Clean energy groups to propose FERC rules for national transmission system saving $47B a year

Dive Brief:

The American Council on Renewable Energy (ACORE) and Americans for a Clean Energy Grid (ACEG) on Wednesday launched a new campaign to build support for a stronger U.S. transmission system, including upgrades to interregional lines and the development of a nationwide, high-voltage direct current network.
The campaign, The Macro Grid Initiative, argues consumers would save up to $47 billion annually with a national electrical power system versus the existing, regionally divided system.
The groups say they will propose a new planning rule to the Federal Energy Regulatory Commission (FERC) that will encourage proactive transmission development that allocates costs efficiently and grows consumer access to renewable resources.

Dive Insight:

Along with saving consumers billions of dollars, an upgraded transmission system is key to reducing carbon emissions, combating climate change and ensuring the competitiveness of the U.S. economy, according to founders of the new campaign.

"We're looking to broadly educate policy makers and to some degree the public on the importance of upgrading the grid infrastructure we all rely on," ACORE President and CEO Gregory Wetstone told Utility Dive. "To be competitive, we've got to be making the kind of investments they are in China and Europe."

The clean energy groups envision an expanded nationwide and eastern grid, beginning with a focus on the regions served by the Midcontinent ISO, PJM Interconnection and Southwest Power Pool. ACORE and ACEG want to see transmission ties between the regional transmission operators (RTO), as well as to renewable generation centers.

Grid operators declined to comment on the transmission proposal.

Rocky Mountain Institute Principal Mark Dyson said there is much that can be done to improve transmission market efficiency by better interconnecting RTOs, though the enhancements are as much about coordination as new infrastructure.

"There is an important lack of co-optimization between grid operators," Dyson told Utility Dive. "New transmission across seams and better market integration could really help send the right signal for low-cost renewables in the middle of the country."

"This is going to save consumers a ton of money because it is so much more efficient to have a better-connected grid," said Wetstone. "We waste a huge amount of money now, just because the different grids are not connected and are not connected to the most efficient resource, which is renewables."

The campaign will largely focus on educating state and federal policymakers on the benefits of upgrading the nation's transmission system. That will include pressing for a high voltage direct current (DC) grid overlay that ACEG Executive Director Rob Gramlich said is being pursued in other countries.

Most of the nation's transmission system is alternating current (AC), Gramlich told Utility Dive, and adding DC capabilities would allow more energy to be sent from remote wind and solar projects with less loss. DC transmission reduces the ability to interconnect along transmission routes to existing AC systems, however. "They have advantages and disadvantages. Any good transmission plan will probably include both," Gramlich said.

Dyson said there are technical reasons the U.S. system has been a predominately AC buildout, though there are instances where DC transmission makes sense. It would allow renewable generators to "skip constraints in the middle, when you know there is load a long way away," he said. "There are clear differences in price between renewables at one end of the line, and fossil fuels."

The value of DC transmission "really starts to become apparent once you are at a much higher share of wind and solar in this country then we are today, but it's important to start building and planning for those projects now because they'll take time," Dyson said.

A report released this month by University of California, Berkeley examines the technical and economic feasibility of reaching 90% carbon-free electricity in the United States by 2035. It concluded a $100 billion investment in new transmission is justified. According to RMI, that would add about 1% to 2% to electricity rates "while enabling the delivery of wind and solar that ultimately reduce bills," said Dyson.

There are opportunities for significant regional and interregional grid expansion, according to the transmission coalition.

"There are tremendous resource areas of wind and solar, particularly in the Central region," said Gramlich. But "there's been very little inter-RTO transmission built, even though FERC tried to do it in Order 1,000, 10 years ago."

While drafting of the FERC planning rule proposal is still in the early stages, Gramlich said it would be "next in the series of landmark planning rules that go back to the mid-90s, each of which increased the regionalization of the grid a little bit each time." The groups want to reverse that.

"We'd like to replace the current system with a proactive transmission planning process that takes into account all of the benefits of transmission including access to low-cost generation resource areas," said Wetstone. "It is more efficient for consumers in the long run."