Climate Benefits of a U.S. National Electric Grid

Large-scale power transmission line construction has the potential to be an incredibly cost-effective approach to lower greenhouse gas emissions while simultaneously enhancing the country's energy grid's dependability.

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Yet, the American electricity system is a patchwork of hundreds of different utilities, each of which serves a different local area. Energy corporations lack incentives to recognize the bigger picture.

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"The way we currently plan and finance new transmission does not sufficiently value or advocate for the essential advantages of interregional transmission. According to Gregory Wetstone, CEO of the nonprofit American Council on Renewable Energy, transmission planning "does not fully take into consideration the benefits of a holistic system over the long run."

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When it comes to the planning of longer, larger-scale transmission lines, the regulatory framework that has developed around those local utilities and their electrical transmission operations completely breaks down.

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Wetstone told Trade Algo that a single county may obstruct the development of a new transmission line that would benefit the entire region. "Lines traversing many states have to get permissions from various municipal and state organizations," he added. "Consider attempting to construct the current system of interstate highways if any one county in the way could obstruct the entire undertaking. Simply said, it was not feasible.

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A National Transmission Planning Study is being carried out by the Department of Energy to investigate all of this. The Pacific Northwest National Laboratory and the National Renewable Energy Laboratory of the government are putting that work into action, but the findings won't be made public for a while, an NREL researcher told Trade Algo.

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The U.S.'s climate goals will be more difficult and expensive to meet unless it can upgrade its electric infrastructure and the regulations governing the building of new lines.

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Why A Macro-Grid Is A Practical Way To Fight Climate Change

The United States currently emits 32% of its carbon dioxide emissions through electricity generation. In order to reduce the effects of global warming, electrical generating must switch from the burning of fossil fuels like coal and oil to emissions-free sources of energy like wind and solar.

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Putting as much clean energy generation as feasible close to where the electricity is needed can help reduce emissions brought on by electricity.

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Nevertheless, constructing longer transmission lines to move wind and solar energy from areas with ample resources to areas with the highest demand might actually be a less expensive option to reduce emissions.

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According to James McCalley, an electrical engineering professor at Iowa State University, "multi-regional transmission schemes provide the biggest reduction in cost per unit of emissions reduction."

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There are three causes for this:

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Utilizing the most plentiful resources. Initially, according to McCalley, extensive, multi-regional transmission lines, often known as a "macro grid," would link the most potent renewable energy sources with the areas with the highest demand.

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Many mid-U.S. States have great wind resources, and the southwest of the United States has great solar resources, but there aren't enough people to use them, according to McCalley, who spoke to Trade Algo. "When you approach closer to the coasts, population density increases. Rich resources can be built and used through transmission in the busiest load centers.

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Balancing seasonal and time-zone variations in supply and demand. Second, transmission lines that cross time zones would enable the best power generating resources to be sent to the area that requires the electricity at the time that it is required. The greatest resources in one non-peaking region may be employed to satisfy demand in another peaking region because, over the course of a 24-hour period, regions in various time zones peak at different times, according to McCalley.

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Similar to how regions could share electricity generation to satisfy their annual capacity needs, large-scale transmission would enable this.

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"Today's regions must have installed capacity that is around 1.15 times their yearly peak load. However for various places, the annual peak load happens at various times of the year. Thus, sharing of capacity would be made possible via multi-regional transmission, McCalley said Trade Algo.

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For instance, energy demand peaks in the Pacific Northwest in the early spring and in the Midwest in the summer. If they were linked, they might be able to borrow from one another, "allowing each region to avoid building new capacity," McCalley added.

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Greater dependability. A more dependable electricity system for consumers would also result from improved energy sharing.

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Wetstone told Trade Algo that because of years of underfunding, "our current grid is ill-prepared to handle the energy transition or increasingly regular severe weather occurrences." As a result, Wetstone stated that a macro grid "would also allow for the transfer of energy to avert blackouts and price increases during extreme weather events" in addition to making clean energy inexpensively available.

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The "Interconnections Seam Study" by NREL from 2021 discovered benefit-to-cost ratios as high as 2.5, which means that each dollar spent on transmission linking the Western Interconnection, the Eastern Interconnection, and the Electric Reliability Council of Texas would yield up to $2.50 in return.

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Why the US lacks a large-scale, regional grid

According to Rob Gramlich, the founder of the transmission policy firm Grid Strategies, "Who pays for transmission I think is the largest difficulty." He declared, "It's a freaking mess."

