The stars are aligned for a big chunk of transmission infrastructure investments across the country. Statements from New England Governors, PJM on offshore wind integration, and Midwest Governors Association offer insights into future transmission plans for renewables. However, since transmission — specifically high voltage lines — cannot be built overnight, the state and federal policy advisors should not lose sight of distributed energy resource (DER) potential and alternatives to transmission solutions.
Leveraging both utility-scale renewables and distributed generation makes more sense to balance the curtailment risk with an abundance of renewable energy production.
The New England States focus on regional transmission planning
The New England States have the most experience with regional transmission planning and are in tune with Biden’s future administration’s policy goals. Even though Midwest and PJM states have regional planning experience, they do not come close politically to what New England states have.
New England states see offshore wind mandates leading to jobs, reduced reliance on natural gas pipeline infrastructure, and more transmission planning with ISO-NE. Moreover, there is a track record for reduced carbon emissions via energy markets in the New England area.
FERC Technical Conference on Offshore Wind points out, “transmission first.”
Until now, transmission planning was tough with not knowing where future generation would be. Generator interconnection queues only provide insights 5 years out. Even then, once the transmission upgrade costs are known — developers drop out of the queue leaving behind someone else to pick up the upgrade costs leading to delays on in-service dates for transmission projects. With state mandates on offshore wind, there is certainty on where a resource is located — in the ocean, “offshore.” For the first time in the industry, transmission planning leads with at least one variable certainty — the future resource location. This resource location certainty is what PJM refers to as “transmission first.”
A Biden Presidency could also mean Commissioner Richard Glick, Democrat, as the FERC Chair. Commissioner Glick also supports both energy storage and distributed energy resources. Ms. Allison Clements of Ohio may be the other Democrat once confirmed by Senate.
Midwest Governors Association has traditionally led on transmission planning
Midwest governors have a strong bipartisan record of working with FERC jurisdictional RTOs in their states, such as MISO and SPP. MISO’s Multi-Value Project (MVP) and SPP’s transmission project cost allocation have kept positive relations between Midwest states and their RTOs, unlike New Jersey in PJM.
Additionally, both SPP and RTO do not have PJM capacity market challenges. MISO has a voluntary capacity auction, incorporating capacity needs identified in states’ Integrated Resource Plan (IRP). Allowing more distributed energy resources to participate in state IRP to fill the system’s future capacity needs ensures revenues for DERs at both MISO and SPP energy and ancillary market services.
The political reality
There is room for an infrastructure bill in the next two years with a Democrat in the White House and perhaps a Republican-controlled Senate. And the need for transmission is consistently brought up by the clean energy industry. Since the Department of Energy (DOE) cannot physically build transmission, there is a greater chance for research and development on newer transmission technologies, more grid integration studies, and more national laboratories funding.
What is unknown in this political reality is how individual states react when high voltage transmission is in their backyards? What happens if high voltage direct current (HVDC) only passes through and does not provide jobs in a state? DERs can help in this new political landscape.
Potential for DERs in FERC Order 2222
FERC has made significant policy moves since the last Presidential election in 2016. FERC Order 841 on electric storage resources, FERC Order 2222 on DER Aggregation, convening technical conferences on COVID-19 impacts, offshore wind, and upcoming roundtable on electric vehicles — all point to a federal commission aware of the prosumer, a consumer intent on producing energy for their purposes. This prosumer awareness should translate into a role for DERs on the transmission grid.
With a pent-up desire to advance clean energy policy goals from both federal and state administrations, there is no doubt there shall be an increased focus on regional transmission planning. However, the transmission is not the only medicine on the market to integrate renewables. Alternatives to transmission solutions exist, including distributed solar, and behind the meter energy storage.
Leaving behind small renewable developers to appease utility-scale ambitions only divides the clean energy community into “renewable project developers with financial capabilities to withstand queues” and “developers without those capabilities.” Since transmission takes time to implement, distributed scale renewables should address the transmission system’s immediate capacity needs.