American Wind Energy Association Issues Public Comment on DOE Notice
- Nov 27, 2020 10:59 pm GMTNov 28, 2020 3:47 am GMT
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WASHINGTON, Nov. 25 -- Gabe Tabak, counsel, and Gene Grace, general counsel, at the American Wind Energy Association have issued a public comment on the Department of Energy notice entitled "2020 National Electric Transmission Congestion Study". The comment was written on Nov. 23, 2020, and posted on Nov. 24, 2020:
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Comments of the American Wind Energy Association/1 On the 2020 National Electric Transmission Congestion Study
On September 24, 2020, the U.S. Department of Energy ("DOE") released the 2020 National Electric Transmission Congestion Study ("Congestion Study")./2
Under Section 1221 of the Energy Policy Act of 2005 (codified as Section 216 of the Federal Power Act, at 16 USC Sec. 824p, and referred to here as "Section 216"), DOE's development of the Congestion Study is intended to inform any exercise of its authority to designate National Interest Energy Transmission Corridors ("NIETCs").
Section 216 is a key Federal tool for ensuring that electric transmission can keep pace with growing demand for clean, reliable, and affordable energy from load-serving utilities, end-use customers, and states. As the trade association representing the U.S. wind industry, AWEA recognizes the important role of Section 216 in supporting transmission development, and appreciates the opportunity to provide input on the Congestion Study.
These comments build upon AWEA's earlier submittal/3 responding to DOE's 2018 request for comments on the procedures for conducting congestion studies./4
Consistent with the AWEA 2018 Comments, AWEA notes several aspects of the Congestion Study that can be improved upon in any subsequent report designating NIETCs under Section 216(a)(2), most significantly the use of prospective rather than retroactive evaluation of congestion.
Additionally, AWEA identifies several considerations that should inform DOE's evaluation of any project-specific application for a NIETC. AWEA believes that DOE should expressly indicate its willingness to evaluate project-specific applications by using the forward-looking approach described in these comments to identify and address congestion.
A well-designed framework for assessing congestion on the electric transmission system must be capable of addressing the future adequacy of the nation's electric infrastructure to meet a diverse set of rapidly evolving needs. These needs include electric reliability and resilience, energy resource diversity, broader deployment new technologies in the electric sector, more efficient wholesale power markets, and determining how best to site essential electric transmission infrastructure ought to be addressed (as a policy and regulatory matter) to facilitate these goals.
As in the AWEA 2018 Comments, AWEA again encourages DOE, as well as other interested Executive Branch departments and agencies, to ensure that the nation's electric transmission infrastructure is adequate to sustain the national energy policy goals that the Congress recognized in the Energy Policy Act of 2005.
These comments 1) provide input on the process for identifying congestion proposed in the Congestion Study, 2) identify several aspects from the AWEA 2018 Comments that would improve this framework, and 3) recommend evaluation considerations for project-specific NIETC applications. AWEA notes several issues that DOE should revisit, and that may affect its determination that it "has not identified transmission congestion conditions that would merit proposing the designation of National Corridors."/5
I. DOE's Evaluation of Congestion Should be Improved, Both for Near-Term Consideration of Any National Interest Electric Transmission Corridors and in Subsequent Studies.
Although the Congestion Study utilized several metrics in considering transmission congestion, many of the chosen metrics are outdated, backward-looking, and insufficiently granular to provide meaningful information on actual and likely future congestion. In evaluating transmission congestion, the Congestion Study first examines transmission infrastructure investment on a national basis and by reliability region from 1996 to 2018./6
The study then reviews the percent of time that major transmission paths were congested, and attempts to link diminishing numbers of Transmission Loading Relief (TLR) actions to transmission investment./7
Finally, the Congestion Study shows economic transmission congestion costs from 2005 to 2017, and notes other factors (such as the increased use of natural gas) in identifying declining congestion.
These measures are flawed in several ways, and do not correspond to the ways that grid operators evaluate and plan transmission to prevent or mitigate congestion.
