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Can Distributed Energy Resources displace the need for a transmission project?

Rao Konidena's picture
Independent Consultant Rakon Energy LLC

Rao Konidena found Rakon Energy LLC because Rao is passionate about connecting clients to cost-effective solutions in energy consulting, storage, distributed energy resources, and electricity...

  • Member since 2014
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  • Oct 23, 2020

With FERC Order 2222 on DER Aggregation, FERC Order 841 on Electric Storage Resources, and now a complaint at FERC by Earth Justice on behalf of Voltus, a commercial and industrial demand response aggregator - DERs and demand response are in focus.

The big question is, will DERs displace the need for a transmission project? The answer is, yes, of course. Though there are limited examples today.

For example, take this quote from the current CAISO CEO when he was BPA Administrator, “The Bonneville Power Administration will not build the I-5 Corridor Reinforcement Project, a proposed 80-mile, 500-kilovolt transmission line that would have stretched from Castle Rock to Troutdale, Oregon”

He is referring to a transmission project need that is addressed by non-wires alternatives including energy storage and electrical flow control devices.

Now, take the benefits of participating in PJM RTO. PJM claims the range is $3.2 billion-$4 billion. MISO claims $3.6 billion in benefits. Both RTOs have a "Value Proposition" on their website for additional details. The cost of MISO RTO is $300 million. The benefit to cost ratio for MISO is 12. 

One can argue the DERs cost is lower than a transmission line. But T line proponents argue that, its a fixed asset with 40 year life span. Didn't MISO just gain FERC approval for a SATOA for the same 40 year Present Value Revenue Requirement, for an energy storage project?

I think as an industry we need to inform ourselves of DERs and their abilities to displace transmission lines. Because as we saw with the costs and benefits of RTOs, these financial numbers are huge. And ultimately customers pay the cost. So, we owe it to the customers to look at all alternatives to transmission solutions including DERs.

Matt Chester's picture
Matt Chester on Oct 23, 2020

 And ultimately customers pay the cost. So, we owe it to the customers to look at all alternatives to transmission solutions including DERs.

Not only to transmission lines cost ratepayers, but with DERs they can finally get some buy-in and get more to the prosumer side of things, have a level of control not available previously. For the customer, I think it's an easier decision-- it's how much the utilities will come along for that ride into the new normal of the industry. 


Roger Arnold's picture
Roger Arnold on Oct 25, 2020

Beware broad, unqualified generalizations. Can distributed energy resources displace the need for a transmission project? Absolutely! It's not hard to find instances where they have done so. Especially in regions where VR penetration is low, and especially if the DER in question is storage capacity. But do they, typically? No, rather the opposite. They tend to increase the need for transmission projects. Especially in regions where VR penetration is high, and especially if one excludes storage capacity as a DER.

Among proponents of a "100% renewables" energy economy (taken to exclude nuclear), expanded long distance transmission capacity has long been the leading candidate for taming VR intermittency. "The wind may not be blowing here at this time, but it's sure to be blowing somewhere else. All we need is the transmission capacity to import its output." Or "the sun may have set here, but a few time zones to the west it's still just mid-afternoon." If transmission were free, then pigs could fly. Or something like that.

In the last few years, it seems to have been sinking in that transmission is not free, not environmentally all that benign, and not popular with those who own land near proposed transmission corridors. Most of all, it's not easy to clear the litigation and the long, arduous permitting process. So there's been a big swing in favor of energy storage. Battery storage for short durations (2 to 4 hour scale) and green hydrogen as the ultimate solution for long durations. 

Mostly thanks to Tesla, battery storage has proven spectacularly successful for firming the output of wind and solar farms, buying time for orderly ramping of fossil-fueled plants, and stabilizing voltage and frequency on the grid. It's now sufficiently affordable to replace gas peaker plants for meeting peak demand. Green hydrogen for energy storage has problems, but it's only been implemented in heavily subsidized demonstrations. Its deficiencies haven't yet hit proponents squarely in the face.

Dr. Amal Khashab's picture
Dr. Amal Khashab on Oct 25, 2020

I think no , but transmission can complement the intermittent renewable energy. I would like to draw attention to Boston University ,Institute of sustainable energy dated September 2020 and entitled " The value of diversifying uncertain renewable generation through the transmission system" 

Jim Stack's picture
Jim Stack on Oct 27, 2020

Great insite Rao. This is a timely point about battery storage and renewables. They both can reduce the loads on T lines. Yet i think we still need T lines to help balance the power between areas. They can be smaller but are still needed. 

 Just like an Off GRID home with no GRID connection. It can only help itself and can't share any excess clean power produced without being part of the GRID.  If an unexpected need with 6 family members visiting they would be in big trouble. On the other hand if they go awsy for 2 or 3 weeks all their excess production is wasted. The GRID and T lines can help us all work together. 

Rao Konidena's picture
Thank Rao for the Post!
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