FOR STIMULUS – HOW ABOUT NEW TRANSMISSION FOR NEW ENERGY?

For economic stimulus, how about an ambitious infrastructure project? How about an energy superhighway system ready to carry all the New Energy the nation’s entrepreneurs, now unleashed by the extension of investment and production tax credits, can build?

Integrating Locationally-Constrained Resources Into Transmission Systems: A Survey Of U.S. Practices, a new report from Working Group for Investment in Reliable and Economic Electric Systems (WIRES) sets the stage for just such an ambitious project.

From the report’s preface: “The Report we issue today is not a policy paper, strictly speaking…It is instead a thorough exposition of the methods currently employed by various states, industry, and investors to integrate these locationally-constrained resources into the electric grid. This Report is a first-of-its-kind survey of these practices for the benefit of policy makers, stakeholders, and the power industry itself…”

The WIRES report is exactly the information those policy makers, stakeholders, and the power industry people will need.

From the report’s preface: “WIRES therefore highlights four areas where we perceive that current practices are or can be made “best” or most effective: A) regional transmission planning, B) aggregating energy resources with characteristically variable outputs over broad balancing areas, C) using optimal methods of allocating and recovering costs, and D) reforming the “queues” of proposed projects to accelerate development. However, we acknowledge that, because the industry is in transition, any estimate of what is “best” today should be reassessed in light of performance and what technology permits us to achieve in the future.”

One of the most important undertakings of Franklin D. Roosevelt’s New Deal was the Rural Electrification Administration (REA). It brought thousands of jobs to the rural hungry and lifted almost a third of the U.S. rural population out of the dim light of wood fires and kerosene, out of forgotten loneliness, into the brightness of electric lighting and the connectedness of the radio and telephone.

Now a $60 billion investment is needed to clean up that REA electricity by bringing the fresh air of New Energy from all those rural regions onto the nation’s grid. It's a small price to pay and there will be a big payoff in jobs, efficient infrastructure, avoided power outages and delivery of emissions-free energy.

A massive $60 billion new transmission system will be needed. (click to enlarge)

Shift to Renewable Power Generation Demands New Approaches to Transmission Challenges
Brent Gilroy, October 20, 2008 (Wires)

WHO
Working Group for Investment in Reliable and Economic Electric Systems (WIRES) (Will Kaul, President; Paul McCoy, Vice President and principal report supervisor); Key players in transmission (utilities, regulators, policymakers); CRA International

WHAT
Integrating Locationally-Constrained Resources Into Transmission Systems: A Survey Of U.S. Practices evaluates the U.S. transmission system for its readiness to integrate and deliver New Energy.

click to enlarge

WHEN
The report is a first-of-its-kind survey of practices needed to integrate New Energy into the transmission system.

WHERE
- New Energy production is “locationallyconstrained” (in remote areas where transmission is inadequate)
- CRA International, the report’s preparer, is based in Boston.

WHY
- The report calls for commitment from key players to develop infrastructure and new rules for needed transmission.
- The report identifies the most effective technical, commercial, and regulatory practices needed.
- The 5 specific areas of the report’s focus: (1) investment priorities, (2) planning, (3) operational and regulator accommodations, (4) rate recovery strategies and (5) necessary incentives and tax policies.
- Ongoing positive developments in U.S. transmission system:
(1) Regional and cross-utility collaboration with new planning tools (examples: transmission infrastructure authorities, renewable enterprise zones);
(2) Transmission marketplace regulation designed to address technical (example: relaxation of costly scheduling/imbalance charges for intermittent New Energies);
(3) Allowances for recovery of investment in new transmission to connect New Energies;
(4) Federal and state government-funded incentives, including tax breaks for development of New Energies and transmission to it.

The complexity of the many individual systems and individual regulatory schemes must be streamlined. (click to enlarge)

QUOTES
- Will Kaul, President, WIRES: “Our national transmission system’s key challenges include interconnecting and operationally integrating the clean and often volatile generation resources needed to comply with potential climate change legislation and renewable portfolio standards…The amount of power provided today by wind, solar and other clean resources is relatively small compared with what eventually must come on line to drastically reduce carbon emissions. We must link these resources...to large population centers that demand cleaner electricity…”
- Paul McCoy, Vice President, WIRES and principal report supervisor: “The wind doesn’t always blow; the sun doesn’t always shine. But we can harness these resources for the public good as a valuable part of the generation mix if we invest in additional transmission facilities…We need major strengthening and expansion of the existing grid…We hope this analysis will awaken policymakers to the difficulties the industry is addressing...”