Idea #15

Solving Climate Change Through a Grid Infrastructure Overhaul

by Daniel E. Walters

Many politicians want the United States to commit to a fully renewable energy transition, and with good reason—the price of renewable energy is plummeting, and it is possible for the first time to envision a zero-emissions electricity sector that actually saves money. The math seems simple, even for those who do not believe mitigating climate change is a moral imperative.

But grid managers and utilities are less sanguine about a wholesale transition to renewable energy than price signals alone would suggest. This is because, when consumers turn on their light switches at home, they expect the lights to turn on whether or not the wind is blowing or the sun is shining. It’s not an unreasonable expectation, but it does present challenges for the transition to an electricity generation portfolio based on utility-scale renewable energy, like solar and wind. These resources are, indeed, renewable and increasingly cheap, but they are also intermittent in that the wind has to be blowing and the sun shining for these technologies to produce energy on demand, seemingly making them bad candidates to replace the regional baseload generation fleets—coal and nuclear power plants—that provide power whenever called upon. Grid managers and utilities worry about tilting the scale too far in the renewable energy direction, lest they create reliability problems on the grid. The result is that, at present, renewables are unable to meet their full potential.

The problem of intermittent electricity is not as intractable as it might seem. First, renewable technologies like solar and wind may be inherently intermittent, but they are not uniformly intermittent. Certain parts of the country—namely the Great Plains and the Mountain West—have meteorological conditions that allow more constant use of solar and wind installations, and they are ripe for massive-scale renewable energy development. Second, the United States is a big country, and while some renewable resources might be off line due to weather conditions at any given time, chances are that there are other resources in other regions that have excess capacity at the same time. Finally, it is increasingly cost-effective to couple renewable projects with energy storage installations that allow renewable generators to arbitrage operations to maximize efficiency and hold energy until there is demand somewhere. Together, these three factors give the United States the potential to make renewable electricity a more on-demand resource.

The intermittency problem is a relic of our historically parochial approach to grid architecture, not an indomitable physical limitation of the technology. Acting as a whole country, we have the capacity to move clean, renewable electricity from where and when it is available to where and when it is needed. The challenges to this vision are political and legal ones: Can the country muster the political will and the legal authority to invest in an electricity infrastructure overhaul? It sounds like a tall order, but there are a number of concrete steps that could be taken that could start the process.

First, siting renewable installations where they can do the most good means we must overcome the fact that these locations tend to be isolated, meaning the existing web of low-voltage, congested, and regionalized transmission grids does not reach them. While entrepreneurial private companies like Clean Line Energy Partners have attempted to solve this problem by developing select high-voltage direct current (HVDC) transmission lines from the Great Plains to the heart of the Eastern Interconnection, progress was fatally slowed by regulatory permitting hurdles and inter jurisdictional conflicts. In this case,“pass over” states were all too willing to use their transmission siting authority to veto such projects and the federal government hesitated to use its limited existing statutory authority to override those vetoes and grant private companies eminent domain authority to secure land on which to build the lines. Congress has the authority to clear these regulatory barriers and end parochialism, clearing the way for private development of energy pipelines to the most reliable renewable resources at little cost to the public.

Hearkening back to the creation of the interstate highway system, the federal government itself could even develop a high-voltage public interstate transmission grid to relieve congestion and improve efficiency on the disjointed and archaic regional grids. One study from 2016 found that such an electricity superhighway could bring the United States to 80 percent of 1990 CO2 emissions levels by 2030 by opening up markets for renewable energy all across the country. To be sure, such a project would likely cost over $5 trillion up front, although that’s likely to cost out quickly as greater efficiencies push the price of energy lower. And compared to the costs of adapting to the climate change that the project could help avoid, the price tag is a pittance.

Finally, some of the costs of building out transmission lines to meet renewable resources where they are located could be eliminated by aggressive investment in energy storage technology.  Storage allows grid managers to address the “Duck Curve” associated with renewables—i.e., the imbalances of demand and supply as renewables come online and go off line through peak hours—by smoothing production and supply. Moreover, the more energy storage capacity that is rolled out, the less need there will be to site renewable projects in remote areas. After all, the sun even shines in Seattle sometimes. Certain forms of energy storage, such as “pumped hydro” storage, are already deployed widely, but recent advances in battery technology suggest enormous growth potential for storage. Four-hour battery storage has recently become more cost-effective and a wave of grid-scale projects have been announced. To make a major impact, there would need to be longer-term storage capacity, but the technology seems to be increasingly within reach.

To help foster the development of long-term, grid-scale battery storage, the federal government should continue, but also bolster, its multi-faceted approach to encouraging storage innovation. The Federal Energy Regulatory Commission (FERC) took an important step by requiring grid managers to ensure that storage operators are able to bid stored energy into energy markets just like any other generator, and it must ensure that grid operators take this mandate seriously. Likewise, a raft of existing bipartisan legislative proposals to fund research and development of storage should be passed.

Most importantly, however, policymakers need to pursue all of these avenues at once. Private-sector investors and developers in renewables, transmission, and storage need credible commitments that markets will exist at the end of the road; otherwise they will not take the actions that are in their private interests and society’s collective interests. There is a chicken-and-egg aspect to the factors most holding back an overhaul of the grid. The federal government needs to triangulate approaches and focus on generating an environment where investment and innovation in a renewable transition are encouraged and not stymied by fear of whether investment in other interlinked domains will continue.

Investing in infrastructure is politically popular, and Americans have rallied around that cause time and again over the last century. If we do it right in the energy context, the pieces are in place for a game-changing penetration of renewable electricity that could well avert climate disaster.

Daniel E. Walters is Assistant Professor of Law and Political Science at Pennsylvania State University and a Former Regulation Fellow at the University of Pennsylvania Law School