For the first time, everything needed to modernize and complete the transformation of the United States electricity system is within our grasp. And better yet, modernizing and transforming the grid has tremendous benefits across the board. There is no reason to delay and every reason to move ahead, especially with the urgency of taking action to decarbonize the energy system and to meet the rapidly growing market demand for renewable energy.
What’s missing is a transmission expansion plan for the electricity grid of 2030 and beyond— and a reasonable approach to pay for it. Infrastructure projects like transmission take a long time to plan and build, sometimes ten years or more, adding to the urgency of getting started.
Transmission is essential for the electricity grid to work efficiently and reliably. At the most fundamental level, transmission lines allow cleaner and cheaper electricity to get to customers and provide market access for new resources. Currently, there are over 90 gigawatts of new generation projects, primarily wind and solar, in the interconnection queue of the grid operator for the Midwest region (MISO). These projects are not moving ahead because the cost of the transmission upgrades fall almost entirely on the developers of the new projects, even though the benefits they bring will be felt broadly across the grid.
What are the biggest benefits of grid modernization? A modernized grid will be more reliable and resilient at a time when electricity is an essential service needed to meet basic needs, and when there is ever-increasing concern about severe weather events and physical or cyber attacks that could compromise the system and our way of life. A modernized grid will be more decentralized, use vastly improved control technologies, and have built-in redundancy, thereby improving reliability and resilience.
While there is legitimate concern about managing a much more dynamic system that comes with the clean energy transformation, operators are becoming more experienced with higher penetrations of variable generation, both locally and across the grid— and they have already managed occasional hours with grid penetrations as high as 50%, 60%, and even 70% without reliability problems. According to John Moura, director of reliability assessment and system analysis at NERC, “Variable resources can be reliably integrated, but they need to be cautiously planned and operated… You can have 30%, 40%, 80% renewable resources, you just have to plan and operate the system correctly.” Luckily, we have the time and resources to plan and operate the system correctly— with the MISO region currently getting just 8-10 percent of its annual energy needs from wind and solar power. But we need to start planning for this system and updated operations now.
A modernized grid can take advantage of cleaner, lower cost generating resources at a time when the U.S. generating fleet is old and in need of substantial new investment and when decarbonizing our energy economy is imperative. Recent reports show that even without subsidies wind and solar can already compete with other forms of new generation. This is not to mention anticipated future decreases in cost for wind, solar, and storage. Further, customers are demanding a cleaner, more affordable, and more sustainable energy system.
Modernizing the grid also provides major economic development opportunities across industries and across geographies. The solar industry is the fastest growing industry in the U.S. economy in terms of job creation. These jobs, and the jobs associated with the wind and storage industries, are good jobs, often in rural areas where an economic boost is welcomed and needed. As an example, according to the University of Minnesota Duluth, the $2 billion CapX2020 regional transmission expansion project in the Upper Midwest created 8,000 direct and indirect jobs and generated $1.93 in economic activity for every $1 spent.
And best of all, a well-planned, modernized grid can pay for itself by capturing huge efficiencies and economies through basic market mechanisms. Transmission connects the clean and low-cost energy with the customers. This is the path to the lowest cost energy future for all customers.
It’s time to develop a transmission plan for the year 2030 and beyond. Failure to do so will stall economic development in rural areas, frustrate market participants, prolong the lives of polluting, aging and uneconomic generators, and add unnecessarily to the carbon burden in the atmosphere.