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08 Sep 2009

Pumping Up the Grid: Key Step to Green Energy

The U.S. can build all the wind turbines and solar arrays it wants, but until it does something about improving its outmoded electricity grid, renewable energy will never reach its potential. What we need is a new electricity transmission system, with the costs shared by all.
By michael noble

As America gets serious about the twin crises of oil dependency and climate change, many analysts believe that wind power — and eventually solar power — will make the largest carbon-free contributions to a new energy supply. But America’s aging electrical transmission system is renewable energy’s Achilles heel, and unless a broad policy consensus to upgrade our electrical grid is forged soon, the potential of wind and solar power will be vastly diminished.

Three things are needed to solve the challenge of renewable energy transmission: good technical planning, permitting and siting processes that can win public support, and broad agreement on how to pay the high cost of new power lines. Of these issues, the last one — gaining agreement on how transmission costs are spread among players — is currently the most contentious. To solve it, policymakers must come up with a plan to allocate these costs as broadly across the electricity system as possible — utilities, renewable energy generators, and consumers — since ultimately the whole system and all its users will benefit from a 21st century grid.

Today, achieving a national consensus on the importance of a better electrical transmission system is the single most important step toward vast expansion of clean, low-cost sources of energy. With every passing day, we can generate more and more energy from wind and solar power. The challenge now is getting it to the population centers where it is most needed.

Wind is the prime renewable energy source in my region of the United States, the Upper Midwest, and last year the U.S. wind market enjoyed massive growth, increasing the country’s total wind power generating
Our infrastructure is completely outdated for an economy that will increasingly run on clean electricity.
capacity by nearly half. New wind energy projects accounted for more than 40 percent of all electric generating capacity added last year, as the U.S. surpassed Germany as the world’s wind power leader. A recent federal study demonstrated how wind energy could grow from 1 percent to 20 percent of U.S. electricity generation by 2030. With automakers and policymakers increasingly agreeing that electric vehicles and plug-in hybrids are important to U.S. energy security, greening the electric grid is doubly urgent.

To reach this goal, wind turbines would have to be installed across the nation and offshore. However, in many cases the highest quality wind is distant from the most densely populated parts of the country, so a major investment in a more robust grid is essential.

Our current electricity transmission infrastructure — the power lines that stretch across the landscape, the substations, the power poles and distribution lines in America’s cities — is aging and severely strained. Though not on the brink of collapse, it is critical infrastructure that’s completely outdated for an economy that will increasingly run on clean electricity. Many lines and substations are old and operating at full capacity, unable to accept the energy from even a few dozen new wind turbines. Congestion bottlenecks limit the amount of energy that can flow across the landscape, like a multi-lane highway that narrows to a single lane.

Because wind and solar energy are variable in their output, having a strong interconnected grid system boosts the system’s ability to take on more and more renewables. For example, if it’s super-windy in Kansas, we could send the extra energy to Chicago where the wind is calm. Our current web of transmission lines is just not properly sized — or properly located — to allow vast amounts of energy to do that job.

Most Americans know little or nothing about how we manage electricity transmission, plan for it, and pay for it. Not only are these not popular topics for the public, they’re not an issue for most energy and environmental groups.

Here where I live in Minnesota, the Midwest Independent System Operator (MISO) manages and plans electric transmission in 13 states, from the Dakotas to Indiana. Its job, in part, is to run the electric system fairly and
Most Americans know little or nothing about how we manage electricity transmission.
openly — like the interstate highway system — so anyone can get on and move from here to there, without discrimination against any power supplier. MISO is doing an increasingly aggressive and thorough analysis of the transmission upgrades — including beefier lines, new corridors, and new substations — for multiple wind deployment scenarios, including the vision that sees wind as providing at least 20 percent of the nation’s electricity.

But MISO and similar agencies can only do so much with our outdated grid, which requires an overhaul involving government and the energy sectors at all levels — local, state, and federal.

The first hurdle is to streamline the permitting process. Wind energy farms can be built in a few months, but securing permission to construct high-voltage transmission lines can take five years or longer. This is not so much a technical problem as a social and political one. Face it: Nobody likes new transmission lines in their community or near their property.

