than any other state.

The coalition is calling for a restructuring of incentives so that instead of paying transmission owners extra to accommodate for how hard it is to build long-distance transmission lines, FERC focuses “its evaluation of transmission incentives on the consumer benefits that proposed transmission investments supported by incentives will deliver”.

But it may be the call for independent ownership of the transmission grid which would be the most fundamental shift.

What about renewables?

The comments never mention wind, solar or renewable energy – which may be a strategic move, given that President Trump’s appointees to FERC are not likely to be swayed by advantages for renewable energy. However, this point has been identified by coalition members including Americans for a Clean Energy Grid.

Advanced Energy Economy noted that these policies could “unlock opportunities to integrate more renewable energy”, and also noted that the costs savings and renewable energy integration benefits are connected.

“With respect to new transmission infrastructure, our proposals would focus FERC’s policy efforts on the need to improve the transmission planning process for the interstate and inter-regional projects that are needed to access low-cost remotely located renewable resources,” Advanced Energy Economy Managing Director and General Counsel Jeff Dennis told pv magazine.

Studies looking at both the United States and other regions have consistently identified an expanded ability to move high volumes of electricity over long distances as a key need to integrate high levels of wind and solar.

This has also been borne out by the experience of individual nations. Denmark has been able to reach very high levels of wind on its grid – around 50% of total electricity – in large part due to extensive interconnections with Sweden, Norway and Germany, accompanied by rapid electricity trading.

Such improvements may be particularly important for the West Coast in the long run, as this is the sole region identified by pv magazine where wind does not counterbalance solar on a seasonal basis, and where the ability to import power from other regions is one way that the region could meet winter demand.

However, there are significant challenges to doing so. NIMBYs backed by conservationist organizations in New England recently defeated the Northern Pass transmission project to bring power in from Québec, and look like they will also defeat a similar proposal by Central Maine Power based on a different route.

And our analysis last summer found that the greatest current roadblock to integrating more solar and wind in California is not a lack of transmission lines, but the actual practices of managing the grid. Chiefly, we found that inflexible contracts between out-of-state generators and utilities are causing the state to import power at the same time that it is curtailing in-state solar and wind.

It remains to be seen if a realignment of incentives will help with either of these problems, by making the benefits of expanded transmission more obvious to consumers. However, what is clear is that as more wind, solar, batteries and electric vehicles are deployed, the entire grid needs to evolve – including the bulk power system.