ISO-NE Renewable Energy Transmission

ISO New England Is Planning for the Clean Energy Future

April 5, 2024

ISO New England is taking decisive steps towards advancing transmission planning, a crucial initiative that will facilitate the integration of clean energy into the region’s grid. Collaborating closely with the New England states, ISO New England will embark on long-term planning and procurement for transmission projects. These projects will support the expansion of clean energy like offshore wind and ensure the continued reliability of the grid.

The ISO will submit the proposed changes to the Federal Energy Regulatory Commission (FERC) for approval in April or May of 2024.

ISO-NE’s planning process is a model for other regions 

Transmission planning is hard. It involves systematically assessing current and future electricity transmission needs by evaluating existing infrastructure, forecasting future electricity demand, identifying new generation and retirements, and assessing renewable energy potential. Since 2014, North America has built just 7 gigawatts of large-scale multi-state transmission, compared with 44GW in Europe and a staggering 260GW in China. As a result, the U.S. power grid is struggling to integrate hundreds of billions of dollars’ worth of new wind, solar and battery power. New England’s process hopes to change this.

The Sustainable FERC Project has been a vocal advocate for forward-looking, scenario-based transmission planning that employs broad benefit metrics and allocates costs to all beneficiaries, a fair and accurate way of paying for these projects. 

The proposed planning process, known as the “Extended-term/Longer-term Transmission Planning Phase 2,” incorporates four well-established best practices for transmission planning:

  • Forward-looking: The initial phase of the process involves conducting a study of the transmission requirements for the years 2030, 2040, and 2050. This study and future studies will be carried out by the ISO.
  • Scenario-based: By considering various future scenarios, such as increased demand resulting from the adoption of electric vehicles and buildings, state policy changes, and the potential impact of extreme weather conditions, the ISO can effectively plan transmission needs.
  • Broad benefit metrics: Projects will be evaluated based on their ability to provide benefits to the entire region, including avoided transmission costs, increased reliability, and production cost savings. Projects that demonstrate benefits that outweigh their costs will be selected to move forward in the planning process. If the costs of a project slightly exceed the benefits, a subset of states can agree to cover the difference. In the future, the ISO can add additional benefits to this analysis. 
  • Regionally allocated costs: By default, selected projects will be funded by the entire region, unless the New England States Committee on Electricity (NESCOE) proposes an alternative funding arrangement.

If approved by FERC, ISO New England’s process would work as follows. First, when directed by states, ISO New England will conduct a long-term transmission study. This study will identify transmission necessary to meet state energy policies, taking into account projected load growth, reliability, existing constraints, and extreme weather. The ISO will then issue a request for transmission project bids, which will be reviewed by the ISO, the states, and other stakeholders for cost-effectiveness. Only projects whose benefits that outweigh their costs will be selected unless states agree to pay for the incremental difference. Finally, the costs of these projects will be allocated regionally unless the states agree on a different approach. This method ensures a transparent, cost-effective, and collaborative pathway toward building transmission in the region.

By adopting these best practices, ISO New England aims to keep costs low for residents of New England while achieving a well-planned system powered by clean energy. While MISO, the Midcontinent Independent System Operator, has been conducting transmission planning in this manner for years, resulting in $37 billion in financial benefits and the addition of thousands of megawatts of renewable energy, other regions have been slow to adopt these best practices. With this proposed planning process, ISO New England and the New England states are leading the charge in the North East.  

PJM should follow New England’s lead

PJM, the grid operator for the mid-Atlantic and part of the Midwest, has not adequately addressed long-term transmission planning, particularly in comparison to New England’s approach. Instead of comprehensive planning that considers policies, economics, and reliability, PJM has siloed these drivers into different planning categories. This could result in clean energy states disproportionately bearing the costs for transmission that benefits the entire region.

We encouraged PJM to learn from MISO, and now we encourage PJM to learn from ISO New England. All regions will have to comply with a FERC transmission planning rule, but as MISO and New England showed, PJM doesn’t need to wait to start implementing commonsense best practices.