Could 2024 be a breakout year for the transmission grid?

Canary Media’s Down to the Wire column tackles the more complicated challenges of decarbonizing our energy systems.

It’s hard to solve a challenge as sprawling and complex as doubling or tripling the scale of the transmission grids across the U.S. in a little over a decade. But the country’s climate and clean energy goals depend on it.

Study after study has found the country can’t build renewable energy at the pace needed to rapidly decarbonize the power grid without also building a massive amount of new power lines, fast. But over the past half-decade, grid growth has slowed, not accelerated, bogged down by conflicts over siting, permitting and paying for new transmission capacity.

The sheer scale of growth needed is staggering. Achieving the Biden administration’s goal of a zero-carbon grid by 2035 will require 75,000 miles of new high-voltage lines — enough to stretch from Los Angeles to New York City and back 15 times — according to an estimate from Princeton University’s Repeat Project. 

While some high-profile, large-scale transmission lines and significant regional grid expansions launched in the past few years, grid experts warn they’re still far from enough to get the country on track to meet federal or state clean-energy goals. And that’s not counting the need for more power lines to make the grid more resilient against extreme weather and to meet the needs of a growing and increasingly electric-powered economy.

In all likelihood, federal action will be needed to get the U.S. power line buildout moving at the pace required to shift the country away from fossil fuels.

But despite a push by the Biden administration and Democrats in Congress to revamp federal policies to unlock transmission growth, 2023 saw only limited progress on that front, said Rob Gramlich, president of consultancy Grid Strategies. ​“There are a lot of bills and a lot of proposed rules flying around. But not so many laws or final rules.”

Meanwhile, ​“the level of actual committed investments for large, long-distance transmission is very small relative to the need,” he said. ​“While the attention is at a high level, and that’s great and probably necessary, it’s not sufficient. Talk does not do the job. We need action.”

That sets the stage for 2024 to be a potentially make-or-break year for policymakers and regulators, utilities and grid operators, and clean-energy and grid-reliability advocates to push major grid reforms through. Here’s an overview of what’s been accomplished — and how much remains to be done.

The wins on the table 

To be sure, the past two years have seen some significant advances for transmission grids that had been stuck in the doldrums for the past decade. After years of gridlock, several of the country’s biggest grid operators, utilities and competitive transmission developers launched large-scale — if not large enough — grid expansions.

In 2022, the Midcontinent Independent System Operator, which operates the transmission grid in all or part of 15 U.S. states and Canada’s Manitoba province, approved $10.3 billion in transmission projects expected to enable 53 gigawatts of clean energy development, and New York grid operator NYISO approved $8.2 billion in transmission projects that will carry gigawatts of wind, solar and hydropower from Canada and upstate New York to the New York City metropolitan area. And in 2023, California grid operator CAISO finalized a $7.3 billion transmission plan expected to enable 17 gigawatts of solar, 8 gigawatts of wind power and 1 gigawatt of geothermal power.

Utilities outside of the country’s regional grid operators have also been expanding transmission, including Xcel Energy in Colorado, NV Energy in Nevada and PacifiCorp across its Rocky Mountain and Pacific Northwest territory.

Along with these transmission projects, which are paid for by utility customers as additional charges on their bills, large-scale ​“merchant transmission” projects from independent developers have also won key approvals. The biggest include the $3 billion TransWest Express line from Wyoming to California, the $5 billion SunZia Southwest project from New Mexico to Arizona and the $7 billion Grain Belt Express from Kansas to Illinois.

While a host of long-pursued federal transmission policy reforms did not materialize in 2023, federal transmission funding from 2021’s Bipartisan Infrastructure Law did start to come into play. In October, the Department of Energy offered $1.3 billion to three transmission projects, the first of what could be a revolving set of loans to help long-range power lines bridge the gap between securing customers for their power and obtaining financing to get built.

DOE also issued $3.5 billion in grid grants in October that included hundreds of millions of dollars for transmission grids across the country. The largest of them will provide $464 million, which along with $1.3 billion from utility members of the Midcontinent Independent System Operator and neighboring grid operator Southwest Power Pool, will help build power lines that connect the two regions.

That project is one of the biggest efforts in the country ​“to break the interregional logjam” between different grid regions, Colin Meehan, a project manager with DOE’s Grid Deployment Office, said during a webinar announcing the grants.

These kinds of interregional transmission-capacity projects can expand the routes for clean power to move from where it’s generated to where it’s needed — the Midcontinent Independent System Operator–Southwest Power Pool project is expected to enable as much as 30 gigawatts of new renewable energy.

They can also make the grid ​“bigger than the weather,” allowing regions undergoing winter storms or summer heat waves to tap power available in other parts of the country that aren’t as hard-pressed by extreme conditions.

