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Solar and Wind Power Require Overhaul of Electric Transmission Grid
New electricity from wind and solar sources could increase the regularity of blackouts and reduce the reliability of the nation's electrical grid according to experts. Energy from these new sources will impose new demands on a transmission system that was not designed for large power transfers over extremely long distances.
The North American Electric Reliability Corporation stated recently that unless significant measures are taken to improve transmission of electricity, the rules requiring reduction of carbon dioxide emissions by utilities may impair the reliability of the power grid. The corporation is the industry body authorized by the federal government to enforce reliability rules for the interconnected system of electrical power generation and transmission.
The challenge will be to transmit wind power from wind corridors such as the Dakotas through Texas to population centers such as Chicago and Florida. Carbon emission initiatives will create new pressures on the old grid. Renewable energy may form a larger portion of electricity supplies without reducing reliability, provided improvements are made in the transmission lines.
The overhauled electric system that has been created in the last 20 years suffers from inadequate transmission capacity. Independent power producers have built generating stations that compete in a geographically broad market and serve distant consumers. Utilization of the antequated transmission system is closer to its limits more often than at any time in the past.
Certainly, the greenhouse gas concerns and electric utility reliability are on conflicting paths. Experts have been recommending construction of new power lines for several years. However, this is quite difficult in many regions because of the reduced political power of utilities and the increased influence of environmental groups seeking to protect environmental systems. The need to construct new power lines to connect distant urban regions with areas with potential for power generation from solar and wind sources requires a new planning framework and a broad perspective.
A National Power Grid to Meet Renewable Power Initiatives
The Federal Energy Regulatory Commission (FERC) must deal with the infrastructure problems in connection with renewable fuels. Interstate lines concern the national interest so there needs to be an appropriate role for the federal government. The grid must be treated as a multi-state resource similar to interstate highways. People will be reminded of the interstate nature of the grid when they recall how an accident in Ohio in 2003 caused a blackout that stopped power for 50 million people in eight states and parts of New York City and Ontario, Canada.
The FERC would be responsible for creating a unified, coherent regulatory framework that would balance local, regional and national needs for transmission lines similar to its authority over interstate natural gas pipelines. In order to develop a reliable interstate grid, support wholesale markets and meet the climate change concerns, the FERC projects that the price for the necessary transmission infrastructure over the next two decades would be in the order of well over $200 billion.
Experts believe that althought the initial costs are large, the new grid will lower electricity prices and offer other long-term payoffs. In other words, the development of a national grid would give all markets access to the least expensive power regardless of location which would lower price volatility and provide greater efficiency so power plants may be allowed to operate on a more level basis.
Critical decisions need to be taken regarding the location of new facilities such as how local and environmental interests would be integrated, which lines would fall under federal jurisdiction and how to carefully weigh alternative solutions to new transmission. For example, alternatives such as distributed generation, more efficient load management and strategically located power plants may reduce the need for additional transmission infrastructure.
Regional and State Priorities
Because the system is a product of the interdependence of its parts, establishing the new transmission grid may conceivably be handled effectively at a regional or state level. However, the need for greater renewable power and a national grid will likely meet strong resistence by state regulators, environmental groups, local utilities and regional interests.
There are many pre-existing interests which may raise roadblocks and self-preservation efforts. The national grid may be opposed by landowners who do not want unsightly power lines and by environmentalists concerned about damage to natural resources. There are vertically integrated utilities that do not want to compete with other utilities and regions that currently have abundant power generation and low electricity prices are concerned that their prices will rise when electricity is transmitted to distant regions.
In the Bush administration,a previous effort by FERC to standardize transmission pricing policy was met with heavy opposition. The FERC proposed a standard market design in order to create a national regime for pricing transmission to allow broader competition. However, state utility regulatory agencies, consumer groups, public utilities and 22 states i.e. states located in the Northwest and South that currently have excess power generation, fought the provision. These same groups may frustrate and delay progress toward a national power grid.
The FERC, under the 2005 energy law, received authority for the national interest to site transmission lines in the electric transmission corridors designated by the Department of Energy (DOE) in congested areas. DOE made two designations in the mid-Atlantic and the Southwest, both of which were challenged in court.
Southern California Edison attempted to take advantage of FERC's new authority. However, the process to request FERC siting authority for a transmission line linking Arizona and Southern California was heavily opposed. The failure of the transmission pricing proposal and opposition to FERC new authority seriously concern the proponents of national transmission policy.
There are competing and conflicting environmental goals of promotion of renewable energy requiring more transmission and preservation of natural resources. The National Resources Defense Council (NRDC) has already been analyzing tracts where power lines can be placed with reduced environmental impact.
The FERC believes that the establishment of a national grid needs to be implemented prior to agreement upon national climate policies because of the length of time required to build transmission lines. The FERC has been encouraging transmission investment using the authority Congress granted in the 2005 energy law, however the plans vary significantly by region.
One possible solution would be to adopt the model of the Highway Trust Fund funded by gasoline taxes to pay for highway construction. A transmission fund could be created and funded by transmission taxes on electricity bills. In that case, the construction would be paid by user fees. Users in one state would then pay for transmission facilities built in other states. Backbone high voltage lines to connect all major electric resources in the United States would cost in the order of $75 billion. It has been predicted that such a backbone investment would increase a electric customer's bill by a third of 1 cent per kilowatt-hour, however, the long term savings would be 2 cents per kilowatt-hour for the cost of the electricity.
Other issues involve tax incentives for landowners where transmission facilities cross their properties and the role of states in the process. The process will be accelerated if Congress creates a national renewable portfolio standard that would require that a certain percentage of the nation's electricity be generated by renewable energy sources.
Summary
Efficient transmission facilities are fundamental to taking advantage of renewable fuel resources. Of necessity, the federal government must play a key role in building the transmission infrastructure. In order to meet the renewable energy mandate, the national transmission corridor would link distant sources, e.g. Texas windfarms to the users in the Southeastern states.
Congress is at the initial stage of the process because there are many details to be agreed upon, particularly how to pay for the transmission lines. Power companies face the traditional quandary of whether to build power plants without transmission and transmission companies face the problem of building lines that may extend to non-existent plants.
Regional policies are disjointed and there is no national policy in place. In order for FERC to successfully obtain national siting authority, a concerted effort will be required because regional opposition and political battles are inevitable. Some have recommended that an integrated national policy must start with coordination and discussion including all stakeholders at local, regional and state levels that would manage transmission as part of an overall clean energy plan.
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