If large US companies want to continue to exceed previous utility-scale wind and solar capacity procurement records, they will have to expand the transmission infrastructure pipeline. That is the conclusion of a new report from the Wind Solar Alliance (WSA) which argues that if major renewable energy consumers want to ensure the lowest-cost clean energy is available for their future energy purchases, they need to start participating in the transmission planning processes.
The WSA report is titled “Corporate Renewable Procurement and Transmission Planning: Communicating Demand to RTOs May Yield More Low-cost Options.” It describes how more than 100 US corporate buyers — members of the Renewable Energy Buyers Alliance (REBA) — have set a goal of purchasing 60 gigawatts of new US renewable energy capacity by 2025.
“Companies buying affordable clean energy today are benefiting from yesterday’s transmission plans,” said John Kostyack, executive director of the WSA, which produced the new report. “To meet their sustainability targets for the next decade, and to make low-cost renewable power accessible for themselves and other customers, they need to join efforts to jump-start a new era of transmission planning.”
Through August, 2018, corporates had already procured nearly 4 gigawatts of renewable energy, breaking the previous full-year record set in 2015 by nearly 750 megawatts. But past results don’t begin to satisfy future needs. Corporates will have to procure an average of about 6.5 GW of renewables each year from 2019 through 2025 — all of which is dependent on new renewable energy projects having access to transmission.
However, transmission planning has typically focused on demand growth within a region, rather than the type of generation that corporate purchasers and consumers want. It seems that the Federal Energy Regulatory Commission’s Order 1000 isn’t yielding adequate new interregional transmission lines, either, to meet future goals.
Options for Renewable Energy Action to Offset Transmission Infrastructure Gaps
A Wind Energy Foundation (WEF) report produced earlier this year highlighted how entities responsible for planning the transmission grids are not accounting for corporates’ shifting energy preferences in their planning processes. This gap in planning could preclude corporates from meeting their near-term renewable goals. In the long term, a failure to synchronize and reform the current transmission planning, cost allocation, and permitting processes across grid regions could leave many of the nation’s best remaining wind and solar resources undeveloped.
“Transmission expansion is already falling short of what is needed to meet future corporate demand for wind and solar,” said David Gardiner, President of DGA and co-author of the earlier report. “Large corporate buyers want access to the least expensive wind and solar resources, most of which are located between the Rocky Mountains and the Mississippi River, far from most business operations. We need to step up our efforts to build transmission to deliver cheap, clean wind and solar power to America’s factories, data centers, and stores.”
This newest WSA report expands upon the WEF narrative by providing more critical detail about planning processes that have enabled the recent transmission lines in the best wind and solar resource regions. It also offers further insight into how corporate energy consumers can become more active in shaping the transmission reforms needed to meet their goals, while also assisting in creating a low-carbon energy future. It outlines the types of actions that major buyers of renewable energy can take to make sure renewable power is accessible when they need it.
To that end, the WSA report suggests that one option for corporate consumers is to engage at the Regional Transmission Organization (RTO) level to ensure that their renewable energy demand is captured by the planning process. In addition to RTOs, major renewable energy users might choose to collaborate with transmission planners in other ways, such as paying a utility a “green tariff,” or working together to develop a needed transmission line. Another option is for companies to work together through trade and advocacy organizations to help planners shape the grid.
Recent Successes in Expanding the Transmission Infrastructure Pipeline
In the Electric Reliability Council of Texas (ERCOT) and Southwest Power Pool (SPP) regions, recent transmission expansions and upgrades have delivered benefits that have far exceeded their costs by easing curtailments, keeping electricity prices low for consumers, and spurring economic development. Similarly, the benefits of transmission lines recently completed in the Midcontinent Independent System Operator (MISO) region have exceeded their costs by a ratio of more than 2 to 1 while helping many member states to have cost effective measures to meet their renewable portfolio standards.
Retirements of existing generation affects the transmission infrastructure and compliance with state and federal policies. Changing energy preferences for large energy consumers – which are seen as voluntary and typically acted on via power purchase agreements and increasingly green tariffs – are generally not taken into account. Moreover, while the time required to build a utility-scale wind or solar project is relatively short (often as little as 3-6 months), the higher-voltage transmission lines that are typically required to move power out of the best renewable resource regions typically take a minimum of 5-7 seven years to build.
This discord in development times, combined with the complexity of transmission planning, could leave REBA’s goals unfulfilled, as corporates may not have access to all the renewable projects needed without better planning to incorporate their energy preferences.
Exclusive Comment for CleanTechnica from WSA Report Author
We at CleanTechnica reached out to the author team of the WSA report. We looked at the report as an indication of advocacy for systemic sustainable change, as the report referred to “low- cost renewable resources that enabled corporate consumers to act on their goals and provided all customers in the region with cost savings and a strengthened electricity grid.”
We asked WSA, How can large scale consumers be persuaded to take the initiative to support expanded transmission lines? In essence, what’s in it for the large scale electricity consumers in the long run?
Kevin O’Rourke, director of public affairs and lead author of the report, responded to our inquiry.
“Large-scale electricity customers, and all consumers, benefit from an electricity grid that can deliver the lowest-cost resources to market. It’s particularly important that corporations with renewable energy goals communicate their near-term renewable purchasing plans to transmission planners to ensure there is sufficient transmission capacity available to meet their goals.”
Transmission planning entities in many of the regions with the best wind and solar resources are not holistically considering the significant, near-term renewable energy goals set by corporate consumers. While corporate renewable energy deals have recently surged, that procurement was mostly enabled by recently completed transmission lines. However, while both corporates and consumers benefited from those transmission lines, there are no future transmission builds currently planned on the same scale.
And with 47 GW of renewables procurement needed over the next 7 years to reach the REBA companies’ goal, it remains unclear whether these purchasers will have enough low-cost renewable energy options available when they are ready to act.
“Incorporating corporate renewable energy demand into transmission planning will become increasingly important as more companies act on their goals,” said Hannah Hunt, Deputy Director for Electricity Policy and Demand at the American Wind Energy Association. “Engaging large buyers of renewable energy with transmission planners will be an efficient way to ensure they get the information they need to plan for the future.”