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Just last month, the Transmission Agency of Northern California (TANC), including the iconic green Sacramento Municipal Utility District and the federal Western Area Power Administration, was forced to pull the plug on a 600-mile transmission project in northern California. I cannot speak to the merits of the line or its need, but there seems to be broad agreement that because the public process was poor, the affected communities essentially killed the project. Transmission proponents often act as if public support is an afterthought, presenting the lines as a fait accompli, and assume the public will simply go along with their assurances that the lines are well sited and critical to the electric system.

Too often the public does not get a real opportunity to clearly understand the purpose of the proposed transmission line, or a meaningful chance to help select the best route. If citizens along the proposed route feel that they are being taken for granted or treated unfairly, they will fight the project rather than shape it. Even a handful of dedicated opponents can delay a necessary transmission line upgrade for years.

The standard argument for opposing new transmission lines is the potential for conservation, rooftop solar, and other community energy solutions. Diversifying our energy sources in these ways is good. But remember that over the next two to three decades we must replace virtually all of America’s existing coal-fired power stations or retrofit them with carbon-sequestration technology (a dubious proposition) if we hope to avoid the most serious consequences of a changing climate. To make this switch without large-scale wind and solar power — and new power lines — will be impossible.

As difficult as siting is, we face an even more urgent problem — fair allocation of the costs of upgrading the grid. In my home state, Minnesota utility Otter Tail Power Company attests that MISO’s current rules for sharing the cost of new transmission to wind farms are unworkable. Currently, if a wind developer wants to connect to the electric grid of a
We should treat new transmission as a public infrastructure, like natural gas pipelines or transit.
utility, the wind developer pays half the cost, and the utility pays half. That seems reasonable, but wind energy resources in Otter Tail’s western Minnesota and North and South Dakota service area are so vast that the utility currently has connection requests for wind farms equaling 10 times the utility’s total energy need. To burden Otter Tail Power with these excessive interconnection costs simply doesn’t make sense. Without a fix, Otter Tail threatens to leave the MISO system, opting out of a voluntary wholesale electricity market that is, by all accounts, essential for the economically efficient operation of the U.S. power grid.

Unfortunately, MISO has proposed a remedy that’s worse than the problem. The power generators and transmission owners who have the majority voice in MISO now say that Otter Tail should pay nothing, but the wind developer should pay the whole freight. That proposal is pending at the Federal Energy Regulatory Commission (FERC), and a broad campaign is afoot to inform FERC that it’s a non-starter. In fact, it’s a solution guaranteed to stop wind energy development in its tracks.

What’s needed is what FERC Chairman Jon Wellinghoff has proposed to Congress: to give his agency the authority to broadly allocate the transmission costs throughout regional operating systems, like MISO. We should treat new transmission as a public infrastructure, like natural gas pipelines, bridges or transit, or high-speed rail. The solution is to spread the cost — which will reach many tens of billions of dollars — equitably across all electricity consumers. Not surprisingly, Wellinghoff’s proposal is generating opposition from some utilities and their political supporters. But the role of renewable energy transmission is too important to our energy future to let politics as usual stand in the way.

Over the past few months, parochial interests have hammered away at national grid reform in the House-approved energy legislation awaiting action in the U.S. Senate. Senate Majority Leader Harry Reid has identified upgrading the grid for renewable electricity as a key priority. Reid, his colleagues, and federal regulators must make it clear that transmission for clean energy is a pressing national priority — for our security, our economy, and our climate goals — that should be an important component of any climate and energy legislation.

Congress should mandate that the regional independent system operators plan the transmission systems we desperately need. We must have laws that require meaningful public participation in routing of new transmission lines; but environmental opposition must not stop transmission that’s crucial to protect the environment and slow global warming. Finally, our policies must spell out a method of sharing the costs of building a 21st century grid.

If the President, Congress, and FERC act together to create a new transmission system, America will inevitably realize its potential for renewable electricity. Otherwise we will stymie development of the clean energy that could be a cornerstone of America’s economic and environmental future.

ABOUT THE AUTHOR


Michael Noble is executive director of Fresh Energy, a Minnesota- based nonprofit that promotes clean energy. During 30 years working on energy issues, he has participated in public policy initiatives related to energy efficiency, renewable energy development, and reducing the Midwest’s reliance on foreign oil.

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COMMENTS


I'm generally in favor of the changes that the author recommends, but the issue is a lot more complicated than it might seem.

First, consider the author's statement:
"Congress should mandate that the regional independent system operators plan the transmission systems we desperately need."

