PJM Planning Transmission

PJM Steps into the Future of Transmission Planning

August 10, 2021

Cutting emissions from our power grid is going to require a lot more transmission lines. And, I mean, a lot. Long distance power lines move clean energy from where it’s plentiful to where it’s needed, and balancing power across the country is a huge part of keeping a high-renewable system reliable. My colleagues and I have been warning that our current transmission planning system isn’t up to the task. Often current planning is reactive rather than forward-looking. At worst, it’s self-serving at the public’s expense.

With all this, it’s great to see PJM Interconnection—the nation’s largest grid operator—breaking the mold and starting work on transmission planning that plans for a cleaner, brighter future. This is the kind of study all of the nation’s grid operators should be doing.

At the request of the Organization of PJM States, PJM has released the first phase of a study estimating the transmission costs to support all the states in the region meeting their clean energy goals. This includes 100% clean electricity targets for Virginia and Washington, D.C., 50% for New Jersey and Maryland, and targets in other states. PJM estimates that reaching these goals will require 73.4 GW of new clean power plus 7.2 GW of energy storage. That’s more than six times the grid operator’s current clean supply.

PJM finds that upgrading the transmission system to handle this huge renewable buildout will require between $2.2 billion and $3.4 billion in new investment. Those numbers may seem large, and they are, but they’re surprisingly low given the scale of the buildout. The estimated costs for transmission work out to only a few percent of the cost of the necessary new solar and wind supply.

This study is an important first step, offering a glimpse of the advantages advocates have long claimed will come from better coordinated planning. Current planning is piecemeal, with upgrades planned one-by-one and paid for by each new project. PJM’s new big-picture look should allow for much more efficient and cost-effective planning, consolidating many small projects into fewer large ones. It also helps policy makers see the outlines of decisions they’ll need to make: Should they put an emphasis on offshore wind or rooftop solar? Is small and distributed better than large utility-scale projects? This type of planning, done in consultation with the states driving clean energy in the region, offers a much clearer vision how to cost-effectively meeting state goals.

The study also hints that these transmission investments might partially or entirely pay for themselves. Without providing detail, the study says that PJM’s analysis also demonstrates decreased energy costs. When transmission lines are running at capacity, grid operators have to run more expensive power plants simply because they have no way of delivering cheaper power. This so-called congestion costs PJM’s customers more than $500 million every year. Since transmission lines usually last 50 years or longer, it’s entirely possible that building this infrastructure will pay for itself several times over.

So what’s next? We’d very much like to see PJM do more market analysis to see just how much money could be saved through large-scale transmission investment. Looking further into the future, we need to break the silos between planning generation and transmission. Right now, there’s no real way to compare the costs and benefits of, say, building solar projects in Florida and shipping power north vs. building more solar in locations that are less sunny but closer to where the power will be used. We expect FERC to pay close attention to this problem as it works on its major transmission reform effort. Work like this recent PJM study shows us that large scale planning and coordination between states and grid operators has much to offer.