US grid congestion costs jumped 56% to $20.8B in 2022: report

Source: By Ethan Howland, Utility Dive • Posted: Sunday, July 16, 2023

Costs to consumers from congestion on the U.S. power grid jumped 56% in 2022 to an estimated $20.8 billion from $13.3 billion the year before, partly driven by fuel price volatility, according to a report released Thursday by consulting firm Grid Strategies.

Congestion costs in regional transmission organizations, outside California, grew to about $12 billion last year from $7.7 billion in 2021, Grid Strategies said. The costs don’t include congestion between grid operators.

At $3.7 billion, the Midcontinent Independent System Operator led the way in congestion costs in 2022, followed by the Electric Reliability Council of Texas at $2.8 billion and the PJM Interconnection at $2.5 billion.

Factors affecting congestion costs include last year’s Winter Storm Elliott, transmission outages and rising electricity demand in some areas, according to the report.

Grid Strategies used the RTO data to estimate U.S.-wide congestion costs.

Congestion costs occur when there isn’t enough transmission capacity to deliver the lowest-cost generation to consumers, the consulting firm said. Instead, consumers receive more costly power.

In recent years, few large-scale, high-voltage transmission lines have been built in the United States, according to the report. At the same time, few U.S. utilities use “grid enhancing technologies,” called GETs, such as dynamic line ratings, advanced power flow control or topology optimization that allow for more efficient use of existing grid infrastructure, Grid Strategies said.

There are at least three pathways to easing grid congestion, according to the report.

In the near-term, GETs can increase transmission capacity on existing wires, relieving at least 40% of congestion in many cases, Grid Strategies said.

Grid enhancing technologies can be deployed to reduce congestion in the near term and supplement future traditional transmission infrastructure development, which can take a decade or longer to move from planning to operations,” Richard Doying, Grid Strategies vice president, said in a statement.

A Federal Energy Regulatory Commission-National Association of Regulatory Utility Commissioners task force meets July 16 to discuss GETs.

In the medium-term, replacing traditional steel power lines with advanced conductors that contain carbon and/or composite cores allow the lines to carry more capacity, the consulting firm said.

In the long-term, large-scale and high-voltage transmission lines are needed, but they can take years to develop and build, according to the report.