Planners chart role of renewables in Eastern power grid’s future

Source: Peter Behr • E&E • Posted: Wednesday, January 4, 2012

Utility executives and state regulators from 39 states will study three widely different scenarios for the future of the Eastern power grid, to determine how far and fast the high-voltage transmission network must expand to make those futures happen.

The planning project, funded by an Energy Department American Recovery and Reinvestment Act grant, is the first comprehensive study of how power flows could be coordinated across the entire Eastern Interconnection — the synchronized power grid across the 39 states and six Canadian provinces that links 740,600 megawatts of generation with electricity customers from the Atlantic Coast to the Rocky Mountains. DOE also is funding similar studies for the Western Interconnection grid and the separate Texas grid.The Eastern Interconnection study’s¬†first phase, released last month, chose the three future scenarios for the grid requirements between now and 2030. Those will be fleshed out with detailed modeling of transmission requirements, with conclusions due a year from now.The most challenging scenario assumes congressional enactment of a national climate strategy to reduce economywide carbon emissions by 42 percent from 2005 levels by 2030 and 80 percent in 2050. Thirty percent of the nation’s electricity needs would be supplied by renewable power by 2030, along with a significant expansion of energy efficiency programs, demand response, distributed generation and smart grid technologies. This future would require extensive inter-regional planning and coordination across the interconnection.

The second scenario would meet 30 percent of the nation’s power requirements from renewable resources by 2030, but would depend on regional strategies.

The third “business as usual” scenario assumes that existing transmission and environmental rules remain in place and that national carbon abatement and renewable power goals are not established.

“The goal is not to determine what the future will be. It is more creating the playing field and boundaries that we think the result will end up within,” said David Wheatley, executive director of the Eastern Interconnection Planning Collaborative (EIPC), the project’s consortium of utilities, regional transmission companies, wind generators, public power organizations, consumer representatives and environmental groups. The National Association of Regulatory Utility Commissioners represents state regulators in the project.

No call for federal planning

The project will identify areas of prime renewable and “clean” energy potential, including onshore and offshore wind power sites and potential areas for carbon capture and sequestration, the report notes. It does not choose which types of generation should be built between now and 2030 except for the overall renewable energy goals in the first two scenarios. Nor will the transmission modeling in the coming year pick specific routes for high-voltage transmission lines or work out how the natural gas pipeline system would have to expand if gas-fired generation accelerates as now expected.

The fact that such a diverse group of generators, renewable energy advocates, grid operators and regulators could come together around a consensus plan to model the grid’s possible futures is a major achievement, Whiteley said. The results will support the Federal Energy Regulatory Commission’s policy requirement for more inter-regional coordination of grid flows and create a template for handling major changes in the power sector if a national renewable policy or carbon goals are created, he said.

The project does not make the case that more federal involvement in transmission is required, Whiteley said. Given the strong roles in the project of existing power-sector companies, state regulators and regional transmission operators, that was not in the cards, project participants have said. (The Eastern Interconnection includes regional transmission operators like the mid-Atlantic-based PJM Interconnection, regulated utilities that operate statewide grids, and public power organizations like the Tennessee Valley Authority).

EIPC’s report concludes that “the regional planning processes are the appropriate routes for future transmission planning,” Whiteley said of the grid’s current patchwork of authorities. “Not that interconnectionwide planning isn’t necessary, but that it should be a bottoms-up buildup from the regional approach. Therefore, there isn’t a need for federal planning,” added Whiteley, a consultant and former executive vice president of the North American Electric Reliability Corp., the grid’s operations monitor.

Study finds no ‘train wreck’ coming, but critics disagree

The study concludes that the challenges facing the grid under the various potential scenarios are significant but manageable.

“Today’s electricity grid in the Eastern Interconnection as a whole is generally being used at, or near, full capacity,” the study concludes. Whiteley adds that the grid today “is in a good place. It is reliable. None of the study results seem to be so different that we just don’t know how to get to those futures. It’s all within the grasp of the technology and the ability of the planners,” he said. “It’s not that we’ve somehow got a real train wreck coming in the future.”

A different conclusion emerged last month in a Massachusetts Institute of Technology¬†report, “The Future of the Electric Grid.” The report, based on a two-year study by the MIT Energy Initiative and backed by leading advocates of grid investment and renewable power, including General Electric Co., Iberdrola, ABB Group and Cisco Systems, urged enactment of stronger federal policies to modernize and strengthen the nation’s electric power networks.

The United States is not making headway, for example, in creating a coordinated national policy to defend the grid against cyber attack, or to create time-of-day electricity pricing plans that incentivize an efficient use of the grid to recharge electric vehicles at night, the study authors said.

Although federal policies appear frozen, profound changes in the power grid will continue, driven by state renewable power mandates, the aging of current U.S. generators, shifts in the way the U.S. economy consumes power, and efficiencies utilities gain from smart grid technologies, the study authors say. This will be so whether or not a national carbon abatement goal is established, the study says.

But the absence of national policies to organize a future grid, a piecemeal expansion of renewable power and electric vehicle purchases in parts of the country, will make the grid harder to manage, the study concludes. A bigger transmission network, supported by backup federal power line siting authority, and pricing policies that encourage nighttime electric vehicle recharging are required to offset growing pressures on today’s grid, the MIT study says.

“You’ve made a more complicated system,” said Jerome Grochow, former MIT vice president for information systems and one of the study authors. “The question is, can you maintain the reliability of that system? Sure you can, but it is going to cost money.”

Optimism despite federal uncertainties

The three scenarios in the Eastern Interconnection study reflect the ongoing competition between change and status quo on the grid, as well as between incumbent power companies and potential new sources of electricity generation and new transmission providers, grid experts say.

“I see people trying to make change,” said Richard Schmalensee, former dean of the MIT Sloan School of Management and a leader of the MIT grid study. “I see a lot of status quo.”

The outlook for continued state-by-state investment in renewables is jeopardized by the uncertainty of continued federal tax credits and subsidies for renewable energy, according to U.S. wind energy developers. The current production tax credit for new wind projects — a key factor in the rapid expansion of wind power in recent years — is set to expire at the end of 2012, and its renewal is in doubt.

“I don’t think renewables are going to plateau,” Schmalensee said. “The growth may slow. But they will continue to grow.” The state activity is based principally on the argument that building renewable power is good for job growth rather than climate benefits, he said. “I don’t think the jobs argument withstands intellectual scrutiny,” he said. “That doesn’t mean it doesn’t have political legs.”

It is a matter of debate whether a substantial expansion of renewable power, the first EIPC scenario, and the resulting makeover of the grid will occur without a comprehensive national climate and transmission policies.

“It would be a very good thing if Congress passed laws to get more transmission built. It would be good if we had a much higher level of federal involvement in transmission siting,” said Michael Skelly, co-founder and president of Clean Line Energy, a Houston-based independent transmission developer that seeks to build multi-state high-voltage projects to connect prime wind power areas with urban centers.

“But all the projects we’re doing can be done in the context of existing law,” he added. “Our approach is very much bottom-up.

“Sure, there are competing interests,” he said. The possible expiration of the wind power tax credit is a worry, too, he added. “But I don’t think the U.S. is going to totally give up on renewable energy and say, ‘You know, we don’t want any of this stuff.'”