Transmission, Part III: Alternative Solutions

By Joni Sliger, Energy Fellow

Distributed generation, like this solar facility in Hawaii,
could reduce the need for new transmission lines.
Credit: SunPower / NREL

Our electricity system depends on transmission infrastructure, and our clean energy future may well depend on the development of new and upgraded transmission lines. This blog series has explored the significance of the transmission system and one way (forming an RTO) to manage the system better for greater regional benefits. This final post explores three ways to advance a clean energy future while minimizing the need for new transmission investments.

1. Build Locally

One way to reduce the need for new transmission is to produce more electricity locally. Our current transmission system carries electricity to us from power plants that may be hundreds of miles away. While it may be desirable to build some lengthy transmission lines to reach distant renewable energy sources, the need for new lines can potentially be offset by siting power sources near demand.

One way to build local is to encourage distributed generation, such as rooftop solar. This requires encouraging individuals and businesses to produce their own renewable energy on-site. For example, in Oregon, one key policy driving rooftop solar is the Residential Energy Tax Credit. If the legislature fails to extend the tax credit beyond its 2017 sunset date, Oregon is likely to see fewer rooftop solar installations and more need for costly transmission investments.

2. Invest in New Technologies, like Ocean Energy

Ocean energy, including wave energy and tidal energy, is an under-developed resource that would enable much more local energy production along the coasts.  As I’ve discussed previously, over half of the U.S. population lives within 50 miles of a coastline. According to the Bureau of Ocean Energy Management, wave energy alone could feasibly meet almost a third of the U.S.’s energy needs. Oregon could build short transmission lines out to ocean energy facilities along its coast instead of building lines hundreds of miles long to reach out-of-state resources, like wind farms in Wyoming.

At the forefront of marine energy development, Oregon has enacted a policy position that recognizes the importance of ocean energy. In 2015, the legislature passed a law (now codified as Oregon Revised Statute § 757.811) to mandate that “any regional planning processes . . . adequately consider the transmission of electricity from ocean renewable energy.” While more research and development is needed to bring more ocean energy sources online, Oregon has taken one important step towards smarter transmission planning through this law.

3. Leverage Existing Infrastructure, like Railroads, for Transmission Lines

Electrifying the railroad system offers another way to develop the transmission we need while minimizing the cost and environmental impacts. Instead of paying for expensive siting procedures to, for example, minimize impacts on wildlife, we can leverage the existing railroad system by integrating new transmission lines into the railroads. Electric lines can carry more electricity than the trains need, allowing the railroads to serve as both a clean transportation strategy and a ready transmission solution.

A campaign called Solutionary Rail is advocating for railroad electrification as a way to revitalize rural communities, provide a ‘just transition’ for railroad workers needing employment as the industry moves away from predominantly shipping fossil fuels, and to provide the key transmission infrastructure we need to connect to distant renewable energy sources.  For example, the campaign is pushing first for the electrification of the BNSF Northern Transcon line between Seattle and Chicago. Electrifying this line could provide several benefits, including the transmission necessary for distant wind farms in Wyoming to reach power-hungry urban centers, like Seattle.

Electrified railroads are already a possibility; about half the rail lines in Europe are electric. Even just using existing railroad rights-of-way as a place to co-site transmission lines would facilitate an easier siting process. The U.S. should start looking to the future and invest, for the benefit of its environment, its economy, and its communities.

To attain a clean energy future, the U.S. needs to invest in its transmission system. By building locally, investing in new technologies like ocean energy, and leveraging existing infrastructure like railroads, we can build a better transmission system and a better world. 

Transmission, Part II: A Western RTO?

By Joni Sliger, Energy Fellow

"Photoshop art created from two NREL-Image Gallery
photos of sunset view of electrical power towers combined
with wind machines."
Credit: NREL and Raymond David (Photo Illustration)

A shortage of transmission capacity is a major constraint to the development of renewable energy resources, as I noted in my first blog post in this series on transmission. The Western Interconnection suffers from this shortage—termed a transmission constraint—as well as from transmission congestion, though not as much as other areas of the U.S. do, according to the Department of Energy’s 2015 National Electric Transmission Congestion Study. (The Western Interconnection is the aggregated grid that connects each transmission and distribution system together in all or part of the fourteen western continental states as well as parts of Canada and Mexico.) This post explores one popular idea for improving transmission systems in the West: forming a western Regional Transmission Organization (RTO).

What is an RTO?

An RTO is a third-party entity that manages the transmission systems of every participating utility within the RTO’s territory. (The term RTO is often used interchangeably with the term independent system operator, or ISO, despite some technical differences. As noted below, an RTO might take the form of an ISO.) An RTO balances the grid by managing the dispatch of electricity generation and by operating several wholesale power markets (such as a ‘day-ahead’ market and a ‘spot’ market). As I discussed in my last post, balancing the grid is vital to maintain the proper frequency and to avoid power outages. Ten RTOs now operate in parts of North America, such as the California ISO (CAISO). Together, they manage about two-thirds of the electricity sold in the U.S.

