Why wires matter for Biden

Source: By Josh Siegel, Washington Examiner • Posted: Tuesday, July 27, 2021

President Joe Biden’s success in pursuing 100% carbon-free power by 2035 could come down to wires, a key part of his infrastructure agenda that I spotlight in a special edition of our magazine (paywalled).

Interstate transmission lines are critical to transporting electricity from places, typically rural areas such as the Great Plains, that have an abundance of wind or solar to consumers in population centers.

Biden’s goals of carbon-free power by 2035 and net-zero emissions across the entire economy by 2050 will require a doubling or tripling of the U.S. transmission system, according to a recent report from the Energy Systems Integration Group, a nonprofit organization that advises on grid planning.

The problem facing Biden: Major long-distance transmission projects are notoriously difficult to build, often crumbling due to public opposition, and the primary siting authority lies with individual states, not the federal government.

“Everyone knows from an engineering perspective that more transmission makes all the sense in the world, but from a societal aspect, it just runs into roadblocks,” said Aaron Bloom, a board member of the Energy Systems Integration Group.

Bloom said the current transmission system cannot support even half of the nation’s power coming from clean or zero-carbon sources, let alone 100%.

Risks to 100% clean power agenda: Biden faces risks if Congress enacts his proposed clean electricity standard, a key plank of his infrastructure plan that would require utilities to generate 100% carbon-free electricity, without sufficient transmission built to spread massive amounts of clean energy between states.

“The biggest risk is you are going to end up not developing the most cost-effective resources you can,” said Jeff Dennis, managing director and general counsel of Advanced Energy Economy, a group representing clean energy companies.

What’s being done: Biden’s $2.25 trillion green infrastructure plan being debated in Congress envisions a significant role for new transmission, which his administration is pitching as not just boosting clean energy use, but also enabling different regions to share power during crises like the recent blackouts in Texas.

Biden’s infrastructure plan calls for an investment tax credit to spur the construction of at least 20 gigawatts of long-distance transmission lines, a subsidy that proponents say can encourage independent developers who have to find their own financing to start construction.

He also proposes the creation of a federal transmission authority within the Department of Energy to coordinate planning, design, permitting, and the construction of new lines.

Separately, in April, the Transportation Department issued guidance to states on how to build transmission lines along existing highway right-of-ways.

“The administration is very serious about transmission,” said Rob Gramlich, executive director of Americans for a Clean Energy Grid, a coalition of clean energy groups that aims to expand the nation’s transmission system.

FERC progress: Biden also has an important ally prioritizing transmission policy in Richard Glick, the Democratic chairman of the Federal Energy Regulatory Commission.

FERC this month took a first step this month calling for public comment on potential changes to transmission siting, regional coordination, funding for projects and oversight on customer costs.

Critically, FERC is exploring whether it should allow the costs of new transmission projects to be charged more widely to users across the entire line.

Generally, new transmission lines are paid for by power generators building new projects, such as a wind farm, that require more transmission capacity.

But electricity users across different states that are connected to the same grid would benefit from the new transmission because they would be paying cheaper power prices resulting from more wind energy. So, those customers should bear some of the costs, say proponents of reforming the rules.

FERC has also taken interim policy steps such as setting up a federal-state task force to explore how to resolve tensions between them in siting projects, along with nudging states to develop their own interstate projects jointly.

Where we are: Michael Skelly, a clean energy entrepreneur known for his failure in the 2000s to build a big interstate transmission line, told me he’s confident the changing policy environment will push projects across the finish line.

He notes that today, state and federal governments, along with utilities, are setting clean electricity goals that recognize the value of transmission.

“It is a somewhat different time now,” Skelly said. “At Clean Line, we knew transmission was the big problem, but now, everybody knows that.”