With energy markets and politics pushing change, states, regional power system operators and companies are making new moves to boost the U.S. transmission capacity needed to integrate a growing backlog of renewable power projects into the grid and move power to high-demand areas.

Brattle Economics estimated that up to $90 billion in transmission investment is needed by 2030 to support the a U.S. transition to clean energy, while the American Society of Civil Engineers in its September “Failure to Act” study estimated a $35.4-billion shortfall in transmission spending and a $100-billion shortfall in distribution investment.

A national response would be the best way to address transmission issues in the U.S., but finding consensus would be difficult, says Tracey Evers, market director for power delivery solutions at Mortenson, a leading builder of onshore wind projects.

An industry panel last month expected federal funding for transmission to be part of an infrastructure stimulus bill with Joe Biden's presidential win, despite uncertainties about the budget process, according to an S&P Global report.

Power Push

Some states are pushing forward. New York on Oct. 15 took action to ensure “timely and cost effective construction” of new, expanded and upgraded grid infrastructure. The state Public Service Commission set criteria to identify bulk transmission projects needed “expeditiously” to advance the state’s ambitious renewable energy mandates set in 2019 by delivering clean power to high demand load centers.

The state requires carbon emissions cuts of 40% by 2030 and 85% by 2050 against 1990 levels, and 100% of electricity used in New York to come from clean energy sources by 2040.  “These are not simply aspirational goals,“ said attorneys from Nixon Peabody in an analysis last month.

Noting that New York’s call for “transformational quantities of renewable energy ... requires smart new transmission,” Public Service Commission Chair John B. Rhodes announced new criteria to identify and expedite projects that can “unbottle existing and new renewables.” One agency priority is the second phase of New York Power Authority's 86-mile Smart Path Moses-Adirondack rebuild, which Rhodes termed “a critical link in our upstate grid.” It would add 950 to 1,050 MW of renewable energy sources. NYPA owns and operates about one third of New York's high-voltage power lines.

“New York is a good indicator about what can be done and a blueprint for how to get it done more efficiently,” says Jacob Merriman, Burns & McDonnell’s managing director for transmission. “It has set in place an aggressive vision.”

Regional efforts are also ramping up.

In a joint Oct. 18 letter to the regional grid operator, governors from Massachusetts, Maine, Connecticut, Rhode Island and Vermont called for reforms to the region’s electricity market design and transmission planning.

The region’s existing wholesale energy market fails to value clean energy investments required by states, they told ISO New England. States recommend a long-term integrated regional planning process to develop new approaches to unlocking onshore wind resources located far from load centers; integrate wind and hydroelectric projects; and broaden adoption of distributed energy resources.

Renewable project developers in Maine remain concerned as projects now push forward. The state adopted clean energy mandates in mid-2019, later than its regional peers, after Democrat Janet Mills became governor in 2018, vowing to overturn opposition to offshore wind by Republican predecessor Paul LePage. Dan Burgess, director of Mills’ Energy Office, said models show adequate transmission to meet demand for the next decade but “to unlock additional resources, it’s almost certainly going to include new transmission."

Cancelled Projects

A recent Midwest study found 245 clean energy projects had been cancelled, many because of a lack of available transmission. “The coupling between wind and solar growth and transmission is very tight,” James McCalley, an Iowa State University engineering professor who studies electrical transmission, told a panel in late October sponsored by a pro clean energy group.

He noted there was a “discussion” of a major transmission system running north-south through the Midwest, according to the Des Moines Register. McCalley said that despite local transmission upgrades for some clean energy projects, “to really reach the level that is necessary is going to take significant additional investment.”

New renewable energy projects have skyrocketed within the large footprint of Valley Forge, Pa.-based PJM Interconnection, the country’s largest regional transmission organization. It includes areas of 13 states and Washington, D.C. “The number of interconnection requests at PJM has increased five times over in the past seven years, all driven by renewables,” says Merriman.

Other regional and independent transmission organizations now seek a balance between building large, expensive transmission systems to export high quality wind and solar generation to load centers, and smaller renewable generation near high demand areas, says Daniel Hall, director of electricity and transmission for the American Wind Energy Association’s central region and former chairman of the Missouri Public Service Commission.

A primary issue is allocating the cost of new transmission. The regional and independent operators were established to dispatch the lowest cost energy, which often means the generation developer must pay the cost to interconnect a project to the grid.  “The costs are exorbitant,” Hall says, which results in smaller clean energy projects built near loads, but not cheaper renewable energy from large projects reaching the market.

