Regional Planning Needed to Ensure Future Grid Reliability

Several recent federal actions could help the U.S. modernize and expand the electric grid infrastructure to meet increasing future demand and ensure security.

Analysts and regulators have been sounding alarms for several years about the future reliability of the electrical grid, with a recent North American Reliability Corporation analysis stating that there is clear evidence of potential energy shortfalls in the coming years based on demand, transmission capacity, and retirement and addition of power plants and renewable resources. NERC is the not-for-profit electric reliability organization for North America, subject to oversight by the Federal Energy Regulatory Commission (FERC).

A recent report by the Energy Futures Initiative (EFI) Foundation, took an in-depth look at how a lack of grid transmission capacity impacts the ability to finance and deploy clean energy at the right pace and scale and made suggestions for how to improve the problems plaguing grid modernization.

The report found that planning and building a transmission project takes years and while many are waiting for approval in the interconnection queue, they cannot obtain financing because they have no contracts in place to guarantee the investment. There are also disagreements over how project costs should be allocated, permitting delays, and challenges from groups who do not want additional transmission towers.

The report had three major conclusions that should be considered in electric transmission planning and cost allocation:

• Long-term regional transmission planning over a 20-year time span is crucial to ensure adequate budgeting to meet future needs;

• Methodologies to quantify transmission benefits should be used when looking at future projects so that “stakeholders who do not prioritize climate goals can trust that the non-climate benefits still exceed costs”; and

• Decisions about who pays for the costs of modernization be simplified and integrated into the planning process.

Recent actions from the Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC) address some of those areas.

The DOE announced its preliminary list of 10 potential National Interest Electric Transmission Corridors (NIETCs) that would speed up development of transmission projects in areas with an urgent need for more electricity. It also announced availability of direct loans for project in those designated areas funded by the Inflation Reduction Act.

Several days later, FERC announced a new policy that requires regional transmission operators to conduct and periodically update long-term transmission planning over a 20-year time frame to anticipate future needs. It also provides for cost-effective expansion of transmission that is being replaced, when needed, known as “right-sizing” transmission facilities.

There are 10 regional transmission organizations that coordinate the power grid in various regions of the country. PJM Interconnection is the RTO for Pennsylvania, 12 other Mid-Atlantic states and Washington, D.C. These RTOs are interconnected and can share some of their power in emergency situations.

The federal actions are aimed at helping the nation rapidly expand its high-voltage transmission capacity to meet increasing needs, which will continue as efforts to meet climate goals through electrification of transportation and other processes move forward. It will also allow clean energy sources to more rapidly be added to the grid supply.