Still, projects are only 10% of the grid investment needed to cost effectively decarbonize the system, it says, adding that with very long lead times required to permit transmission under current policies, “planning for needed capacity should be underway already,” the consultant says. The analysis was prepared for Americans for a Clean Energy Grid, a transmission advocacy group. 

A project is ready to go if its federal and state permits are completed or near completion, and if is pursuing cost recovery and cost allocation, says the report. 

Construction has started on 10 of 22 projects identified in a 2021 Grid Strategies transmission report because they had an easier path to cost recovery, the firm says. Those located in regions with less workable cost-allocation policies continue to struggle to move forward.

Champlain Hudson Power Express project, an estimated $6 billion privately funded line set to transport Canadian hydropower underground to New York City by 2026, already has cost recovery authorized by the New York Public Service Commission and New York State Energy Research and Development Authority.

Transmission Needs

The need for more transmission is fueled by load growth, more U.S. manufacturing, data center expansion driven by artificial intelligence, customer demand for clean power, favorable market trends for clean energy and the Inflation Reduction Act and other federal policies, the report says.

Meeting a 100% carbon-free target by 2035 requires energy generation capacity to triple from 2020 levels, including 2,000 GW of wind and solar, which creates “an urgent need” for more transmission investment— particularly in addressing resilience and security vulnerabilities in current aging infrastructure, says ratings firm Moody’s Investors Service in a Sept. 11 market note.

Transmission spending by investor-owned utilities rose to $27 billion in 2022 from $20 billion in 2014, with investments set to “remain elevated” for the next two years, says Moody's, citing estimates from trade group Edison Electric Institute. 

The 36 identified lines are a mix of alternating current and direct current, with the latter generally used for lines that are longer or at least partially underground or underwater. Some are single lines and some are groups of lines in a portfolio. 

The California Independent System Operator’s $7.3- billion transmission plan includes 45 AC and DC projects that would deliver more than 30 GW of new generation capacity to the state grid over the next decade. The $2.5-billion Soo Green underground merchant direct-current line planned along an existing railroad right-of-way from Iowa to near Chicago was proposed in 2019 and permitting is progressing, but major grid operator PJM Interconnection considers the line to be a generation project and its permitted is paused until 2024. 

Grid Strategies estimates projects can create about 1.3 million jobs with 2 million more from the solar and wind construction they would accommodate. Most of the 36 projects are designed to access high-quality wind and solar resource areas. 

Transmission Fixes Proposed

Project siting and permitting remain a major obstacle. While state and local governments generally control the process, it is slow and can create “regulatory tension” with the federal government, further hindering transmission development.

To streamline project siting, Grid Strategies recommends giving the Federal Energy Regulatory Commission plenary federal jurisdiction to site high-capacity transmission lines similar to agency authority over natural gas pipelines.

Without a federal transmission investment tax credit, fewer than half of the 36 projects would be built in the near term. Previously proposed legislation not enacted was set to cover 30% of cost and would ease remaining cost allocation, says Grid Strategies. 

However the consulting firm foresees “opportunities" to include the provisions in new tax bills that are set for passage as soon as the end of 2023.  

Rep. Scott Peters (D-Calif.) and Sen. John Hickenlooper (D-Colo.) introduced on Sept. 15 the Building Integrated Grids With Inter-Regional Energy Supply (BIG WIRES) Act to attract bipartisan support for more renewable energy grid capacity. The bill aims to "build a power grid fit for the 21st century,” Hickenlooper said in a statement. An effort last June to include all bill provisions in enacted legislation to raise the debt ceiling was not successful.

According to one report, gaining Republican votes to pass Democrats' transmission legislation would require inclusion of National Environmental Policy Act (NEPA) energy project rule revisions—a contentious issue.

DOE also seeks to push efforts in announcing this month grants totaling $300 million for states, tribes and local governments to fix their transmission siting and permitting processes.  

“With the dramatic changes to our generation fuel mix ... it is obvious that [regional and independent grid operators] must recognize the urgent need to connect even larger geographical areas to mitigate extreme weather events and generation shortfalls," said Kelly Speakes-Backman, executive vice president of developer Invenergy, in a recent opinion. She calls for operators to "step up their leadership on interregional transmission, [which] "have fallen woefully short." 

But grid operators have opposed some key looming changes. 

In response to a U.S. Energy Dept. proposed National Transmission Needs Study released in early 2023, the Southeastern Regional Transmission Planning organization, a planning forum for utilities in that area, voiced concern that building more transmission links could allow some regions to “lean on” adjacent ones too much, and that larger planning roles for DOE and FERC could lead to unlawful federal involvement in state energy authority.