MODERNIZE FERC REGULATIONS TO ACHIEVE FULL PROMISE OF RENEWABLE ENERGY
Modernize FERC Regulations to Achieve Full Promise of Renewable Energy
Nina Plaushin/Energy Central’s Transmission Professionals Group
20 January 2021
The mantra for 2021 ought to be: “If you like renewables, you better love transmission.” All energy resources rely upon electric transmission to deliver energy to customers, support energy markets, and maintain system reliability, but none more so than renewable energy.
While there is growing consensus on the need for increased transmission infrastructure investments, the regulations and regional planning processes that served to dramatically expand transmission infrastructure a decade ago are failing today. Shovel-ready energy projects are hampered by severely backlogged interconnection queues, outdated planning processes, and cost allocation debates that remain polarized. With lead times for large-scale transmission projects spanning up to a decade or more, policymakers and stakeholders must act swiftly to address the regulatory bottlenecks that threaten America’s path to a cleaner energy future.
The rate of change the power sector will experience over the next several decades will be unprecedented. Not only are customers, states, and Fortune 500 companies demanding cleaner energy, but the economics of renewable resources have become increasingly more attractive for energy developers and providers. However, it will not be possible to meet these demands without additional, large-scale transmission projects to carry energy from remotely located renewable generation to where it is needed. Further, new transmission will be needed to balance the high levels of renewable, intermittent energy moving through the grid.
Lower electric bills
With President Biden’s goal of decarbonizing the U.S. electricity sector by 2035, high-voltage transmission should take center stage as the enabler of this ambitious undertaking. That does not necessarily mean higher costs for consumers. In fact, a recent study from the University of California, Berkeley and GridLab indicates that achieving a 90% clean-powered grid by 2035 could deliver wholesale electricity costs 13% lower than today, boosted by about $100 billion in transmission expansion investment.
While electric transmission is the clear choice for renewable integration, its value is larger than the physical grid. As the country begin to rebuild its economy following the pandemic, policymakers must recognize that electric transmission infrastructure is a strategic asset that can provide economic stimulus. Modernizing the electric grid presents a unique opportunity to create hundreds of thousands of jobs. It can also generate sustained, long-term economy-wide benefits while helping achieve public policy goals. The World Resource Institute reported that that every $1 invested in U.S. transmission infrastructure creates $2.40 in economic benefits. And investing in transmission would put more people back to work.
Unfortunately, absent needed policy reforms, these numbers are merely statistics demonstrating what could have been. In direct conflict with our nation’s ability to achieve these goals is the Federal Energy Regulatory Commission’s (FERC) outdated planning regulations.
As the Commission sets its 2021 agenda, removing bottlenecks in transmission planning and making reforms to Order 1000 must be a priority. Generation shifts, new technologies, and electrification of the transportation sector are all rapidly changing the energy landscape. It has been a decade since Order 1000 was issued. It is time for FERC to modernize regulations so our industry can modernize the grid.
Nina Plaushin is Vice President, Regulatory and Federal Affairs for ITC Holdings Corp.