Underlying this recent shift are the immense clean-energy and climate incentives unlocked by 2022’s Inflation Reduction Act. ​“Once the federal government came in and started talking about decarbonization goals and electrifying transportation and buildings, that was a first step,” said Paul DeCotis, a senior partner at consultancy West Monroe. ​“But it didn’t really take off until the federal government started putting up funding.”

The clean energy incentives from the Inflation Reduction Act have spurred the potential for building enough solar and wind power to significantly drive down power-sector emissions. A report in Science that analyzed nine independent studies concluded that, thanks to the law, the country is poised to cut grid emissions by an average of 70 percent by 2030 compared to 2005 levels.

But roughly 80 percent of the emissions-reduction potential of the law will fail to materialize if the transmission grid expansion stays at its recent rate of roughly 1 percent per year, according to a 2022 report from Princeton University’s Repeat Project. To make room for all the clean energy needed to hit the law’s full carbon-cutting potential, the pace of transmission growth must more than double, the report concludes.

In a September report commissioned by trade group Americans for a Clean Energy Grid, Grid Strategies tallied 36 high-voltage transmission projects primed to start construction across the country in the near future — 14 more than it identified in a similar report in 2021 — and estimated they will enable 187 gigawatts of new renewable energy capacity. Still, that represents less than 10 percent of the new transmission capacity needed to reach a zero-carbon grid.

The long odds for transmission reform in Congress

State utility regulators and regional grid operators are the key arbiters of whether new power lines get built. The federal government, meanwhile, has few levers to directly spur new transmission projects — at least under current law and regulatory structures. That’s why so many pro-transmission groups have been lobbying hard for a host of bills being proposed by Democrats in Congress that would expand federal authority over transmission.

Reforms passed by Congress this summer have given federal agencies the authority to streamline permitting for energy projects undergoing federal review. But the bill did not include deeper changes to help overcome hurdles for transmission projects beyond federal permitting and environmental review.

Those include winning permits, negotiating land-use agreements and surmounting legal challenges from state and local government, private landowners and environmental groups along the entire length of a project. They also include reaching a consensus among multiple utilities and state regulators over how to share the costs of new projects between them.

A package of transmission reforms proposed by congressional Democrats in early December would provide the Energy Department and the Federal Energy Regulatory Commission, which regulates interstate electricity systems, far more authority to overcome these challenges.

“What would an energy policy look like that prioritized the interests of U.S. energy consumers over the interests of U.S. energy producers?” U.S. Rep. Sean Casten (D) of Illinois, a co-author of the bill, said to Canary Media in a December interview. ​“The fulcrum for that is transmission because that opens up markets.”

But the odds are slim of major transmission-permitting reform being passed in a bitterly divided Congress during an election year. A recent quote from Senator John Barrasso, the Wyoming Republican who serves as ranking member on the Senate Energy and Natural Resources Committee, from E&E News summarized the impasse: ​“The administration’s focus is only renewable, and that is a no-starter for us.”

Casten acknowledged the uphill climb federal transmission reforms face. ​“The idea that we should use transmission to link markets, to make sure that consumers have choices, has become really partisan because it’s a threat to the interest of fossil fuel producers who cannot compete against clean energy,” he said.

Given this political impasse, pro-transmission groups have increasingly focused on actions the Biden administration can take without new laws.

“We do agree that legislation in Congress is essential in building out a national grid and deploying clean energy at the speed and scale we need,” said Charles Harper, senior power sector policy lead for nonprofit advocacy group Evergreen Action. ​“But in this Congress, compromise with climate deniers in this House will tie up all those necessary reforms to transmission with unacceptable giveaways to the oil and gas industries, which will increase emissions.”

That’s why Harper co-authored a December report that details a ​“laundry list of all the things that federal agencies, and state agencies and legislators, can do to speed up the transmission grid we need,” he said.

Waiting for the Federal Energy Regulatory Commission

The first task on that list applies to FERC. But while FERC holds sole authority over permitting fossil gas pipelines, it lacks that authority when it comes to permitting transmission lines, which remain largely under the control of state agencies.

FERC does have significant power over regional grid operators’ transmission planning, however. The agency has been working since mid-2022 on proposed rules that would require regional grid operators to undertake long-term transmission plans that incorporate federal, state and local clean-energy policies, growing power demand from electric vehicles and building heating systems, and ​“high-impact, low-frequency events such as extreme weather.”

“The single most important policy we see is the transmission-planning rule at FERC, which we’re hopeful will be able to pass in the new year,” Harper said.

Whether the final rules that emerge from FERC will catalyze significant change is unclear. Right now, FERC has four commissioners, two of them Republicans and two of them Democrats. While the Democrats have been vocal supporters of transmission reforms, the Republicans have balked at the idea of using FERC’s authority in ways that might weaken state power over transmission decisions. In an October letter to FERC, 17 Republican attorneys general accused it of overreach in crafting the proposed rule and threatened to challenge it in court.

