A regional transmission system: good idea but messy politics
- Dec 11, 2021 3:46 am GMT
A recent study funded by the U.S. Department of Energy shows that if the 11 western U.S. states collaborated on a regional electricity market, the region could see an annual $2 billion in savings by 2030.
Although collaboration between Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming could provide savings, it would take regional coordination and a commitment to interstate transmission that has, until now, not existed.
“With some of the most ambitious clean energy goals and unique resources, the Western States are showing leadership to support a reliable, secure, and flexible grid,” said Pat Hoffman, Acting Assistant Secretary for the Office of Electricity, in a September press release. “Strategic planning and coordinated management are critical components to identifying and prioritizing solutions."
The study sees a regional transmission organization to be the most effective path of collaboration for the 11 western states. An RTO consistently scored the highest against bilateral, real-time and day-ahead market structure in areas such as opening opportunities for clean electricity resources to be added to the grid, providing transparent and timely information on pricing, operations and emissions and on the ability to unlock the potential of existing transmission systems and lowering transmission costs.
For the 11 states to move toward an RTO system would not only be a massive bureaucratic undertaking but would likely spark some political flares. The western states are far from homogenous. Wyoming, for instance, produces the most coal in the U.S. Utah relies on coal power as well to power its state. It's not hard to imagine California, Washington or Oregon feeling uneasy about a partnership without commitments from these states to reduce coal production, or at least increase renewable production.
Additionally, while a western-wide collaboration on a regional transmission organization offers savings, each state seems to be doing okay existing within their own power markets. Relinquishing that to a collaborative system may be a hard sell, for now. Nailing out the governance structure would be important.
Is collaboration the future? It's hard to say, especially in the west. The savings, according to the study, are there, but the varied politics across the region and the work and resources needed for coordination make collaboration unlikely until its necessary.
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