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Keeping the Lights On: How Transmission Reform Can Spur a More Cost-Effective and Resilient Grid

Keeping-the-Lights-On-How-Transmission-Reform-Can-Spur-a-More-Cost-Effective-and-Resilient-Grid

A regionally connected grid, with secure transmission lines, would prevent price spikes, save lives, and keep the lights on.

rob gramlich – aceg

By Rob Gramlich – Executive Director, Americans for a Clean Energy Grid

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Regionally connected transmission lines: crucial in preventing disasters

Last month, three winter storms hit the U.S. South, leaving 4.5 million people and many businesses without power. The events caused at least $195 billion worth of property damage and killed over 80 people.

Texas was hit particularly hard by the cold weather and experienced widespread power outages as the state found itself with many resources that were knocked offline. While states to the north of Texas experienced the same weather pattern, they were able to import much more power from other areas. Texas’ grid failure had many causes; however, a pivotal piece to this failure was its limited transmission connections to neighboring states and regions.

A regionally connected grid would prevent price spikes, save lives, and keep the lights on. It would connect areas with abundant energy sources to regions with high demand and allow areas with generation to spare to ship capacity to those areas in need.  

More investments

Texas’s situation is a stark reminder that America’s transmission grid is outdated and too inefficient to support a modern economy. In fact, most of the nation’s transmission lines were constructed in the 1950s and 60s and have a 50-year life expectancy, meaning the current grid is operating well-passed its intended lifespan. Therefore, this is increasing electricity bills for all customers and making the country more vulnerable to grid outages and national security threats.

There are significant policy roadblocks in how we plan, pay for, and permit transmission, which are stunting grid development. In the last decade, regionally planned transmission investments have decreased by 50 percent, and almost no new interregional lines have been planned.

The current system requires individual generators to pay for shared network upgrades, which has discouraged project developers from connecting to the grid. For example, at the end of 2019, 734 gigawatts of proposed generation were waiting in interconnection queues nationwide. Thus, this current cost allocation method and associated queue logjam disproportionately affect renewable resources as these projects locate in remote areas and require more transmission to reach the grid.

Planning for the future

As a result, renewable projects that enter the queue stop with unreasonably high network upgrade costs, and developers drop out to avoid paying them, which prevents job creation, especially in rural areas where many of these projects are.

As climate change increases the severity and frequency of natural disasters, the nation’s electric grid must receive proper upgrades. Moreover, resiliency investment. For instance, in our report, Planning for the Future: FERC’s Opportunity to Spur More Cost-Effective Transmission Infrastructure; we urge the Federal Energy Regulatory Commission (FERC) to modernize our transmission system. Thus, by reforming regional and interregional planning and cost allocation methods.

Indeed, adopting these transmission policies would deliver considerable benefits to America, such as the significant reduction of customer electricity bills. In a study looking at transmission interconnection in the Eastern U.S., the authors found that transmission expansion would cut consumer electric bills by over $100 billion cumulatively, decreasing the average electric bill rate by more than one-third; saving a typical household more than $300 per year.

Modernized systems

A modernized transmission system would also make America’s grid more secure, reliable, and resilient. Thus, in the face of local resource failures, regional transmission operators would be able to pull from an array of available generation sources to avoid outages. Therefore, the ability to share electricity between regions will become increasingly necessary; notably, as the share of renewable energy on the grid rises.

The Texas crisis is still under investigation. Notably, this was likely, in part, due to inadequate foresight and resiliency investment up and down the gas and power production and delivery systems. But interregional transmission connections helped their neighbors to the north. Besides, they tend to support any region when it presents severe weather.

These benefits can only be possible with grid capacity upgrades to meet this need.  Finally, FERC has the opportunity to spur transmission investment to modernize the grid. Also, to improve resiliency, lower customer costs, and lead the nation toward decarbonization.

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