Victim of Its Success

Around 2011, MISO, the Midcontinent Independent System Operator with headquarters near Indianapolis, initially built 17 large transmission projects costing more than $5 billion to move low-cost renewable energy to market in order to help utilities meet state renewable energy standards.

“It was a complete success,” Hall says. Now those transmission lines are at capacity, he notes, but building a second portfolio of projects is not feasible

“MISO now is doing targeted studies to see where new generation can be brought to market efficiently,” Hall says. The operator is taking a measured approach with transmission owners and developers. “I’m optimistic we will get significant transmission built to benefit ratepayers,” he says.

MISO and Southwest Power Pool, the independent system operator just to its west, in September announced a review of how to move renewable resources from one side of the border, or “seam” between them, to the other.

“A fundamental issue facing grid transformation is the lack of transmission” at requested seam connection points, says Barbara Sugg, SPP president and CEO.

Hall says AWEA is generally optimistic the effort will result in an interregional project. But still needed is a broader integration of infrastructure and technology among the country’s three large transmission systems—the eastern, western and Texas grids—to send power back and forth, says Rob Gramlich, president of Grid Strategies LLC. 

The U.S. Energy Dept.’s National Renewable Energy Laboratory (NREL) on Oct. 22 released a more comprehensive “seam study” that looked at costs and benefits to add transmission access between the eastern and western U.S. There are existing connections between the two, but they cannot carry large volumes of power, said the review, which some say the administration has been downplaying.

The study shows that building transmission connecting regions across the U.S. could balance generation and load. It says reductions in installed generation and benefit-to-cost ratios ranging from 1.2 to 2.9 indicate “significant value to increasing transmission capacity between the interconnections and sharing generation resources.”

A report issued in July by the House Select Committee on Climate Crisis said an earlier draft NREL report showed that a national high-voltage direct-current transmission backbone could enable the U.S. to generate up to 80% of its power from zero-carbon sources and would save customers $47 billion.

The committee recommended that Congress provide financial support for priority HVDC transmission lines and that the Federal Energy Regulatory Commission designate where such transmission corridors are needed.

FERC oversees the national transmission system and wholesale power markets. “FERC can do a lot if they agree to do it,” says Gramlich. FERC’s current power market design limits renewable energy’s ability to compete against fossil fuel generation—a frustrating hurdle for many states setting new mandates and goals.

Federal Barrier?

In September, FERC rejected a proposal from New York’s grid operator to let renewable energy and battery storage compete against fossil fuels in its power market. FERC is actually “doing all it can to price renewables out of the market,” says John Moore, director of Natural Resources Defense Council’s Sustainable FERC Project. But grid operators are “feeling the heat from states” to redesign the market, he says.

NRDC found that more than 40,000 MW of proposed wind and solar projects were forced to withdraw for lack of transmission capacity in MISO. “We need long-term grid planning with renewable interconnection so the network is ready to accept new projects,” Moore said.

Added to the energy mix, and escalating the transmission challenge, is the 29 GW of offshore wind planned along the Atlantic Coast, with system ability lagging to adapt to the huge influx.

Burns & McDonnell’s Merriman says there are “not anywhere near” enough transmission points to accommodate onshore or offshore wind generation. “We need large long-term planning. We’re not doing enough to take our grid where it needs to go for the future,” he says.

Transitioning to the future also requires more resilient transmission and distribution grids that are both physically hardened and upgraded with new technology, Mario Azar, president of Black and Veatch’s power business, told ENR. Introduction of renewable energy sources, which are inherently intermittent, requires intelligent systems that can analyze and predict fluctuations, and control how systems react, he says.

Further complicating management of transmission system reliability is battery storage and connection of smaller renewable projects, Azar says.  

But risks have not prevented firms from boosting market plays. Leading global renewables developer NextEra Energy, which trades on the NY Stock Exchange, is growing its own transmission business, with its just announced $660-million acquisition of GridLiance from private equity owners.

The company currently owns about 700 miles of high-voltage transmission lines, and related equipment assets include three regional transmission organizations across six states. 

One online stock analyst said the deal “fits well strategically” for NextEra, noting that GridLiance “is well positioned to benefit from the substantial expected renewables growth over the coming years.”