Most notably, DOE's analysis does not consider prospective aspects of congestion. Given the long planning and permitting processes for transmission, such an analysis must include forward-looking measures to ensure that transmission can meet both present and future needs. DOE should consider the following aspects in reevaluating its approach to congestion:
- Prospective evaluation of congestion is essential. First and foremost, congestion analysis must be forward-looking, and should incorporate interconnection queues to show where future generation resources, and therefore future congestion, will be. An examination of recent and current generation interconnection queues is warranted. As of the end of 2019, there were 734 GW of proposed generators waiting in interconnection queues nationwide, with almost 90% being renewable and storage resources. In calendar year 2019, 168 GW of solar and 64 GW of wind projects entered interconnection queues; these resources tend to be developed where the wind or solar resource quality is high. The U.S. EIA forecasts that wind and solar will make up over 75% of new capacity additions in 2020,/8 and these resources will likely make up the lion's share of new additions for the foreseeable future./9
Figure omitted: Capacity in Queues at Year-End by Resource Type
The recent growth in generation interconnection queues, particularly for solar and wind resources, is indicative of future congestion. While it may not be the type of congestion that has been considered in past DOE National Congestion Studies, there is an ever-growing bottleneck, with interconnection study processes unable to keep pace with demand for interconnection of new resources. Queue backlogs are increasing because interconnecting generators face high upgrade costs to resolve congestion and connect to the grid. This causes many generators to drop out of the queue, which in turn causes delays and uncertainty as other interconnection applications must be restudied. In addition, interconnecting generators can respond to likely congestion by submitting multiple interconnection applications for the same project, with different configurations and points of interconnection, further increasing queue backlogs.
AWEA provides detailed analysis from ICF International as Attachment A. The ICF Analysis was prepared in the winter/spring of 2020 to assess congestion issues in the central region of the United States based upon expected generation additions. The report evaluates likely transmission congestion in the Mid-Continent Independent System Operator, Southwest Power Pool, and Electric Reliability Council of Texas regions, identifies likely areas of future congestion in 2024, and identifies indicative transmission upgrades which could alleviate that congestion. The report also takes into account planned transmission expansion, and notes regarding MISO that:
"The projection for 2024 is generally for congestion patterns to remain similar to historical trends, but the magnitude of congestion is projected to become significantly worse. This is especially true for western MISO."/10
The ICF Analysis also identifies likely significant worsening of congestion, as reflected in LMP, from 2020 to 2024:/11
Figure omitted: MISO 2019 vs 2024 Forecasted Off-Peak LMP
Additionally, the indicative transmission upgrades in the study would be highly cost-effective; the top identified upgrades in MISO to address this future congestion would all have benefit-to-cost ratios exceeding 10:1./12
Finally, AWEA notes that the ICF Analysis of expected congestion is also consistent with other recent approaches. For instance, mapping and analysis of MISO's interconnection queue shows both that hundreds of projects adding up to over 35,000 MW of energy were withdrawn in the past half-decade, and that "huge areas... [of] the transmission system [are] already asked to handle more power than what the grid operator advises."/13
While AWEA does not advocate in these comments for designation of a NIETC for a particular transmission projects, these types of congestion analysis could accompany any application for a NIETC, as discussed further below.
- Transmission investment is not a useful metric. The Congestion Study uses transmission investment - a blunt instrument - as one of its main congestion evaluation measures. The amount spent on transmission may not link directly to congestion (or investments made to reduce or avoid it); in some cases, significant transmission investment is on local projects, or projects to address reliability or aging infrastructure that are not designed to reduce congestion as future needs shift./14
Put "Spending more" does not equate to "spending where it is most needed."/15
Additionally, figures from the Edison Electric Institute indicate that transmission investment was projected to decline from 2018-2021, meaning that a key metric is trending in the wrong direction under DOE's own framework./16
DOE's evaluation of congestion and constraints, and any potential NIETCs, should also include future costs and benefits to consumers, as well as historical costs. Infrastructure investments are capital- intensive and require long lead times, but significantly benefits customers in many cases.
- Historic TLR actions can inform congestion analysis, but must account for shifting market footprints and rules. Similarly, evaluating historic congestion data on path capacity and TLR actions is not consistent with how grid operators and transmission planners evaluate congestion. The evolving footprints of regions, as well as enhanced market designs, make trend analysis over time extremely difficult and of questionable value. For example, TLRs in the Southwest Power Pool are misleading because of significant changes to that region over the evaluated period. For instance, the Energy Imbalance Service (a real-time energy market) started in 2007, followed by the Integrated Marketplace (with expanded markets) in 2014./17
In addition, SPP's footprint increased in 2009 with the addition of the Nebraska load-serving entities, and expanded again to the Canadian border with the addition of the Western Area Power Administration/Basin Electric Power Cooperative Integrated System in 2015./18
As a result, time series TLR data for SPP does not provide meaningful data to draw conclusions, as the market design and footprint significantly changed within the window evaluated by the Congestion Study.
Additionally, as noted below, Section 216 does not limit DOE's evaluation of congestion and constraints solely to historic measures; historic TLR data, while relevant, should not be overstated, and should be just one data category that informs DOE's NIETC evaluation process.