Well, that's actually part of the problem. Federal Energy Regulatory Commission Order Nos 890, 719, and others, already assign key responsibilities to the RTOs (regional transmission organizations) and ISOs for regional transmission planning. But, as many wind energy developers have stated, the RTOs and ISOs possess a fundamental conflict of interest. As they plan new T lines, and as they determine how to allocate the burden of paying for the construction costs among their various key members (transmission-owning utilities), they must be careful not to offend their members, else the members (whose RTO/ISO membership is entirely voluntary) will balk at the bill and threaten to defect, as Otter Tail Power and Montana-Dakota Utilities have done in the case of the huge increase in transmission costs associated with new wind energy projects proposed in Minesota and Iowa, in MISO Group Study Area 5.

That is in fact why MISO decided to propose the new method for allocating the cost of transmission network net upgrades (Net-Ups) needed to accomodate new wind projects -- which has everyone up in arms, and which many resonsible voices agree is a cure worse than the disease. The case is laid out in FERC Docket No. ER09-1431, and the utility industry comments in that case (you can download them from FERC) illustrate how awful the new MISO cost method will be, and how it will likely stymie wind energy development in the upper Great Plains -- at least until MISO's RECB Tasck force gets around to debating its promised Phase 2 method for cost allocation..

As as long as this conflict of interest persists (i.e. that RTOs and ISOs must keep all their members happy, and so cannot do what is really necessary to break the logjam, w/o biting the hands that feed them), it will not help for Congress or FERC to assign grid planning responsibility to the RTOs/ISOs.

Second, beyond this conflict of interest problem, it remains that most FERC and state PUC regulations on transmission planning are geared toward solving incremental problems of system reliability -- such as frequency, voltage stability, and meeting N-1 first-instance contingencies, and maitaining an LOLP (loss-of-load probabilty_ of one day in ten years.

These engineering concepts are well-designed for a situation where the basic structure and design of nation's grid system is relatively static, and only requires certain tweaks to keep it current -- as opposed to today's situation, which calls for a complete overhaul of the portfolio of electric generating resources, and a complete redesign and reconfiguration of the grid in order to accomodate the new geographic locations of this new, overhauled gen portfolio.

These engineering rules are tied to outdated state rate-making rules that dictate that you cannot assign T line costs to utilities unless you can show that the given utility gets a very specific and identifiable benefit from THAT PARTICULAR LINE.a specific b

So merely assigning the planning responsibility to a different agency -- such as an interconnection-wide planning agency that encompasses multiple RTO/ISOs (such as PJM, MISO, SPP, NY ISO, ISO-NE, etc.) -- also will fall short unless the engineering principles that guide the planning are also revised.

Thirdly, at the end of the day, even if we get the grid planning done right, and set up viable methods for allocating the construction cost, there remains the looming threat of stranded investment as technologies change.

For example, there is considerable evidence coming out of the WREZ and California RETI programs (these are programs for identifying "Renewable Energy Zones in California and in the Western States) ) that installed caqpacity costs for distribution-level photovoltaic solar cells, located close to load (i.e., close to where the electricity consumers actually live and use the power) are falling so rapidly that distribution-level solar PV may be soon prove cheaper than wind energy located remote from load, once you factor in the huge cost of building new the new T lines needed to bring wind energy from remote locations, in places like North Dakota.

In short, if we solve the logjam and race ahead to build new T lines like crazy, to accomodate a flood of clean new wind energy turbines, we may find, in just a few short years, that solar PV is cheaper, and thus all those new T lines will become a useless investment -- "stranded" by changing economics.


Posted by Bruce Radford on 10 Sep 2009


Check out this link to how Denmark was able to join together high economic growth with a nearly stable energy consumption.

http://kemin.dk/EN-US/FACTS/DANISHEXAMPLE/Sider/TheDanishExample.aspx
Posted by Kristian on 22 Sep 2009


I agree with the issues you've raised. I've seen it time again with systems being so inefficient that what they waste is appalling.

A study was recently done on our local water supplier and found that due to holes in pipes, that they couldn't be bothered to fix, they wasted enough water over the course of a year to fill 3 football stadiums. And this is just leaky pipes, electricity diminishes a whole lot faster than this, and there is almost no point investing money in renewable energy if we can't even use it properly. Hopefully your voice is heard Michael
Posted by Natasha on 04 Nov 2009



 

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