Towering wind turbines and vast fields of solar panels are the mascots of the renewable energy transition. But decision makers, including President Joe Biden, are rapidly realizing that a successful transition hinges on energy transportation as much as generation.
Gridlocked: These policies might put Biden’s transmission infrastructure plans on hold
Source: By Ysabelle Kempe, Grist • Posted: Tuesday, May 4, 2021
Biden wants to spend billions on electricity transmission — but current projects are stuck in red tape.
“Our grids are vulnerable to storms, hacks, catastrophic failures — with tragic results, as we saw in Texas and elsewhere during the winter storms,” Biden said in his first speech to a joint session of Congress last week. He highlighted his $2 trillion infrastructure proposal, which he said “will create jobs that lay thousands of miles of transmission lines needed to build a resilient and fully clean grid.” The speech came just days after his administration announced $8.25 billion in new Energy Department loans to finance “innovative” transmission projects, including those that would transport renewable energy generated in the West or that are owned by tribal nations and Alaska Native corporations.
There’s just one hitch to this ambitious plan to expand the country’s grid: It is difficult to build electric transmission projects as quickly as necessary under current U.S. policies. A new report by the nonprofit Americans for a Clean Energy Grid identifies 22 high-voltage transmission projects that are “shovel-ready,” meaning they are mostly or completely sited and permitted. The transmission lines would create an estimated 600,000 jobs and interconnect 60,000 megawatts of new renewable energy capacity, boosting the country’s wind and solar generation by nearly 50 percent.
The projects are scattered across the country and include the long-contested, 800-mile Grain Belt Express, which would help transport wind energy from Kansas to the densely populated eastern United States, as well as the 550-mile SunZia Southwest Transmission Project stretching across Arizona and New Mexico. In the Northeast, there are projects like the Champlain Hudson Power Express, which would bring Canadian hydropower down to New York City.
But while developers say they are prepared to begin construction, many of the 22 projects are being held up by financing and administrative barriers that, the report said, could be addressed if decision makers enact more “workable” policies. The report proposes changes such as streamlined project siting and permitting, a tax credit for transmission projects, and direct investment by the federal government in new transmission lines.
Some of these “shovel-ready” projects have been in the works for a decade or more, going through years of siting processes and environmental reviews, said Rob Gramlich, one of the report’s authors and the founder of Grid Strategies, a clean energy transmission consulting firm. This decade-long pace, he said, is nowhere near fast enough to reach the country’s clean energy goals. Under current policies, Gramlich expects only half of the 22 projects identified in the report to come to fruition at all.
Inter-state transmission lines are necessary to transport renewable energy throughout the entire country, but they are difficult to construct since transmission projects are approved at the state, rather than federal, level. Developers must go through time-consuming siting and permitting processes in each state they want to build through, and if their project runs through any federally owned land, they must also obtain permits from the federal government. Frustratingly for these developers, new presidential administrations can alter the standards for siting and permitting on federal land, even if a project has already made headway in the process. “You might go through two and a half presidential administrations, and you might get new decision makers who come up with new guidelines for all of those permits,” Gramlich said. “The request from a number of these developers is ‘Look, if you’re going to change the rules, just grandfather in the existing projects that are already through a whole bunch of the hurdles.’”
In response, the Biden administration has moved to speed up siting and permitting for transmission lines: Transportation Secretary Pete Buttigieg announced last week that his department will encourage states to host transmission lines along transportation rights-of-way such as public highways. “Today’s actions can provide a model for our private partners, like railroads, to do the same,” Buttigieg said in a White House statement.
One of the most urgently needed policy changes, several clean energy experts and transmission developers argue, is an investment tax credit specifically for transmission projects, which would allow developers to deduct a certain percentage of their costs from their federal taxes. A bill establishing a tax credit for transmission lines has already been introduced by Senator Martin Heinrich, a Democrat from New Mexico, and the concept also appears in Biden’s major infrastructure proposal, the American Jobs Plan.
Whereas utilities know they can recover the cost of new transmission lines from the ratepayers they already serve, private developers need to confirm that at least a portion of the energy they transport will be purchased, whether it’s by utilities themselves or large corporate energy users like data companies. Many developers, Gramlich said, are ready to begin building, but don’t have quite enough customers to comfortably pull the trigger on construction. A tax credit would help the “project economics pencil out,” he explained, boosting transmission projects over the hump toward completion.
If renewable energy transmission lines are built out successfully throughout the nation, they will create a more resilient grid, said Liza Reed, a research manager for low carbon technology policy at the Niskanen Center, a D.C. think tank. That’s because power can be sent where it’s most needed. A more developed transmission system, she said, will also keep the price of energy low, since resources and development costs will be spread across more consumers. But before the American people can see these benefits, transmission developers need to get metal in the ground and wires in the air.
“It’s really easy to sit down and draw lines on a map to talk about how we are going to move renewable energy around,” said Seth Blumsack, a professor of energy policy and economics at Penn State University. “But the reality is … then you’re going to argue about who pays for it for 20 years and how to get the thing built.”