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Utilities can't upgrade the grid without Uncle Sam
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A great deal of utilities and their customers want more renewables on the grid. However, as it stands now, transitioning to renewables demands utilities take on a considerable degree of risk. Technological upgrades that render the grid more accommodating to renewables, like advanced power control, dynamic line ratings and topology, have the potential to double renewables on the Southwest Power Pool, according to a study by the Brattle Group. However those same technologies carry some big opportunity costs. They’re expensive themselves, require additional operational costs and personnel training, and put utilities in danger of racking up penalties if things go wrong.
These risks make such upgrades unfeasible for utilities that have a bottom line to worry about. That’s right, sometimes the market doesn’t work how you want it to. In such cases, the government needs to interfere for the good of society. FERC should provide incentives to mitigate the risk surrounding grid-upgrades to facilitate the adoption of renewable energy.
There are encouraging signs already. FERC has scheduled a workshop in September that will address some of the mentioned risks. What’s more, the agency is in the midst of a earnest effort to improve the accuracy and transparency of line ratings. Still, there’s much more to be done.
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