- Congestion costs do not appear to be falling. The Congestion Study does not account for recent trends in congestion costs. DOE's data ends in 2017, yet congestion costs were on average higher for the period 2018-2019.
Specifically, the six RTOs reported congestion costs of $5.080 billion in 2018 and $3.535 billion in 2019, for an average of $4.308 billion./19
This is higher than RTO congestion costs in 2016 ($3.769 billion) and 2017 ($4.197 billion). Although costs fell from 2018 to 2019, the increasing trend from 2016-2018 does not support a conclusion that congestion costs are falling.
- DOE Should Consider a Range of Congestion Metrics and Costs. Many types of congestion are typically not accounted for under the congestion cost metrics included in DOE's report. For example, the Congestion Study only focuses on congestion costs within RTOs, and does not quantify congestion between RTOs, between RTOs and non-RTO areas, or in non-RTO areas.
Even within RTOs, some of the biggest constraints to efficient and effective power system operations are not existing flowgates, but rather the lack of transfer capacity between two points or adjacent systems that have little to no transfer capacity. The metrics used in the Congestion Study understate actual congestion within RTOs by focusing on existing flowgates and not capturing congestion between points that currently lack transfer capacity.
Additionally, transmission congestion results in many types of societal costs that are not accounted for in the metrics used by DOE. However, MISO,/20 SPP,/21 and others/22 have accounted for costs, including:
* Line losses are higher on congested and lower-voltage transmission lines relative to less congested, higher-voltage alternatives.
* Congested transmission limits the ability to share planning and operating reserves over larger areas, which increases capacity costs and production costs.
* Transmission congestion can drive renewable deployment into regions with lower quality resources, requiring greater expense to produce the same amount of generation.
DOE should be prepared to evaluate congestion across a range of measures, and should take a similarly holistic approach to the associated costs and benefits of congestion relief.
- The generation mix is rapidly shifting towards renewables, which will shape congestion patterns. Evaluating congestion reductions, which DOE notes has been in large part due to past coal-to-natural gas switching, provides little indication of what congestion patterns will look like as Variable Energy Resources ("VERs") proliferate. DOE's Congestion Study should incorporate prospective modeling identifying where congestion is likely to occur in the future. In addition to DOE conducting its own modeling, this can include compiling work done by regional planning entities, national laboratories, and other experts. For example, stakeholder-driver regional transmission planning processes typically conduct production cost modeling that identifies congestion under a range of future resource scenarios.
DOE has the opportunity to improve upon the Congestion Study, and has the resources and authority to evaluate any potential NIETC under this improved framework. Given the long lead time to get high-voltage transmission approved and constructed, DOE National Congestion Studies should look prospectively and include comprehensive systematic assessments, which could be facilitated by DOE with key support by stakeholders of the bulk power system. It would seem appropriate for DOE to leverage recent renewable integration studies, and/or other power systems modeling efforts such as the North American Energy Resilience Model (NAERM,) to perform independent analyses to facilitate interregional planning, including between the existing Interconnections.
Additionally DOE's Congestion Study should also include a range of maps produced by grid operators and others. For example, most RTO Independent Market Monitor reports include heat maps of annual average Locational Marginal Prices, which reveal the location of congestion, and quantify how it harms consumers. DOE should also include maps produced by RTOs showing available transmission transfer capability./23
Finally, AWEA notes that the Congestion Study proposes to change the scope of future studies to an "ongoing evaluation of issues affecting the capacity of the Nation's transmission system to serve critical national interests," including "details regarding potential threats; data and predictions on resulting impacts; tools required to model multiple infrastructures; and details concerning the coordination of numerous utilities and stakeholders involved in regional and national-scale energy system operations."/24
Although transmission adequacy and security are worthy issues for DOE to address, AWEA submits that the statutory scheme of Section 216 requires that DOE specifically evaluate electric transmission congestion and constraints to inform its determination of whether NIETCs might be necessary; accordingly, AWEA urges that national security threat and resilience analyses should be conducted separately from future Congestion Studies.
View full comment with figures at: https://downloads.regulations.gov/DOE-HQ-2020-0060-0002/attachment_1.pdf
Gabe Tabak, Counsel, firstname.lastname@example.org
Gene Grace, General Counsel, email@example.com
American Wind Energy Association
1501 M St. NW, 9th Fl.
Washington, DC 20007
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1/ AWEA is the national trade association representing a broad range of entities with a common interest in encouraging the deployment and expansion of wind energy resources in the United States. AWEA members include wind turbine manufacturers, component suppliers, project developers, project owners, financiers, researchers, renewable energy supporters, utilities, marketers, customers and their advocates.