For a third party to manage the transmission system as an RTO, the Federal Energy Regulatory Commission (FERC) must approve it. FERC encourages the “voluntary interconnection and coordination” of electric facilities, such as by RTO formation, pursuant to FERC’s mandate in Section 202(a) of the Federal Power Act of 1935 (currently codified at 16 U.S.C. § 824a) to provide for a more efficient electricity system.

In the 1990s, FERC began taking significant action to promote RTO formation, when grid management grew increasingly complex as more independent power producers (IPPs) (that is, non-utility electric generators) began seeking transmission access and as some states began restructuring their monopolistic electricity sectors. In 1996, FERC issued Order No. 888 to require that transmission owners provide access to transmission to others on the same terms as they provide to themselves. This is called ‘open access transmission’ and discourages discrimination against IPPs. FERC noted one way to comply with this order would be to have an ISO manage the grid, where the ISO offers everyone the same terms. Order No. 888 thus described several “principles” to guide the formation of ISOs. The term RTO arose after the issuance of Order No. 888. In 1999, FERC promoted RTOs (which it said could take the form of ISOs) in Order No. 2000, which required all transmission owners to propose an RTO for FERC’s approval, report on efforts to form an RTO, or explain why the owner had not pursued participation in an RTO. Order No. 2000 also described the key characteristics and functions of an RTO. FERC does not require a “‘cookie cutter’ organizational format” but will review any proposal that meets its standards.

In short, an RTO is a FERC-approved third-party entity that manages the grid.

What are the Benefits of Having an RTO?

FERC promotes RTOs as a way to encourage a more competitive marketplace, which should theoretically reduce electricity rates for consumers. The ISO/RTO Council notes four major benefits are greater reliability, efficiency, transparency, and market innovation. For example, most renewable energy sources (other than those necessary to comply with a state’s Renewable Portfolio Standard) have been built in RTO territory, where intermittent suppliers, such as solar and wind power generators, enjoy a more favorable market. Short-term markets, such as a spot market, enable intermittent suppliers to sell power as they generate it.  

Another noted benefit is that RTOs eliminate a pricing inequity known as “pancaked rates.” To deliver power, producers must buy transmission services. When the transmission owners operate separately, each can charge a producer for using its transmission system. The pile-up of charges is known as rate pancaking. The total fee may be too high for a producer to afford to use transmission and therefore hinders long-distance transmission, even if necessary to get rural renewable power to power-hungry demand centers. The expense of facing pancaked rates rises with the number of systems one crosses; when one is participating in an RTO, one pays for transmission services but only from the RTO. Rates are not pancaked, which is a major benefit of RTO participation. Indeed, FERC describes the elimination of rate pancaking as a “central goal” of its RTO formation policy.

Additionally, an RTO enables greater efficiency by, for example, consolidating balancing areas. A balancing area is the territory within which an entity (called a balancing authority) must balance the grid to ensure reliability. A balancing area may be as small as an individual utility’s territory. By participating in an RTO, that utility can join its balancing area (or “footprint”) to those of other participants. As can be seen in the following map of the United States, each RTO manages its regional territory as a single balancing authority.  An RTO thus creates a geographically broad wholesale power market that enables participants to buy and sell power produced throughout a large area. This means, for example, that an excess of wind power produced in one state could quickly and easily be transmitted to serve demand in another state.

Credit: Energy Information Administration

Is a Western RTO Possible?

As one can see in the map above, most of the West is outside of RTO territory. CAISO only operates in portions of California and Nevada. Recognizing the potential benefits of forming an RTO, entities in the West have been discussing forming a western RTO. Such discussions are not new. In the early 2000s, there was a proposal called “RTO West.” However, the proposal failed, in part because of the California energy crisis and because of opposition to changing the Bonneville Power Administration’s operations (and potentially raising its very cheap rates). Nevertheless, efforts to form a western RTO continue today.

I have blogged previously on a proposal for PacifiCorp to join CAISO, which could enable more renewables to come online and save consumers money at the same time. Proponents continue to push to expand CAISO and form a western RTO. As an example of the incremental success, this past February, the Balancing Authority of Northern California agreed to participate in CAISO’s Energy Imbalance Market (EIM) starting in 2019. (Though an EIM does not offer all the benefits of an RTO, it has provided significant economic benefits to participants). Unfortunately, the election of (pro-coal) President Trump and concerns about maintaining state control have dampened some efforts to form a western RTO, but proponents promise to persist.

Hopefully the movement to expand CAISO and form a western RTO continues to spread and will bring the benefits of an RTO to the West. Until then, renewable developers may continue to face the unnecessary costs of pancaked rates, for example. 

