United States

United States

Benefits of upgrading US grids far outweigh costs

"Some of our transmission lines are over 100 years old. Think about that -- we're charging iPhones and powering smart TVs with infrastructure built when large portions of the country still didn't have access to the electricity needed for a simple light bulb," said AWEA's Amy Farrell, as the trade body called for greater investment in grids to help reduce bills.

AWEA's Amy Farrell speaks at the Politico Reinventing American Energy event
AWEA's Amy Farrell speaks at the Politico Reinventing American Energy event

The American Wind Energy Association’s (AWEA) new report compiles a number of independent research projects from across the US.

From the studies, AWEA concludes greater investment in the US transmission system would provide savings to the consumer, improve grid reliability and produce a "more competitive economy".

AWEA cited the example of a grid operator in the north-east US that reduced congestion costs on its grid from $600 million a year to less than $100 million following upgrades.

In its recommendations, AWEA said: "Transmission planning should look further into the future, proactively incorporate expected future generation additions and simultaneously account for the multiple benefits of transmission."

"The most important policy solution is broad transmission cost allocation to reflect the broadly distributed benefits of transmission, particularly for high-capacity and interregional transmission," AWEA said in its report.

It also called for greater collaboration between states for interstate transmission lines and "deploy federal authority where necessary for projects that serve the national interest".

Down payment

Speaking at the Reinventing American Energy event, hosted by news outlet Politico and sponsored by AWEA, Amy Farrell, senior vice president of government and public affairs at the lobby group, said the US grid had been neglected.

"We are asking more than ever from our outdated system. America’s loosely connected regional power grids aren’t designed for the needs of a clean, efficient and increasingly electrified modern economy.

"Imagine if the US had a dozen or so separate internets that couldn’t communicate with each other.

"In much the same way, the US electric system is mostly balkanised into regional systems that are insufficiently connected to efficiently and cost-effectively share resources or support each other," Farrell said.

"Large quantities of low-cost US wind and increasingly affordable utility-scale solar resources can’t be harnessed due to inadequate transmission," she added.

Farrell also cited the example of the Southwest Power Pool (SPP) transmission operator, which made $16 billion in gross savings between 2012 and 2014 following grid upgrades. That saving was 3.5 times greater than the investment cost.

"We need the government to remove regulatory barriers blocking that investment and the consumer, economic and public policy benefits that come with it.

"It starts with Department of Energy designating corridors, [and] with the Federal Energy Regulatory Commission (FERC) providing the critical role of using its backstop siting authority in such areas if transmission siting is becoming an impediment.

"We all seem to agree on the challenge. We have an obvious solution and billions in private investment ready to invest. We don’t have to wait—let’s make a smart down payment on our future by updating and expanding America’s electric grid," Farrell concluded.

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