As Benjamin Franklin walked out of Independence Hall after the Constitutional Convention in 1787, someone asked, “Doctor, what have we got? A republic or a monarchy?” To which Franklin responded, “A republic, if you can keep it.” Electricity Grids and Secure Energy Transitions, the International Energy Agency’s recent report basically delivers a similar blunt and ominous answer to a similar and rather critical question. Can we make a successful transition to a sustainable energy future? Only if we have sufficient transmission capacity.
The IEA’s special report offers a first-of-its-kind global assessment of the world’s high voltage transmission grids, pointing out – surprise – that they are not keeping up with the fast pace of development in renewable energy additions that are now taking place across the globe.
According to the IEA, at least 3,000 GW of renewable power projects, of which 1,500 GW are in advanced stages, are waiting to be connected to the grid – equivalent to 5 times the amount of solar PV and wind capacity added in 2022. It says inadequacies in transmission networks are becoming a bottleneck for transition to a net zero emission future.
The number of projects awaiting connection worldwide is likely to be even higher, as data on such queues is available only for countries accounting for half of the global wind and solar PV capacity. While investment in renewables has been increasing rapidly – nearly doubling since 2010 – global investment in grids has barely increased, remaining at around $300 billion per year.
The IEA estimates that the world needs to build, upgrade or replace roughly 50 million miles (80 million kilometers) of transmission lines by 2040 if it is to meet its carbon reduction targets and says it will require annual investment of more than $600 billion per year by 2030 – double the current investment levels. Many countries, the US included, are nowhere near where they need to be in expanding their transmission infrastructure.
The IEA report highlights several strategic actions including expanding and strengthening grid interconnections within and between countries, and across regions to be able to integrate rising levels of renewables and encourages grid developers and operators to embrace digitalization to enable future grids to be smarter, more resilient and flexible.
In releasing the report, IEA’s Executive Director Fatih Birol warned,
“This report shows what’s at stake and needs to be done. We must invest in grids today or face gridlock tomorrow.”
The IEA’s findings were echoed in a report from the National Academies of Sciences, Engineering, and Medicine (Academies) which concluded that failing to expand the transmission grid may be the biggest threat to the US energy transition.
The report, Accelerating decarbonization in the US (visual on right) said to meet its decarbonization goals, the US must expand its high-voltage transmission grid in addition to modernizing local electricity distribution systems, deploying resources such as solar and storage close to customers and adopting significantly more aggressive energy efficiency measures. It urged the Federal Energy Regulatory Commission (FERC) to urgently expedite pending transmission planning and cost allocation reforms and to ensure that wholesale power markets across the US can accommodate a shift to 100% clean energy.
FERC has come under pressure for its slow and outdated processes which, frankly, were barely fit for the old days and totally inappropriate for today’s fast-paced renewable development pace. In late Oct 2023, the US Department of Energy (DOE) released a draft road map for transforming the grid interconnection processes, a major hurdle to the Biden administration’s goal of decarbonizing the power sector by 2035. The DOE’s draft plan calls for faster and more equal access to interconnection queues while focusing on 4 key areas:
- Increasing interconnection data access and transparency;
- Improving the approval process while speeding it up;
- Promoting economic efficiency; and
- Maintaining grid reliability.
Grid operators and the power industry generally concur with and welcome such reports by the IEA, the National Academies and the DOE for their unequivocal endorsement for rapid expansion of the high voltage transmission network. Since transmission investments, like those in distribution, are regulated, more investments mean more steel in the ground and more assets in the rate-base, on which they can earn a guaranteed, low-risk rate of return. Not bad assuming you can get through the regulatory hurdles, environmental restrictions and permitting requirements – all formidable obstacles.
But as this newsletter has argued in the past, perhaps there are other, better, faster, less expensive and arduous ways to integrate more renewables into the network without massive expansion in the transmission system.
Out-of-the box solutions may offer faster, cheaper, better options
As noted by Bruce Mountain, the head of the Energy Policy Center at the University of Victoria in Melbourne, the main motivation for expanding transmission interconnections generally falls under 3 categories:
- First, it allows the grid operator access to more diversified generation resources – renewable or otherwise – that they otherwise could not get;
- Second, it allows the grid operator to import cheaper generation – renewable or otherwise – from a distant resource to replace its own more expensive generation – and conversely to export if the reverse applies; and/or
- Third, it allows the grid operator to diversify the risk of supply constraints by access to a diversified portfolio of generation – renewable or otherwise.
Any one of these can justify transmission expansion. But the question is what the best is, cheapest and quickest way to proceed given the many well-known obstacles and inevitable delays. In some places, as in Australia, ample renewable resources are available across the country and the evidence to justify a lot of transmission investments to move renewable generation across the country, especially given the long distances, does not exist, according to Mountain.
Nearly everywhere where there are long transmission interconnection queues, the problem can be partially addressed by eliminating phantom projects or those who get in the queue primarily for its option value.
According to a recent report by Centrica, the queue for Transmission Entry Capacity (TEC) in the UK’s transmission grid is up to 4 times oversubscribed. The report finds that oversubscription has become significantly worse in recent years, with approximately 1/5th or 62 GW of the projects in the queue not even having secured planned permission or granted land rights.
Centrica is arguing that phantom projects should be removed from the queue if developers miss key milestones. UK’s energy regulator, OFGEM, is considering rule changes to address the issues with a decision expected soon.
Aside from these types of remedies, there are technical solutions, many under development. A paper published in Nov 2023 titled Accelerating Transmission Expansion by Using Advanced Conductors in Existing Right-of-Way by Emilia Chojkiewicz et. al. suggests that reconductoring existing transmission lines with advanced conductors can cost-effectively double transmission capacity within existing right-of-way (ROW), enabling 4 times as much transmission build-out and allowing most of the transmission needed to reach over 90% clean electricity by 2035 in the US.
Finally, some analysts say that the traditional logic of adding a unit of transmission for an extra unit of generation – which worked in the past – may no longer be necessary or feasible. According to these people, more loads should be supplied by localized renewable generation, much of it small-scale and distributed. Just as the days of large centralized thermal plants connected to major load centers by a dedicated transmission line are over, so are the traditional methodologies for adding transmission lines. n
https://haas.berkeley.edu/wp-content/uploads/WP343.pdf
The traditional approach, dear to transmission engineers, is to add more transmission capacity for any generation added to the network. Your editor suspects that this is the basic methodology used by the IEA to come up with the 50 million miles of additional transmission lines needed by 2040. But do we really need that much? Aren’t there better ways to accommodate more renewable generation with less transmission? Are we still thinking mostly large-scale and centralized generation?
As with so many other things in the energy transition, one needs to step-out-of-the-box, the historical means of solving problems because we are no longer dealing with incremental change, but major discontinuities, interruptions and dislocations.
As Albert Einstein famously observed, “We cannot solve our problems with the same thinking we used when we created them.” Adding 1,500 or 3,000 GW of renewables over a short period of time requires new thinking, new methodology and new solutions. Let’s hope that we won’t need 50 million miles of additional transmission lines by 2040 simply because we won’t be able to build it. n
https://www.iea.org/reports/electricity-grids-and-secure-energy-transitions
This article originally appeared in the December 2023 issue of EEnergy Informer, a monthly newsletter edited by Fereidoon Sioshansi who may be reached at [email protected]"