But regional grid operators need a clearer assertion of federal authority like that which a strong FERC rule would provide to overcome the inertia that can lead to inadequate transmission plans, Gramlich said. Grid operators and utilities work from conservative assumptions about clean energy and electricity demand growth, despite all signs pointing to an unprecedented surge for both. Regulators and consumer advocates oppose plans that run the risk of burdening customers with excessive bill increases. The long-term benefits of grid projects are often discounted against the near-term costs of building them. And too often, larger-scale grid expansions succumb to fights between the utilities and states within regions over which will bear what share of those costs.

Much may depend on the political makeup of FERC in 2024. The Biden administration has yet to propose a replacement for FERC’s open fifth seat, which has been empty since the January 2023 departure of Richard Glick, the FERC chair who introduced the long-term transmission rule. Glick’s reconfirmation hearing was blocked by Senator Joe Manchin, the West Virginia Democrat who’s been a linchpin decision-maker on federal energy policy, over conflicts related to natural-gas pipeline policy.

Meanwhile, James Danly, a Republican appointed by the Trump administration who has been most vocal in opposition to strong federal transmission-planning reform, officially ended his FERC term this summer and must vacate his seat unless he is renominated and approved by the Senate before January.

If Danly departs and Glick’s seat remains empty due to lack of action from the Biden administration and Congress, FERC would be reduced to three members: current FERC chair Willie Phillips and Allison Clements, two Democrats who have supported transmission reforms, and Mark Christie, a Republican seen as a champion of state authority in transmission planning.

Whether Phillips and Clements would choose to push ahead with a transmission-planning rule that Christie opposes or to seek a compromise that can win his vote will dictate the scope of reforms that end up being ordered by FERC, Gramlich noted.

“FERC can make sure that people do both legitimate, real load forecasting and legitimate, real planning for future generation,” he said. ​“FERC’s authority to require those planning methods is really strong. I hope and expect they’ll do that in their final rule.”

FERC did issue a broad set of interconnection reforms in 2023 that could help ease the backlog of solar, wind and battery projects awaiting permission to connect to transmission grids. But the primary cause of the yearslong backlogs and spiraling grid-upgrade costs for the hundreds of gigawatts’ worth of clean energy projects languishing in interconnection queues is the lack of adequate transmission capacity, grid experts agree. That means interconnection reform is addressing a symptom of the problem — not the root cause, said Mike Jacobs, senior energy analyst at the Union of Concerned Scientists.

Current interconnection policies are ​“set on the presumption that there wouldn’t be nearly so much transmission needed and the power plant additions would be vastly fewer than what we have,” he said. ​“It’s a setup that was not created for large volume. And all the reforms we’ve talked about that have moved so far have been marginal tweaks.”

National interest vs. local control: The fraught path for federal transmission siting

More options to expand federal authority over transmission siting and permitting are on the table — but they too are fraught with potential conflict with state regulators, utilities and all the parties that might seek to oppose new transmission projects.

One of the most closely watched policies for pro-transmission groups is the Department of Energy’s authority to designate National Interest Electric Transmission Corridors, or NIETCs — areas where DOE can determine that grid-capacity constraints or congestion are causing harm to consumers or threatening national security. Provisions from 2021’s Bipartisan Infrastructure Law expanded the scope of this decades-old but never-used authority, giving DOE and FERC an opening to essentially use the federal government’s eminent domain power to ram projects through.

Just how DOE and FERC might put this authority to use remains a work in progress. In October, DOE released a long-awaited National Transmission Needs Study, which reinforced past studies in finding that the country must roughly double its existing transmission capacity to improve reliability and serve rising electricity demand.

And in December, DOE issued final guidance on its plans for its NIETC designation process, which will ​“enable DOE to independently identify narrow areas in the country where transmission development is urgently needed and to work with affected states, tribes, local communities, and industry to accelerate the development of transmission projects in those areas.”

FERC also plays a role in this process, with power to use ​“backstop siting” authority to overrule state opposition to transmission projects along certain routes. But since a technical workshop on the issue in December 2022, FERC has not made clear how quickly it plans to make changes to that process or how it might end up supporting DOE’s use of NIETC authority.

Nor should federal authority run roughshod over communities that will be affected by major transmission projects, Evergreen Action’s Harper stressed. ​“We need more efficient and effective permitting processes. But we also need to prioritize equity. The federal government has a lot of steps it can take to advance procedural justice and afford affected communities a voice in the process.”

That’s not just fairer to communities, he said — it’s also a more efficient way to get projects completed. Leaving affected communities out of the early stages of transmission planning ​“will likely lead to more backlash down the road and slow things in the long run.”

