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Whose job is it to build long-distance transmission lines, so that low-carbon resources in one place can be used in another, and how do they get incentivized to build them?

Bill Card's picture
Consulting Engineer CB&I Stone & Webster

Design, evaluation, and analysis of power plants and power plant cooling systems, including environmental and economic aspects. 

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  • Feb 28, 2021
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The outages in Texas have shown that we need long-distance transmission, so that low-carbon resources in one place can be used in another  Whose job is it to build these lines, and how do they get incentivized to build them?

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Let me add another piece to this robust discussion.  Yes, the regulatory process for building cost-allocated interregional transmission is broken and needs to be improved, which brings us back to a redux of Order 1000, innumerable FERC workshops and process, etc.  But it needs to get done.  But, that is not the only way.  Even with a better planning process, siting remains the biggest challenge, not the $.  Merchant overheard HVDC can handle the second problem but not the first (the economics of moving low cost and partially stranded RE to higher cost, RE short grid regions works).  Look at the SooGreen project.  It is a merchant, underground, rail-co-located, grid-tied (not generation-tied) HVDC line from MISO to PJM.  It will avoid the two dirtiest words in transmission: eminent domain.  Yes, we need all kinds of transmission development models, but hacking through the jungle of cost-allocated transmission planning is not the only way.

In India, it is the responsibility of Power Grid Corporation of India, Ltd (POWERGRID), a navaratna company under the Ministry of Power (MoP).  The company is responsible for planning, implementation, operation and maintenance of the inter-state transmission system (ISTS).  As on date, it has to its credit 169,313 ckm transmission lines, 225 sub-stations, more than 99% system availability and 427,565 MVA transformation capacities. In addition, it enjoys transmission related consultancy to more than 150 domestic clients with global footprint in 20 countries catering to more than 25 clients.  It further owns and operates 66,922 km of telecom network as well.

High capacity Power Transmission Corridors (HCPTC) implemented meets bulk power evacuation requirements of various Independent Power Producers (IPPs) some of which are in resource rich and coastal areas.

Understandably, it shoulders many responsibilities such as conserving Right-of-Way, minimise impact on natural resources, co-ordinated and cost effective transmission corridor and more importantly, flexibility in up gradation of transfer capacity of lines matching with power transfer requirement.  The company has been aiming at higher transmission voltages of plus or minus 800 kV HVDC & 1200 kV UHVAC.

It plays a significant role in distribution reforms through Deendayal Upadhyaya Gram Jyoti Yojan (DDUGJY) and Integrated Power Development Scheme (IPDS) on behalf of Government of India.  It further plays a major role in strong SAARC grid for effective utilization of resources – India & Bhutan, India & Nepal and India & Bangladesh.

Grid is a complex machine where electricity is generated at centralized power plants and decentralized units and is transported through a system of substations, transformers and transmission lines to deliver at end-user point, the Customer.  Power grid earns a regulated return on equity (fixed by the regulator) on commissioned projects which means assess addition is crucial for earning.

They have diversified into telecom as well to step up revenue and create value of stakeholders. It provides connectivity to all metros, major cities and towns including remote areas like Jammu & Kashmir and North-Eastern States.  They have been further successfully completed National Knowledge Network project of the Government connecting knowledge centres like, Indian Institute of Technology (IITs), Indian Institute of Sciences (IISCs)

It is responsible for implementing prestigious and State of the Art Renewable Energy Management centres (REMCs) for integration and operation.  Renewable energy forecasting, energy balance and generation schedule are a few aspects that are covered by them.  More importantly, POWERGRID acts as ‘nodal point’ in ‘India Smart Grid Task Force’ Secretariat for Government’s activities related to Smart Grid.  Green Energy Corridor is the scheme for renewable energy evacuation & integration. 

The idea of a national renewables electricity grid is "a rabbit trail that leads to a dead end, and all the while wastes precious time".

Transmission consultant and electrical engineer Dr. Gene Preston explains why:

"There is an argument going on now with the 'Green New Deal' and the proposed US national grid. A nationwide grid powered by rewewables cannot be built - the power levels and the number of lines needed is massive.  People are showing me studies they have done of a grid of 5 GW lines. That's fine, but that's TINY.  If you want to criss-cross the US, lines would need to be in the 500 GW range, and at least 70 GW would need to come to ERCOT.

NREL says they have put together a study using Plexos, a popular program in WECC, however their postings amount to an advertisement for more funding, and commentary about Trump shutting down the effort is just a diversion.

If NREL were to be funded to do this study the final outcome would be impossible to implement...this [a national renewables grid] is a rabbit trail that leads to a dead end, and all the while wastes precious time."

There you have it - from an expert.

egpreston.com

Long-distance transmission lines are usually constructed to meet the growing demand for electricity due to rapid development.

In general when you say “long distance” T-Lines, it mostly indicates voltages of 500 kV and 765 kV.

Investor-owned utilities (example: PG&E, SCE, XCEL, FPL) are the ones who undertakes a determination of the need for such lines.

State PSC (Public Service Commissions) review the proposal and after a stringent look-in, give the go-ahead for the line.

To the extent I know, these T-Lines often cross state borders (i.e.) transmission from one generating station in one state to consumption in another.

New T-Lines also need appropriate Substations at regular intervals for stepping down the voltage and facilitate local distribution.

The permit to construct new long-distance T-Lines is a long-drawn, systematic process which includes compliance with a host of local, state and federal guidelines.

Environmental concerns occupy a predominant place in the process. Protection of wetlands, wildlife, birds etc are some of the concerns.  

The other critical issue for the utility building them is actual constructability (i.e.) can a designed line be actually built?

What about mobilization of equipment and material? Is there proper access to the construction sites? Mountains? Poor soils?

he incentive to build new T-lines is mostly economical (financial) and keeping up with growth.

