FERC Renewable Energy Transmission

We Can’t Let Aging Transmission Stall Clean Energy Progress

December 12, 2023

For more than a century, our power grids have served as the backbone of a system that has underpinned economic activity by delivering energy to homes, businesses, and industry. But the network was designed in a bygone era to deliver energy from large, fossil fuel generators to nearby cities and towns, and we’ve failed to upgrade and modernize the system. As a result, the power lines and components that once bought prosperity to far-flung rural communities and illuminated modern cities are simply not up to the job of managing the surge of new renewable energy or batteries consumers are demanding.

Our grid planning and management must evolve and strengthen as the clean energy transition presents new technologies, opportunities, and challenges. 

Across the country over the next decade, increasing consumer demand – think of millions of new EVs on the road looking for power, and greater demand for renewables as a result of utility decarbonization targets and federal and state climate policies – will change the way electricity is used. This does not have to be a hurdle. With smart planning and policies, increased electrification can serve as a resource that lets consumers help manage the grid.

Against that backdrop, regulators, grid operators, and policy makers took important steps this year to pave the way for badly needed system upgrades and to address a scarcity of transmission capacity that is holding back the clean energy transition. There are tough challenges ahead and much work to be done. But for the second year running, the U.S. saw meaningful progress in how transmission is planned, built, and configured to accommodate clean energy sources that are vital to meeting climate targets, enhancing reliability, and delivering value for consumers.

Getting New Resources on the Grid

 We need to add new generation and storage capacity to the grid to ensure resource adequacy – particularly as the grid faces life threatening extreme weather events that are becoming more frequent as a result of climate change. The good news is that there’s an abundance of clean energy waiting to get online. In fact, there are about 2,000 gigawatts (GW) of new resources—primarily renewables and storage—waiting to connect to power grids across the countryThat’s more than the combined output of all power plants operating in the United States today. The bad news is that as a result of an out-of-date interconnection process, it now takes more than five years on average for new generators to move from application to commercial operation. Most projects never get built, in part because of the delays.

This year, we made progress on fixing this problem. The Federal Energy Regulatory Commission (FERC) undertook the first overhaul of national interconnection standards in two decades, updating an outdated system that is slowing the adoption of clean energy to a crawl. An important feature of the initiative is to require accountability among grid operators for bringing new generation online. These new rules, once implemented, will speed the addition of new resources by standardizing the interconnection process across all grid regions. It’s a change that will pay off in new clean energy technology and improved grid efficiency and reliability.

FERC also continues to consider its April 2022 proposal to update its transmission planning rules. To state the obvious, FERC needs to issue a strong transmission planning rule as soon as possible that encompasses long-term needs and multiple scenarios, incorporates all the benefits of transmission, and provides clear and certain cost allocation standards. FERC should also move forward on a long-discussed update to rules that require transmission providers to plan for interregional transmission needs and offshore wind.

Adding Transmission Capacity for Reliable, Affordable, Resilient Energy

But even if the interconnection queue eases and transmission planning improves, a decade-long slowdown in new power lines presents another barrier to new clean energy. Since 2014, North America has built just 7 GW of large-scale interregional transmission – high-capacity lines that carry energy over long distances that are essential to renewable developers – compared with 44 GW in Europe and 260 GW in China.

The National Renewable Energy Laboratory last year projected that for the U.S. to achieve 100% clean electricity by 2035, interregional transmission must double or triple in capacity. Researchers at Princeton University say the rate of transmission construction must double that of the last decade or 80 percent of the potential emissions reductions possible under the 2022 Inflation Reduction Act by 2030 will be lost. It’s hoped that new DOE funding for transmission upgrades and a speedier review process for new lines will lead to bigger, stronger, smarter power grids, and that these lines will be built more quickly.

Consider this troubling data point. Renewable power installations declined in 2022 – the first year-on-year drop since 2017 – in part because of delays in connecting projects to the grid and a lack of transmission lines, according to a report from American Clean Power. Dangerous and more frequent episodes of extreme weather like winter storms Elliott in December and Uri in 2021, Hurricane Ida in 2021, and Western U.S. heat waves in 2020 and 2022 have exposed how the inability to move electricity into affected areas compromises reliability, in some cases leading to dangerous blackouts. 

In addressing transmission, FERC was not alone. In 2023, the U.S. Department of Energy (DOE) took strides to help finance new lines.  The DOE announced it will invest up to $3.5 billion for grid upgrades in 58 projects across 44 states designed to strengthen electric grid resilience and reliability. It also announced that it was making up to $3.9 billion available for 2024 and 2025. In addition, the DOE moved forward with a program that provides federal support to help build interregional transmission. In October, DOE committed up to $1.3 billion for three transmission projects across six states that will add 3.5 GW of grid capacity.   

Finally, DOE is reforming its transmission permitting process. The department has proposed a rule to establish the Coordinated Interagency Transmission Authorizations and Permits (CITAP) Program, an entity designed to better coordinate Federal authorizations and environmental reviews of transmission lines. Once finalized, this rule should streamline federal permitting for transmission projects that are urgently needed to address the climate crisis, improve reliability, and reduce congestion. 

Meanwhile, both FERC and DOE have moved forward this year in implementing federal backstop siting authority, which gives FERC authority to approve certain power lines in DOE–designated National Interest Electric Transmission Corridors when states reject or fail to act on transmission projects. In late 2022, FERC issued rules on how to site the transmission lines, while DOE took meaningful steps to ensure backstop siting authority can be a powerful tool to get needed transmission built. That may sound like a lot, but not when you consider the scale of the challenge.

Legislative momentum

There is also growing momentum in Congress on transmission. In 2023, there was a huge proliferation of legislative proposals that would, among other things, improve the process of planning for, building, and/or paying for transmission, as well as others that would improve the process for siting these projects or encourage the use of technology that would make our current grid more efficient. 

Unfortunately, Congress fumbled an opportunity to promote transmission when it failed to include legislation in the debt ceiling bill that would have required transmission planning regions to be able to transfer at least 30% of their peak demand to each other, effectively requiring them to build the new interregional transmission lines we need. Instead, Congress ordered up an unnecessary study of transfer capability between regions. NERC has 18 months to deliver the study to FERC, which will ultimately issue recommendations to Congress.

Nevertheless, it is encouraging that Members of Congress increasingly recognize the need for transmission buildout for a clean, affordable, and reliable energy system and are thinking creatively about legislative solutions. This increased recognition should underscore the urgency of the issue and be a call to action for passing legislation in 2024.

Looking forward

NRDC has laid out a clear path to building badly needed transmission and to upgrading existing lines quickly without compromising bedrock environmental or social justice safeguards through existing authorities and rules. Utilities, consumers, and energy markets are eager to add wind, solar, and battery storage to their energy portfolios. Delaying this inevitable clean energy transition will only prolong the use of fossil fuels and burden society with even more harmful emissions and climate impacts. 

The groundwork is being laid for serious momentum on buildout of badly needed transmission across the country. Increasing levels of regulatory and legislative activity is an encouraging sign, and we plan to continue our work advocating for policies that make it easier to plan and build the grid we need for a clean energy future. We have an opportunity to make 2024 a banner year for transmission expansion and grid decarbonization. We must not let this opportunity go to waste. 

Image from Flickr Creative Commons