State policy — and state conflicts

State lawmakers and regulators also have a vital role to play in reforming transmission within their own borders, Harper noted. Each state faces a microcosm of the same conflicts over permitting and cost-sharing for transmission that complicate federal transmission reform.

Jacobs highlighted the disconnect within states that have mandated aggressive renewable portfolio standards (RPSs) and clean energy targets without taking on transmission reform. ​“The states pass an RPS law, and everybody does the signing of the legislation and [then] go back to what they were doing,” he said. ​“But all the grid stuff has to happen to make those RPS goals viable. So now we’re seeing, little by little, those pro-clean[-energy] states do pro-transmission things to support it.”

Many states are also embroiled in legal disputes over ​“right of first refusal” laws that have held back independent developers from competing against incumbent utilities for the right to build new transmission lines, which has further complicated state-by-state transmission policy. This issue is also at play in FERC’s pending long-term transmission rule, which may give incumbent utilities that jointly develop projects with other transmission owners the right to build transmission projects without competition.

Conflicts between states within the territories of regional grid operators can also stymie progress on transmission reform, Jacobs noted. PJM, the grid operator encompassing all or part of 13 states from Illinois to Virginia, has one of the most heavily backed-up interconnection queues in the country, to the point that it is threatening to prevent many of its constituent states from meeting their clean energy goals. At the same time, PJM’s footprint includes Republican-controlled states like Ohio and West Virginia that can stall regional grid-planning reforms, he said.

The lack of more comprehensive and forward-looking planning can lead to reactive, piecemeal transmission projects, Jacobs added. Last month, PJM approved $5 billion in transmission projects in response to the rapidly growing demand for electricity from data centers in Virginia and Maryland combined with the pending closure of coal-fired power plants in Maryland.

But PJM’s current transmission-planning structures often fail to consider power plant closures that are likely further into the future, he said. Other regional grid operators such as the Midcontinent Independent System Operator have worked out policies that take long-term resource-mix changes into account, he said — and PJM is now embarking on its own plans for reform, although they’re expected to take at least two years before being put into effect. 

Tech to do more with the grid we already have 

Another set of solutions could come from a set of ​“grid-enhancing technologies” that can help expand the capacity of the transmission networks that already exist. These technologies can’t replace new power lines — but grid experts say they could significantly reduce the amount of construction needed.

FERC’s 2023 interconnection order requires grid operators and utilities to include the use of technologies to allow new clean-energy projects to mitigate their potential impacts on the existing grid — and thus to reduce the costs of upgrading the grid to allow their power to flow safely.

The agency’s pending long-term transmission-planning rule is expected to also include a requirement for grid operators and utilities to build these kinds of technologies into their future plans. And according to experts, these technologies could help minimize the challenges of building new transmission lines.

DOE officials outlined this potential in a December webinar previewing an upcoming report on grid-enhancing technologies. Dynamic line-rating systems, which use sensors to determine when temperature and wind conditions can power lines to carry more electricity than their conservative ​“static” ratings would indicate, ​“can increase effective capacity by an average of 10 to 30 percent over 90 percent of the time,” Eshaan Agrawal, a market analyst at DOE’s Office of Technology Transitions, noted. And higher-capacity transmission wires and high-voltage direct-current lines can significantly expand the capacity of existing transmission corridors, reducing the number of new lines that must go through siting and permitting.

Experts agree that these technologies can reduce the total capital expenses of building new transmission lines. But today, U.S. utilities earn more money from large capital investments, which offer them guaranteed rates of return collected via increases to customers’ bills, than they do for spending on technologies that reduce the need for those capital investments. In other words, the incentives aren’t exactly aligned.

Still, the scale of the grid buildout that’s needed over the coming decade is forcing utilities and regulators to focus on finding ways to push these technologies into broader use. DOE took a first step in October with the aforementioned $3.5 billion in grid grants that included several projects using these technologies. FERC’s forthcoming long-term transmission-planning rule could further cement their use in future grid investments.

Hannes Pfeifenberger, a grid-planning expert and principal with The Brattle Group consultancy who’s conducted multiple studies on the potential of these technologies, believes that they could help achieve up to two-thirds of the transmission grid expansion needed over the coming decades. While plenty of new lines must still be built, upgrades to existing lines using advanced conductors and high-voltage direct-current lines could make up roughly one-third of the expansion required, he wrote in a recent LinkedIn post.

Another third could come from ​“innovative grid operations” using technologies including dynamic line rating, power-flow control systems and advanced grid software that can increase grid capacity by 30 to 40 percent, both for existing and newly built power lines, he wrote.

But as Pfeifenberger put it, ​“The question is: Are U.S. grid planners and operators ready to embrace the last two-thirds?”