The other incentive is to phase out old, aging lines built decades ago and replace them with “green” lines.

(Most HV T-Lines in USA are more than 50 years old and nearing the end of their useful life, according to Infrastructure Studies).

One recent “green” trend is building vast solar or wind (turbines) farms to generate electricity and transmit the electricity via distribution lines.

The voltage of these lines is normally 35 kV although higher voltages are possible.

The length of the line is a function of the distance of the solar or wind farm from the final area of consumption.   

Who is responsible to build the transmission lines you describe?  There is not a simple answer to your question.  A state or group of states could combine and initiate a RFP process to acquire the transmission and the generation resources they desire.  This was attempted in New England, but the states could not agree upon their tactics (they came close to agreeing on the objectives).  As a result, MA went alone to acquire hydro power from Quebec and selected an affiliate of Avangrid to build the HVDC transmission line, which is currently under construction  MA negotiated contracts for the purchase of energy and capacity from Quebec and transmission service from the transmission developer (called a participant funded transmission line in ISO-NE - similar to a merchant transmission line).  Another ways is for states to request their RTO to conduct a public policy planning process to determine the most effective transmission solution to accomplish the public policy objective.  This has worked effectively in NY, where developers where chosen to build transmission to reduce congestion west to east and north to south.  The developers recently began construction.    It has not worked across RTOs (an interregional project) for a number of reasons.  Another way is for  transmission developers to work with the generation developers and customers (a distribution company or retail customers) and build a merchant transmission line where the revenue stream comes from contractual agreements.  There are many merchant transmission lines that have been built over the years and are delivering transmission service today.

As to incentives to develop needed transmission, FERC has a suite of cash enhancing and return boasting incentives that works well.  FERC has awarded these incentives to many projects.  FERC currently has an ongoing proceeding where they are revisiting these incentives in light of current market conditions.  The jury is out as to whether the incentives will be enhanced or degraded by the current FERC commissioners.      

Yooper Logic's picture
Yooper Logic on Mar 11, 2021

Good topic... one I did for my grad economics thesis back in the '70's!

My proposal was to treat interstate transmission the same way that interstate trucking / freight is handled, i.e., the same pricing for all based on weight.

This would not have to be a government run operation, but would report up to / thru a government agency, perhaps FERC. 

It would also provide and encourage designers, builders, operators to utilize innovations, efficiencies, and as per this topic, reliability.  And would level the "go to market" piece of the puzzle.

The whole premise would be to have transmission experts run the system; let generation and distribution be handled by entities that are expert in those fields. 

Storage could be handled similarly; grid scale with known tariffs.

Master Plan is needed , which already existing. Through the Interconnections Seam Study, NREL joins national lab, university, and industry partners to evaluate the benefits and costs of options for continental transmission across the U.S. electric grid. These interconnections would create a more integrated power system that could drive economic growth and increase efficient development and utilization of the nation's abundant energy resources, including solar, wind, and natural gas.

There are plenty of great EHV overhead and underground AC & DC transmission projects planned by incumbent utilities and developers alike.  

The money is there.   

The engineering and construction resources are there.  

The routing and permitting is always a challenge but projects in railroad and interstate highway rights of way and projects going underground make it easier.   

All we need to build more electric transmission to deliver renewable and low cost generation to load is an off-taker ( a buyer).  

And, as a reminder, ERCOT had thousands of miles of new transmission built within the confines of Texas.  The Competitive Renewable Energy Zone  (CREZ) projects were huge.   Lack of HV and EHV transmission inside the state of Texas (ERCOT’s boundary) was not the reason for massive outages during the February polar vortex.  

Dr. Amal Khashab's picture
Dr. Amal Khashab on Mar 6, 2021

A Transmission buyer needs to have another buyer of the transmitted power. A system has to be performed.

There are a couple drivers on these lines.  One is the cost advantage of moving cheaper power to an area that has higher cost.  I can think of several of these situations that were proposed on the grid, such as the Clean Line Energy HVDC proposals for about three lines (as I recall) to bring wind energy into the Chicago area and then into PJM. The wind was cheap energy because of the PTC. 

A second reason is the diversity of load patterns and weather between companies with large generation fleets such as ComEd and AEP, for example;. The 765kV line gave them enough interface capability to help each other by moving thousands of MWs either east or west depending on whether ComEd was seeing hot weather or if AEP and utilities east of them were seeing higher loads. This is a cost savings to them but also an increase in reliability using the concept of "help from interconnections".  You can prove this by doing an LOLE calculation which shows each utility needs lower reserves if they are connected together.

Remember, however,  that Texas is not connected to the rest of the eastern interconnection (for all practical purposes) for non-electrical reasons, so this is likely not an option unless the PUCT and the state change their position.

Long distance T lines indicate high voltage T projects to me. Which means FERC Order 1000 rules around Competitive Transmission apply. Hence independent transmission companies need to have a shot at this, along with incumbent transmission owners.

Regarding the incentives part of the question, there is a construct in the regulatory space today with regards to shared network upgrades coming out of generator interconnection queue projects. There is also something to be said about the "option to build" process, that enables interconnection customer to build transmission upgrades with the consent of the TO.

There is plenty of intent and interest in the industry to build out T lines and a T system. The challenge is getting all the stakeholders aligned to cost allocate the T projects. Something to be said about Grid Enhancing Technologies and Alternatives to Transmission Technologies also. Because the traditional definition of capital T transmission needs to change to include emerging technologies such as energy storage (thinking Storage As a Transmission Asset).

Dr. Amal Khashab's picture
Dr. Amal Khashab on Mar 6, 2021

It is , because it increase the Transmission system  resilience.

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