Three Steps to Modernize America's Electric Grid and Unlock the Green Energy Economy
America faces many energy-related challenges going forward, but none is more important than the need to modernize the U.S. electric grid—but right now the permitting process for building out and strengthening America’s power grid is not set up for success. Talk to just about anyone in the energy sector and you’ll hear about projects that have sat waiting for months—and in many cases, years—in America’s transmission grid interconnection queue. In fact, according to the Decarbonization Channel, the U.S. currently has 2 million MW of clean energy capacity sitting on hold, awaiting connection to the electric grid.
COMMENTARY
That’s 2 million MW of clean energy projects that will address the dire need for more generation online to ensure the lights stay on, support lower electricity bills for consumers, stimulate local economies, and create 1.5 million jobs enabled by the passage of the Inflation Reduction Act (IRA). All the while, these projects are stuck, with investors floating the cost caused by construction delays.
Case in Point: Indiana
The experiences of EDP Renewables North America (EDPR NA), which develops and operates renewable energy systems, is a case in point. The five projects EDP operates in Indiana deliver clean energy to more than 372,000 households, bringing $3.5 billion in capital investment, $110 million in landowner payments, $30 million in local government revenues, and more than 180 permanent jobs to the communities where they operate. [caption id="attachment_217535" align="alignleft" width="208"]
Sandhya Ganapathy[/caption] But getting clean energy benefits to customers has been anything but swift with delays up to nearly four years. With EDPR NA alone having more than 50 utility-scale and a dozen distributed generation-scale projects underway in the region, continued inaction delays decarbonization goals, economic benefits, and resources adequacy concerns to the communities where these projects will operate.
Three Strategies for Success
Clearly, that status quo isn’t working. America needs to build out a modernized transmission grid. To get moving in the right direction, here are three ways to make progress. Legislative Action: We strongly advocate for quick passage of pending federal legislation, such as the Big Wires Act introduced by Sen. John Hickenlooper of Colorado, and Rep. Scott Peters of California, to address the planning, permitting, and interconnection issues at the heart of electric transmission concerns. The Big Wires Act directs the Federal Energy Regulatory Commission (FERC) to coordinate the construction of an interregional transmission system to speed interconnection and create a more resilient grid to survive extreme weather events. Regional Collaboration and Regulatory Reform: FERC reform can also help collaborative efforts by requiring transmission planners to consider multiple scenarios with 20-year, forward-looking views of the benefits of transmission, ensuring a more streamlined and proactive approach to grid expansion. FERC needs to finalize its transmission planning rule. In parallel, the FERC and regional grid operators should work together to support deployment of available tools to relieve grid congestion and save Americans money. Grid-enhancing technologies, or GETs, are available today and use advanced sensors and software to provide the equivalent of an energy efficiency upgrade of the grid, creating additional capacity on existing grid infrastructure at minimal cost. [caption id="attachment_217534" align="alignright" width="238"]
Susan Nickey[/caption] Permitting Reform: Streamlined state, local and federal permitting that responsibly encourages economic growth is critical to realize more than $3 trillion in clean energy investments over the next decade, as noted by the American Clean Power Association (ACP). ACP worked with its members to create a framework of commonsense reforms that could unlock clean energy without jeopardizing our bedrock environmental laws. For example, measures to impose time limits and enhance interagency coordination on environmental reviews would cut down a permitting process for renewable energy projects that can currently take a decade or more.
Building on a Strong Foundation
Fortunately, we have a strong foundation to build on. The Inflation Reduction Act (IRA) was an unprecedented shot in the arm for clean energy investments, skilled job creation, and domestic manufacturing. The ACP reports nearly $350 billion has been invested in U.S. utility-scale clean energy projects, including 100 new or expanded manufacturing facilities, since the law was passed in August 2022. Those wind, solar, and storage investments will support 40,000 jobs and create 234,000 MW of new clean energy capacity—the equivalent of hundreds of conventional power plants. However, unlocking the IRA’s full potential and connecting this new clean energy to our communities will require significant investments in America’s electric grid superhighways—the U.S. transmission grid. In closing, we must unite to modernize our U.S. transmission grid to create clean energy jobs, contribute sizable tax revenues, and provide carbon reductions. Modernizing and expanding our grid is critical to realizing the full benefits of the IRA and ensuring the benefits of low-cost clean energy reach consumers and enhancing grid reliability and resilience. The sooner these bottlenecked projects can produce clean electricity, the better the outcomes for the next generation and beyond. —Sandhya Ganapathy is CEO of EDP Renewables North America. Susan Nickey is chair of the American Clean Power Association and Chief Client Officer for HASI, a climate solutions investment company.