Transmission 101: Exploring the Hidden Currents

By Joni Sliger, Energy Fellow

"Photoshop art created from two NREL-Image Gallery photos of
sunset view of electrical power towers combined with wind machines."
Credit: NREL and Raymond David (Photo Illustration)

Hailed as the world’s largest machine, our nation’s transmission and distribution infrastructure is a critical component of our electricity system. These power lines carry electricity from every electric power plant to every electricity consumer. Investing in this infrastructure is necessary for the transition to a clean energy future. This blog series explores the issues surrounding transmission, both nationally and in the Pacific Northwest, and considers various options for meeting our transmission needs in the 21^st century. This first post offers a basic introduction to transmission in the United States.

What is Transmission?

Transmission, in the electricity world, refers to the flow of electricity from its generation source, like a power plant or a wind farm, to a local substation, typically over long distances. The infrastructure that carries this electricity is the transmission system. At the substation, the transmission system connects to the distribution system, which carries electricity on to consumers. One may view a map of the nearly 200,000 circuit miles of transmission lines in the U.S. on the Energy Information Administration’s U.S. Energy Mapping System.

As electricity travels on a power line, some of it is lost due to inefficiencies in the system. For example, power lines may unintentionally produce heat, which uses up some of the electricity on the line. Heat losses are a common problem: consider the remarkably inefficient incandescent light bulb, which loses 90% of the electricity it draws to unintentionally producing heat. The energy lost in transmission or distribution is called a ‘line loss.’

In the U.S., 5 to 6% of the electricity generated is lost due to line losses nationally. Inside Energy provides an interactive graphic of the line losses in each state; Wyoming loses the least power at only 2.2%, while Idaho loses the most at 13.3%. Losses vary depending on whether a state has more transmission lines or more distribution lines. Transmission lines travel farther distances than distribution lines, but they have fewer line losses, because they operate at a higher voltage. High-voltage lines can carry more electricity to consumers, ensuring more sales. However, the voltage is too high for household use, so transformers reduce the voltage at the substation and along the distribution system.

To sum up, transmission and distribution lines carry power from a generating source to a user. Transmission lines carry power farther distances but are more efficient, because they operate at a higher voltage than distribution lines.

What are the Problems with Transmission?

With almost 200,000 miles of transmission lines in the U.S., one may be surprised to hear that a lack of transmission capacity is a major constraint to bringing renewable energy sources online. Unfortunately, our current transmission system suffers significant limitations.

Time plays two roles in affecting transmission systems. First, the passage of time decreases the efficiency of transmission systems. Over time, transmission lines suffer physical wear and tear and become less efficient. Additionally, new technologies are discovered, so the lines become outdated. Most transmission lines in the U.S. are based on 1950s technology. Replacing these lines and associated infrastructure with newer technologies is often referred to as ‘modernizing the grid.’

Second, time affects the demands on the transmission system. In the U.S., electricity must be kept operating at 60 Hertz, the frequency of choice for our systems. Grid operators constantly monitor the system to ensure its frequency is stable. If the frequency changes too much, the system crashes, causing brownouts or blackouts. As consumers draw power off the grid, electricity must be available to replace it, so that operators can balance the grid. If more electricity is available than consumers need, producers have to throw it away. Advances in energy storage technologies, like modern battery systems, may soon enable producers to save this excess energy and avoid the use of ‘peaking plants.’ Peaking plants operate only when demand is at a high, even if only for a few hours or days a year; with such limited use, the construction of peaking plants is very expensive relative to the energy they produce. Without energy storage, the transmission system cannot take advantage of changes in energy demands.

Transmission lines can only carry so much electricity at one time. Their capacity varies with the age and efficiency of the technology of the line; newer lines can operate at higher voltages, which allows them to carry more power, while suffering fewer line losses, as noted above. With only a limited amount of capacity available, generators have to compete to get their electricity to the market for sale. A congested transmission system, where too little transmission capacity is available, creates a bottleneck that constrains electricity from getting to where it is needed. Financing the deployment of new sources requires access to a market, so bottlenecks are a significant impediment to possible development.

Where transmission lines are located affects whether generators face a bottleneck or not. Unfortunately, most transmission lines are currently located far away from the best sites for renewable energy development. As my colleague, Amy Schlusser blogged previously, we primarily built our transmission system to carry power from large, fossil fuel-fired power plants to power-hungry urban centers. In rural areas, where the potential to develop renewable energy is often greatest, there is often a lack of available transmission or capacity. In short, our transmission lines are built in the wrong places for a future powered by renewable sources.

