Transmission's at the epicenter

Key renewables questions not yet answered

Published In: Intelligent Utility Magazine May/June 2011

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SHOULD RENEWABLE ENERGY BE DEVELOPED LOCALLY, regardless of cost or efficiency, or should it come from where it is created most efficiently, with expensive transmission lines built to move the energy? Will the policies that expedite transmission development and determine who pays for it be clarified?

I recently discussed these questions with Dave Raskin, a Washington, D.C.- based partner and head of the Electric Power Practice at Steptoe & Johnson, who is immersed in Federal Energy Regulatory Commission (FERC) policy. His key clients include the Tres Amigas project in New Mexico, which is seeking to link the three transmission interconnections in the United States, and Northeast Utilities, which is in a partnership to build a line in New Hampshire to connect Quebec to New England.

Is electricity local, regional or national?

"There are two things that have been around a while and haven't been resolved," Raskin said. "The first: Is electricity a local business or is it a regional or national business? Seems to me we haven't made up our minds yet which one it is."

He cited the still-evolving rules around open access to transmission that has been a policy question since the regional transmission operator model was created in the late 1990s. Raskin said people in the industry seem to change their minds on this question fairly regularly.

"The second issue is to what extent are we going to rely on renewables? We have 30-plus states with renewable portfolio standards, so do they really believe in them, and even when they believe in them, are they going to support transmission to move renewable (energy) from one part of the country to another, or do they really hope to create jobs locally, just to get renewable built within their own states, even if they're not efficient?" he wondered.

Transmission vs. RPS mandates

These questions have not been addressed sufficiently, but the answers will have to be determined fairly soon. Although many states' mandates have been attained while the requirements have been fairly small, other states have requirements for 10 percent or more of electricity sales to come from renewable sources within a few years. And that doesn't even consider what happens if a national mandate is ever enacted. "At some point the country is going to have to move in one direction or another on this. If we're going to have a 20 percent or 15 percent RPS nationally, we're going to have to build a lot of transmission, there's just no way around it," Raskin added. "At some point we're going to have a national conversation before we hit a wall. Nuclear is off the table and coal is not going to get built."

So if a transmission build-out is the answer, how does that occur?

There are no any easy answers there, either, Raskin noted.

Overwhelming issues

As discussed recently, FERC has embarked on a rulemaking proceeding with the emphasis on regional planning.

"That's controversial because, for the first time, FERC is talking about regional and interregional planning in parts of the country that have not done that previously," Raskin said. "I think it's going to be difficult to get the rules in place and actually put (them) into effect.

"The second aspect is cost allocation. That's a very difficult issue because there's no right answer."

How broadly costs are spread has been tackled regionally, but the concept has been under attack in the U.S. Senate.

The third issue is siting, with federal "back-stop authority" under the Energy Policy Act of 2005 coming under attack in the courts. More explicit legislation from Congress may be necessary, an idea that has not gained much currency.

"Hopefully, at some point, Congress will realize that by not expanding the authority that FERC already has, they're creating a situation that is inefficient," Raskin said.

Not yet, so far. But it seems that Raskin's questions about sourcing renewables have to be answered first.

 

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Comments

transmission

I do understand the problem the FERC is facing and their somewhat reluctance to make a decision on which direction to take; there are other factors involved that are applying pressure for example in the west there are numerous renewable hubs that have been identified by the Western Governors Association WREZ study but they need transmission for them to be a value. The addition of grid size storage would alleviate some of transmission's concerns about congestion and integration of renewable energy but the generation side of the large utilities are reluctant to endorse storage because it replaces some of their asset base consisting of natural gas and has the potential to upset the market as we know it; storage will make possible a sub-hourly market and defer some transmission buildup. The business as usual thinking has to change and if the FERC makes a decision on the benefit values of storage and creates a market for trading those benefits the grid should benefit by becoming more flexible as well as more efficient but its going to cost the large utilities in the short term. The acceptance of storage by the traditional players is the first important step toward a working grid; all it takes is a little less greed and some decisions by the regulatory agencies. The power industry is the only supply industry that doesn't have an inventory or stock pile of product available to call on when needed; any successful supply business needs stock and storage attributes to work efficiently, just common sense.

Renewables- Local Regional or National?

The article raises a very legitimate concern, and unfortunately the issues are very complex even though the answer to the single question is not. Power System planning needs to be regional because one size does not fit all and local power systems have very different power densities, seasonal and daily peaking characteristics, load types and penetrations, customer types and responses, weather patterns, humidities, and existing power system assets (generation, transmission, storage, distribution) and system characteristics (inertia, stability, power factor, efficiencies, flexibilities, redundancies and abilities to survive contingencies). This is made even more uncertain by the technology lag in development of cost effective storage and the potential impacts of PEVs on local electrical infrastructures due to the still early stage of battery technology maturity and wide variations in options for charging voltages, times and local "smart" coordination, as well as business cases and ownership of charging facilities, which are inadequately covered by electrical codes and local permit processes. A one size fits all national approach only aggravates the above local differences, and strictly local approaches undercut the value of intermittent renewables that even if available 90% of the time would require alternative power sources for peak times, when renewables aren't available. These alternate sources could never be cost effective if only operating 10% of the time. Before we trust our futures to any one technology and its proponents that minimize its limitations and drawbacks, we need to think about what the consequences would be if lack of adequate electric supplies restrained the future growth of our economy and the manufacturing and business innovations and technologies that enable us to compete with much lower cost labor around the world. I personally believe that we need an all of the above approach that includes advanced nuclear reactors that are already much safer than current designs, clean coal technologies and transmission to not only support an effective market for lower cost electricity, but to provide resiliency for contingencies and fuel disruptions from unplanned maintenance, storms and physical damage.