2/ Request for Public Comment on the 2020 National Electric Transmission Congestion Study, 85 FR 60151 (Sept. 24, 2020) https://www.federalregister.gov/documents/2020/09/24/2020-21040/request-for-publiccomment-on-the-2020-national-electric-transmission-congestion-study. The Congestion Study itself is available at http://energy.gov/oe/congestion-study.
3/ See Comments of the American Wind Energy Association on Procedures for Conducting Electric Transmission Congestion Studies (Nov. 1, 2018), https://www.energy.gov/sites/prod/files/2018/11/f57/AWEA%20Comments%20on%20DOE%20Congestion%20Study.pdf ("AWEA 2018 Comments").
4/ Procedures for Conducting Electric Transmission Congestion Studies, 83 FR 42647 (Aug. 23, 2018), https://www.gpo.gov/fdsys/pkg/FR-2018-08-23/pdf/2018-18229.pdf.
5/ Congestion Study at vi.
6/ Congestion Study at 9-10.
7/ Congestion Study at 11-14.
8/ U.S. Energy Information Administration, New Electric Generating Capacity in 2020 Will Come Primarily From Wind and Solar, (Jan. 14, 2020), https://www.eia.gov/todayinenergy/detail.php?id=42495.
9/ See, e.g., U.S. Department of Energy, Wind Vision: A New Era for Wind Power in the United States, Figure 3-24 at 171 (March 12, 2015), https://www.energy.gov/sites/prod/files/WindVision_Report_final.pdf.
10/ Attachment A at 41.
11/ Attachment A at 12.
12/ Attachment A at 45.
13/ See John Moore, The clean energy benefits slipping through states' fingers (Nov. 11, 2020), https://www.utilitydive.com/news/the-clean-energy-benefits-slipping-through-states-fingers/588790/.
14/ See Johannes P. Pfeifenberger, Improving Transmission Planning: Benefits, Risks, and Cost Allocation at 3 (Nov. 6, 2019) ("U.S. transmission investment is at about $20 billion/year in the past five years after steadily rising since 2000. Mostly to address reliability and local needs."), https://brattlefiles.blob.core.windows.net/files/17555_improving_transmission_planning__benefits_risks_and_cost_allocation.pdf. Many such smaller projects are developed outside regional transmission planning processes. See also Johannes P. Pfeifenberger et al., Cost Savings Offered by Competition in Electric Transmission: Experience to Date and the Potential for Additional Customer Value, at 6-7, April 2019. (Between 2013 and 2017, "about one-half of the approximately $70 billion of aggregate transmission investments by FERC-jurisdictional transmission owners in ISO/RTO regions [was] approved outside the regional planning processes or with limited ISO/RTO stakeholder engagement.") While not an exact proxy, this data indicates that a significant amount of transmission spending was on local projects.
15/ See, e.g. https://www.transmissionhub.com/articles/2013/05/nyiso-new-york-will-need-25bn-ofinvestment-in-transmission-will-see-resource-shortfall-by-2021.html (significant new investment needed in NYISO); https://www.transmissionhub.com/articles/2019/03/report-30bn-to-90bn-of-incrementaltransmission-investments-will-be-needed-by-2030-due-to-electrification.html (tens of billions of incremental spending in transmission investments needed by 2050 due to electrification of load).
19/ See Transmission Congestion Costs in the U.S. RTOs, Jesse Schneider, Grid Strategies LLC (Aug. 14, 2019; updated Nov. 12, 2020), https://gridstrategiesllc.com/2019/09/17/transmission-congestion-costs-inthe-u-s-rtos/.
20/ MISO, "MTEP17 MVP Triennial Review," (September 2017), https://cdn.misoenergy.org/MTEP17%20MVP%20Triennial%20Review%20Report117065.pdf
21/ SPP, "The Value of Transmission," (January 2016), https://www.spp.org/documents/35297/the%20value%20of%20transmission%20report.pdf
22/ See, for example, The Brattle Group, "The Benefits of Electric Transmission," (July 2013), https://cleanenergygrid.org/uploads/WIRES%20Brattle%20Rpt%20Benefits%20Transmission%20July%20 2013.pdf
23/ For example, see https://cdn.misoenergy.org/GI-Contour_Map108143.pdf.
24/ Congestion Study at 36.
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The notice can be viewed at: https://beta.regulations.gov/document/DOE-HQ-2020-0060-0001
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