To bring more renewable energy sources online, the most obvious solution is to build more transmission lines. This is extremely expensive and faces challenges in siting. Concerns include conflicts with local private property owners (and NIMBYism) as well as conflicts with other needs, such as environmental regulations to preserve wilderness and protect wildlife, such as sage-grouse. Other options exist though, such as more distributed generation and offshore energy development, as I’ll discuss later on in this series. Before discussing possible solutions, however, this series will next look deeper in how the transmission system operates, particularly in the Pacific Northwest, and explore open-access transmission policies, pancaked rates, balancing areas, and more. 

The SunZia Transmission Project Should Facilitate Renewable Energy Development and Bolster National Security

By Amelia Schlusser, Staff Attorney

The southwestern United States is one step closer to constructing a new transmission line that would substantially increase renewable energy development in New Mexico and Arizona. On Saturday, January 24, U.S. Department of the Interior (DOI) Secretary Sally Jewell announced that she has approved a Record of Decision (ROD) from the Bureau of Land Management (BLM) authorizing the SunZia Southwest Transmission project. The SunZia project is a proposed 515-mile transmission line that would transport power from northeast New Mexico to southeast Arizona. According to the project’s proponents, the new line will facilitate substantial renewable energy development in the state. The SunZia line is projected to carry at least 3,000 megawatts of mostly wind- and solar-generated electricity. Secretary Jewell noted that this transmission capacity would provide enough renewable energy to power one million homes while reducing carbon emissions by 4.5 million metric tons per year.

In addition to displacing the emissions from 890,000 cars annually, the transmission line’s construction and renewable energy development would provide much-needed jobs for New Mexico and Arizona. The transmission project is expected to create 6,000 construction jobs and 100 permanent jobs. More significantly, the line will open the door to dramatic renewable energy development with the potential to create 40,000 jobs.

“The SunZia Project will help unlock the abundant renewable energy resources in the Southwest, creating jobs and bringing reliable, sustainable power to a growing corner of our country,” said Secretary Jewell. "It's an opportunity really for the state to make an investment in a future that is not tied to commodity prices, the vagaries of oil and gas prices and the boom-and-bust cycle that is so prevalent in that industry," the Secretary explained to the Associated Press.

The National Security Debate

While the SunZia project has tremendous potential to expand renewable energy development in New Mexico, the project’s proposed route has attracted harsh criticism from U.S. Representative Steve Pearce (R-NM). According to a recent Greenwire article, the Congressman fears that the line will compromise national security. Pearce argued that the project’s route near the White Sands missile range “‘will dramatically impair’ the missile range’s mission ‘to test defense systems critical to the protection of our nation and troops.’”

SunZia’s proposed route does not cross the federal White Sands missile range (WSMR) itself, but it does cross the WSMR’s Northern Extension Area, a network of private land and leased public land that the Department of Defense (DOD) often evacuates prior to conducting missile tests in the WSMR. In response to Army concerns that the high-tower line could disrupt testing and training in the range, the BLM worked closely with the DOD to mitigate the project’s impacts. SunZia’s developers ultimately agreed to bury the power line segments that run through the Northern Expansion Area.

The DOD ultimately did not object to the SunZia project, and Katherine Hammock, the Assistant Secretary of the Army for Installations, Energy and Environment, asserted that the project makes America stronger. “It allows for the more rapid uptake of vital renewable energy, stimulates jobs, and preserves mission capability at White Sands Missile Range, one of the most unique training and testing facilities in the world," said Assistant Secretary Hammock.

However, the DOD/BLM compromise did little to pacify Rep. Pearce, who issued a statement opposing the project the day before Secretary Jewell approved the ROD. “It appears that, with one stroke of a pen, Secretary Jewell will permanently damage our national security,” wrote Pearce.

Pearce’s opposition raises a compelling question regarding the nature of “national security” and the actions we take to protect it. Assuming that Rep. Pearce’s doom-invoking contention is even nominally accurate (which is highly unlikely), the threat that the Congressman fears should be outweighed by the benefits the new transmission line can provide. Which scenario realistically presents a greater threat to the security of our country: one in which federal missile testing is temporarily and moderately restricted, or one in which one million homes continue to rely almost exclusively on fossil fuels for electricity?

Evidence suggests that continued reliance on fossil fuels poses the far greater threat. Last year, the Risky Business Project issued a report on the economic impacts of climate change, which projects that the U.S. will lose billions of dollars in the next 5 to 25 years due to property and infrastructure damage, agricultural losses, and increased energy costs resulting from climate change. In October, the Pentagon released a report warning that climate change presents an immediate threat to national security. Aside from emitting mass quantities of greenhouse gases, fossil fuel power plants contribute to both air and water pollution that threaten human health and damage the natural environment. Our existing, fossil fuel-dependent energy system presents a very real, very substantial threat to our national security. Projects that enable us to transition away from our current system towards a more sustainable energy grid may therefore have a far greater impact on our long-term security than modern weaponry.