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Presently, utilities, regulators, and landowners all have to participate in a lengthy planning, approval, and regulatory process before a transmission line can be built in the United States. Throughout this time, it is decided who will benefit and how much each beneficiary will have to pay.

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Finding ways to divide costs among the numerous parties who would profit from (and be impacted by) new transmission can be contentious, as can navigating permitting procedures at the county, state, and federal levels along new routes, according to Patrick Brown, a researcher who focuses on transmission issues at the NREL.

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Also, when a new transmission line has the potential to compete with their current company, local stakeholders frequently dig in their heels.

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"Most newly constructed transmission is created to meet local requirements and is not tied to any regional or interregional planning. It should come as no surprise that the owners of these local projects want to prevent the addition of less expensive renewable energy sources to the grid as a result of interregional transmission from reducing their transmission and generation earnings. So, the broader societal benefits of a bigger, more durable grid are frequently disregarded.

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Determining exactly who gains what amount from a transmission line that crosses the entire nation will be particularly difficult.

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According to McCalley, "the system is a benefit to the nation in and of itself." There is currently no consensus on how to finance a macrogrid line since "the beneficiaries pay principle is tougher to apply in that instance."

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"My position has been that there must be a coordinated, complementary split of monies between the federal government, in collaboration with state government, in concert with developers — that it's got to be a 95-5, or 30-30-40 proportion, I don't know," McCalley said.

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To plan a macro-grid construction project, for instance, McCalley suggested that the larger US utility companies (such as PG&E, American Electric Power Company, Duke Energy, or Dominion) collaborate with the manufacturers of this type of transmission technology as well as with federal power agencies (such as the Bonneville Power Administration, Western Area Power Administration, Southeastern Power Administration, and Southwestern Power Administration).

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"Bring them all together"

Despite the current chaos surrounding the design and construction of transmission lines in the U.S., Brown of NREL told Trade Algo that "there are also various methods to circumvent these impediments."

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Existing rights-of-way can be reused; new federal regulations may encourage proactive interregional planning and coordination and assist in identifying the expansion options that should receive the highest priority; and public involvement and community ownership may assist in gaining the support of local stakeholders.

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Konstantin Staschus, who has worked with transmission for his whole career, both in the U.S. and in Europe, believes that regulators should be compelled to cooperate.

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An extensive meeting is the first step in the planning process for the building of transmission lines at the Midcontinent Independent System Operator, one of the seven regional planning organizations in the United States. 377 persons attended a three-hour planning session for MISO's upcoming phase of transmission planning at the meeting's beginning.

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Staschus, who served as the Secretary-General of the European Network of Transmission System Operators for Electricity for the first eight years of the regulatory body's existence, from 2009 to early 2017, believes that, just as all of those stakeholders are brought together to resolve their differences, the same procedure should be followed for larger-scale planning.

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"Put them all in one space. Have them develop a global plan. Make them repeat it annually, Staschus advised Trade Algo.

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The U.S. will be on a better path, according to Staschus, if they do that and if they are experts: "scratch their heads for months, figure out all the data, argue about the assumptions and the cost allocation, and they come with a proposal to their own management and convince them, and then the management goes together to the various regulators and convinces them."

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But you won't begin this process if you don't treat it as a national system.

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Yet according to Johnson of MISO, those who have such idealistic ideas about creating a national system don't actually comprehend how difficult it is to have a transmission line built, even on a regional scale. The lines may cross entire states that do not draw energy from that system, for example.

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According to Johnson, "those things are going to be considerably more sophisticated than what people are aware." According to Johnson, the difficult part of building a transmission line is figuring out who will benefit and how much they will have to pay.

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Stronger links between planning regions, in Johnson's opinion, are more likely. Johnson compared the system to a "bucket brigade" where one region can more easily share power with its neighbor.

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According to macro-scale energy systems engineer and Princeton professor Jesse Jenkins, interregional grids are crucial even though national-level grids are appealing.

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Jenkins stated, "I don't think we really need a continent-scale macro grid, however there are many studies showing the benefits of a such a transmission "interstate roads" system, so it would be wonderful to have." "A significant expansion of important interregional long-distance transmission networks is what we absolutely need. So, not all of it is local (e.g. within single states). We also require a significant number of new, expanded, or reconducted multi-state corridors.

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McCalley concurs that interregional lines are preferable to nothing if the US is unable to have national lines built. Nonetheless, it will still be more expensive to reduce emissions than if a national grid were established.

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"If we continue to operate as we have in the past, it will be extremely difficult because every state has a voice and, in essence, a veto power. That won't therefore work, McCalley said.