Last week’s Brad Plumer NYTimes article covers a super important issue for the clean energy transition: being able to connect to the grid. It highlights a number of ways in which clean energy projects experience delays. In my tweet thread (and here), I’ll explain WHY we have this problem.
The Utility Transmission Syndicate
One reason we can’t get transmission built for large scale solar and wind projects is that utilities have gamed the planning system to favor their own interests. Ari Peskoe, Director of the Electricity Law Initiative at the Harvard Law School (Environmental and Energy Law program), covers this chapter and verse in his work on the “utility transmission syndicate.” In my podcast interview with Ari, he explained how the federal government, through the Federal Energy Regulatory Commission (FERC), has tried numerous orders and directives to expand transmission capacity to capture new clean energy sources. This decades-long effort has been a nearly impossible task –– transforming a system of utility monopoly fiefdoms into a competitive marketplace. As Ari put it, “What [FERC is] trying to do is counteract the incentives and abilities of utilities to act uncompetitively…The problem is utility control and utility interest in maintaining the status quo. Utilities aren’t, for the most part, inherently against clean energy, but they want to deploy it at the pace and scale that will benefit them.”
In the podcast, Ari offers a few suggestions for how FERC could improve competition and diminish the power of incumbent utilities and transmission companies to slow expansion.
- Transmission planning should be done by a fully independent entity, free of utility influence. All utilities should be required to join these transmission associations.
- Greater information transparency in the utility and transmission planning processes (requiring detailed hosting capacity analysis would be a start).
- In emergency situations (or other circumstances for non-competitive planning), utilities must do more to prove that their plans are reasonable.
Right of First Refusal
One way utilities have persisted despite the efforts of FERC is by using their state lobbyist armies to win back non-compete laws. These so-called “right of first refusal” laws were pushed by utilities after FERC banned the practice of letting utilities own any transmission line crossing their existing service territory. In my discussion with Chris Villarreal of President of Plugged In Strategies, he explains why this undercuts competition and new transmission. Six states have these laws (including Minnesota and Texas). Repealing those laws would encourage competitive development of new transmission to serve clean energy needs, even if it wouldn’t be in the best interest of the incumbent monopoly utility.
Non-Transmission Transmission Capacity
The good news is that we can actually build renewable energy that *expands* transmission capacity if it connects and serves local load, like these innovative wind-solar hybrid projects by Dan Juhl and other local developers. Dan’s innovation was to combine about 1 megawatt of solar with a single, 3 megawatt wind turbine (and sometimes battery storage). The combination has much more consistent electricity production than a single technology power plant, but it also can plug into existing capacity in the sub-transmission system. By being close to and serving local demand, these projects allow more capacity on the high-voltage transmission system.
Community Scale Power Faces Utility Monopoly Power Problems
As great as Dan’s solar-wind hybrid projects are, they still get stalled by incumbent utilities. Frustrated by facing competition at the community scale, utilities game the federal competition law, PURPA, to avoid paying a fair price or signing a contract to buy their power. This article in Governing explains how utilities can mess with project developers to deny them access by making it nearly impossible to get a contract to sell power.
Small Scale Also Suffers From Monopoly Barriers
It’s hard to build and connect utility scale wind and solar or community scale power, but it’s also hard to connect power generation even at the local level. Since private utilities control how their competitors connect to the grid, it results in widely varying costs and timelines for interconnection of rooftop and community solar (and storage) projects. In ILSR’s 2021 Solar Developer Survey, “One solar developer noted that while the required interconnection timeline was under six months, approvals actually took 2-7 years. Another said, “It is definitely the biggest place where it’s just blatant contractual noncompliance.” In our 2022 analysis of available interconnection data, we found widely varying times to get a standard rooftop solar project connected to the grid.
A Big Fix for Local Solar
One pending fix would be to collect better data on the interconnection process. The Solar Energy Industries Association, the Institute for Local Self-Reliance, and others have requested that the federal Energy Information Administration collect standardized data from distribution utilities, as discussed in this interview with Justin Baca from SEIA and David Gahl from the Solar and Storage Industries Institute.
Addressing the Root Cause
Other folks have looked at ways to expedite permitting and approval processes for new transmission (and distribution interconnection), but we’d be better served by targeting the common barrier: for-profit ownership (investor-owned utilities) of a common carrier (the grid). As long as utilities have conflicting interests (a profit motive that comes from owning new power plants, poles, and wires) they will continue to delay or divert clean energy that they don’t control.We got free long distance calling once the feds broke up the AT&T monopoly on telephone wires. Who knows what grid access benefits might come from breaking up the utility #monopoly on electric wires?