Replacing fossil fuels with renewables from wind and solar will depend on upgrading the electricity grid, which is currently plagued by planning delays and gridlock. To address these issues, the Federal Energy Regulatory Commission (FERC), which oversees the planning of utility companies and grid operators, is proposing new transmission planning rules. While these reforms are open to discussion, it would be useful to take a close look at the recent practices of the five US regional system operators to see what FERC should include in its new rules.
System operators need transmission plans that take into account the old installation retirements and incorporate new policies that stimulate the construction of wind farms and solar power plants. The baseline planning scenario is not a case of doing nothing, and common sense scenarios that respond to the expected pace and magnitude of change should prevail.
Recent efforts by two network operators, the Midcontinent Independent System Operator (MISO) and the California Independent System Operator, show what can be accomplished with network planning. Planning for these two regions builds on a repeated practice of considering more renewables in the supply mix and less fossil fuels due to plant closures.
The Midwest (sort of) carries on a proud tradition
MISO’s current transmission expansion plan requires more than $3 billion in upgrades, spread across a region of 42 million people. MISO planning has struggled to keep pace with change since large amounts of wind power became available from 1999. In recent years, MISO has worked with scenarios that recognize that “the transmission system does not no longer serves the same resources for which it was designed and transmission upgrades are required to accommodate the integration of new resources.
MISO is gaining our support in recognition of its recent request that FERC approve cost sharing allowing for a planned $10 billion additional transmission package with economic benefits 2.6 times greater than cost. With such regulatory cost planning and allocation efforts, imperfect as they may be, MISO demonstrates the persistence and problem-solving needed to move forward with FERC’s current light oversight of utility transmission investments. audiences and the continuing case of Entergy’s monopolistic behavior.
California works with Planning scenarios
California’s ISO plans, both its annual transmission plan and its first 20-year transmission outlook, build on state policy and procurement efforts. California has long had a policy in place affecting retirements and the sourcing of new supplies. The transportation plan reflects inputs and assumptions about state-induced year-over-year changes.
California’s ISO has taken planning to a new level with its 20-year transmission outlook project. California’s policy work is years ahead of other grid regions when it comes to decarbonizing the grid, electrifying transportation, integrating solar power and dealing with plant closures. In the words of California’s ISO: “The 20-year transmission outlook provides a long-term conceptual plan for the transmission network 20 years from now, addressing resource and electrical load needs aligned with agency inputs. report on integrated load forecasting and resource planning, as a basis for further dialogue.
PJM looks at renewable energy planning
In November, PJM – the grid operator for 13 states from New Jersey to North Carolina and west to northern Illinois – released a transmission report outlining renewable supplies to meet electricity standards renewable energy in the region and offshore wind plans. PJM worked with the five coastal states through individual meetings to determine relevant planning scenarios.
PJM has only recently considered state energy policies relevant to its FERC-licensed role as a transportation planner for its region. When PJM released the transmission report, it surprised stakeholders with its approach and results, as PJM’s planning currently relies only on already announced binding commitments from power plant owners to close or open power stations. This short-term approach limits the information considered by PJM and its plans are extremely modest. With this new report and acknowledgment of state policies, PJM is only beginning discussions with stakeholders on reforming its planning process.
What PJM saw in its first look
The PJM report developed five scenarios for construction to meet state requirements. By planning a set of changes, rather than taking each change incrementally without foresight, the report estimated costs ranging from $627 million in the short term to between $2.16 billion and $3.21 billion for the scenarios. long-term. In mid-March, I wrote that PJM and Illinois needed to work on grid and power modifications to meet Illinois Climate and Equitable Jobs Act carbon reduction targets. The 2021 law allows, but does not require, PJM to plan ahead because various fossil fuel power plants must reduce and then cease emissions by a specific date.
What New England Sees
The PJM and ISO-New England (ISO-NE) markets share origins and a misguided belief that planning for change will jeopardize the profitability of existing power plants. These two grid operators have also fallen behind the others in wind and solar accommodation despite widespread pressure for cleaner electricity in their regions. This led to New England states urging ISO-NE to begin planning reform. In December, FERC approved an additional ISO-NE transmission planning process for state-requested scenario-based analysis to help policymakers, utilities, and stakeholders understand network needs. to replace fossil fuels with clean energy. ISO-NE is currently unveiling an estimate of the transmission investments needed to enable decarbonization efforts for 2035, 2040 and 2050.
SPP & MISO Show “You won’t know until you try”
The latest of these recent initiatives demonstrates a first attempt to address grid issues that cross the boundary between the Southwest Power Pool (SPP) and MISO. At the end of 2020, these two network operators set aside their own longstanding reluctance to engage in a joint planning process and identified, as the CEOs of both put it, “the transmission needed to address historical challenges faced by generators near shared borders.” between our two Regional Transport Organizations (RTOs). These challenges have resulted in projects being dropped from the study process as costly network upgrades are triggered. »
This joint process is unusual as it examines the benefits of interconnected transmission, and for a long time RTOs were unable to overcome the hurdles of comparing their data and assumptions. Now the challenges are still there, but the engineering is done. The lesson here is for all network managers: they started the necessary work without having all the hard questions answered, but found ways to move forward.
Seeking FERC to plan reforms
Transmission has always been a monopoly with regulations to ensure that costs and services are reasonable and non-discriminatory. I looked at these new plans to see what is possible and where some best practices could be applied to regions that are less engaged in planning.
Transportation customers, both supply and demand, benefit from MISO given the expanded benefits of its multi-value plan, the provision of California ISO transportation to meet state requirements, and the joint effort of SPP and MISO. In other regions, network managers have not developed new transport plans that can be implemented, or worse, have ignored the benefits of this planning.
When FERC inquired about current transmission planning practices, it received more than 170 sets of customer and industry comments calling for planning reforms. Many of these comments raised issues that many mistakenly assumed had been addressed by FERC’s past utility transportation planning reforms, and all of the planning issues have real-world impacts on the power system. electric.
Previous FERC reforms expected network operator collaboration and information sharing to meet public needs and consumer interests. In practice, the selection of planning criteria, assumptions and scenarios by system operators ultimately determines what gets built, when and who pays. Current FERC rules allow inappropriate practices by network operators and provide opportunities for abuse and discrimination, and the results cloud understanding of consumption costs for transmission and energy.
To achieve the consistent and widespread planning alluded to in the examples described here, FERC and state governments must make changes. Inside and outside the regional network organizations, network modernization cannot wait for the self-interest of enterprises in a monopoly environment. Practices within a public service and across public service boundaries must not exclude and discriminate to protect obsolete assets and public service fiefdoms. Planning is key, and regulators must broaden the scope of needs, solutions, and measured benefits that planners count to modernize the network.
Originally published by the Union of Concerned Scientists, The Equation. By Mike Jacobs.
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