Public policy, competitive energy markets, and solar and wind investment tax credits (ITC) and production tax credits (PTC) have stimulated substantial growth in renewable generation. Our aging high-voltage electric transmission system needs upgrades to accommodate the growth in renewables. Many components of the existing transmission system have reached their end of life. The time to comprehensively plan and invest in transmission infrastructure upgrades has arrived.
The transition to renewable generation has been taking place for many years and has accelerated recently with an increase in volume of generation interconnection requests for solar and offshore wind renewable generation. For example, in the PJM regional transmission organization (RTO) region, the number of generation interconnection requests has increased by a factor of 5, mostly dominated by an 800% increase in solar generation interconnection requests and a substantial increase in energy storage interconnection requests.
As generation types have transitioned from carbon-based generation resources toward renewable energy sources such as solar, onshore wind, offshore wind and hydro, several large transmission network projects have been planned and constructed to support the generation resource transition. The National Renewable Energy Laboratory (NREL) source maps illustrates current resources in North America for wind and solar.
To optimize the benefits of renewable generation, transmission upgrades are needed to reduce congestion charges and take advantage of the reduced fuel costs available from renewables, making it possible to pass along those savings to customers. Upgrades also improve reliability and resiliency of the system and reduce the impact of large weather events that cause billion-dollar outages and restoration demands.
There are some examples of large transmission system upgrade programs that have been successful in promoting construction of transmission lines to support integration of renewables in electric power markets:
- Integrated transmission plans in Southwest Power Pool (SPP).
- Texas Competitive Renewable Energy Zones (CREZs) have enabled 18 gigawatts (GWs) of wind and other renewables.
- The Midcontinent Independent System Operator’s (MISO) Multi-Value Projects (MVPs) transmission system upgrades are planned to facilitate transfer of 30 GWs of wind.
A new wave of renewable investment is coming rapidly to the Mid-Atlantic and Northeastern U.S. Almost 29 GWs of offshore wind generation is planned to be in service off the East Coast of the U.S. by 2030. Additionally, public policy in New York is rapidly accelerating the transition to clean energy. In a recent win for the renewable generation industry, the recently signed COVID-19 relief bill contains extensions of the ITC for many renewable generation technologies, extension of the PTC for onshore wind, and implementation of a five-year ITC for offshore wind, giving a big boost to the U.S. offshore wind industry.
Acquiring the necessary permits to upgrade transmission lines is a challenge faced by transmission asset owners. Before construction of a new high-voltage backbone transmission facility, the transmission asset owner proposing the upgrade typically is required to submit an application to the utility commission, with the application highlighting the benefits and importance of building the new transmission line. The application process can take anywhere from 18 to 30 months and includes such activities as:
- Addressing landowner concerns.
- Estimating costs and construction time.
- Holding hearings with the impacted communities.
- Identifying environmental, wetlands, historical and cultural impacts.
This is a lengthy process and can pose several challenges to utilities and system operators while preparing the report. Partnering with specialists and employing advanced technology for system analysis can assist in preparing a comprehensive report and addressing the construction needs for building or upgrading transmission lines.
While some states are slowing down the permitting process for transmission line construction and requiring more justification for such upgrades, other states are rapidly adjusting policies to support the building out of additional transmission. The state of New Jersey recently requested that PJM include onshore and offshore options for construction of a transmission backbone in its transmission planning process. A more systemwide approach using an open access offshore transmission facility could more efficiently and cost-effectively facilitate New Jersey’s plan to integrate 7,500 megawatts (MW) of offshore wind generation. The state of New York recently announced policy changes to expedite its Article VII transmission approval process along with capital investment planning and construction support.
There are varying challenges in moving many transmission upgrade projects forward, but the positive momentum and tangible impact of the renewable generation shift is accelerating friendly policy changes at a rapid pace. It is an exciting time to be involved in the transmission industry!
The U.S. offshore wind market has potential to supply vast amounts of clean, renewable energy to millions of homes and businesses. Turning it into reality will involve addressing many challenges, including how to connect this offshore generation to the onshore electric grid.