New Analysis Reveals How Transmission Planning and Cost Allocation Processes Are Inhibiting Wind and Solar Development

New Analysis Reveals How Transmission Planning and Cost Allocation Processes Are Inhibiting Wind and Solar Development

March 25, 2021

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New Analysis Reveals How Transmission Planning and Cost Allocation Processes Are Inhibiting Wind and Solar Development

WASHINGTON, D.C. — A comprehensive review released today of regional and interregional transmission planning in the Great Plains, Midwest, and Mid-Atlantic shows how the current processes in and between regional transmission organizations (RTOs) are impeding the development of low-cost renewable power.

The analysis from Concentric Energy Advisors, commissioned by the American Council on Renewable Energy (ACORE) as part of the Macro Grid Initiative in coordination with the American Clean Power Association and the Solar Energy Industries Association, identifies the primary deficiencies and potential solutions for greater renewable deployment in the Southwest Power Pool (SPP), Midcontinent Independent System Operator (MISO), and the PJM Interconnection (PJM).

“America’s transmission system is in need of a 21st century makeover if we’re going to have any shot at achieving the level of renewable deployment necessary to address our climate challenge,” said ACORE President and CEO Gregory Wetstone. “The current transmission planning processes in these regions are not working to deliver the affordable clean energy that states, businesses and consumers are demanding.”

Based on a series of interviews with key market participants and stakeholders in SPP, MISO, and PJM, the report concludes:

  1. “Centrally coordinated” planning at the interregional and RTO levels is needed to identify the geographic areas where untapped renewable energy resources exist and develop optimal and cost-efficient paths for transmission infrastructure development to deliver low-cost renewable resources to load centers.
  2. Interregional transmission planning should rely on either a unified national interregional planning model or regional models that have sufficiently aligned planning objectives, assumptions, benefit metrics, and cost allocation methodologies to properly assess benefits and costs of interregional transmission projects.
  3. Reasonable expectations of renewable resource expansion should be integrated into “Futures” assumptions in transmission planning studies. This should include reasonable forecasts for future storage, renewables, and gas generation additions, as well as fossil fuel plant retirements.
  4. Benefit metrics used to assess the comparable benefit of projects relative to their costs should be expanded and standardized across regions to the extent possible.
  5. Planning models and/or processes should better reflect the expected real-time operations and economic dispatch of generation resources.
  6. Competitive processes would benefit from more coordinated planning where resource zones are identified, and infrastructure solutions that address optimal paths to market are solicited.
  7. Cost allocation for generator interconnection upgrades should be shared with load or other interconnecting generators based on a fair allocation of benefits.

“The report identifies areas where transmission planning processes in SPP, MISO, and PJM could be upgraded to better integrate the significant amount of wind, solar, and battery storage projects under development,” said Julie Lieberman, Senior Project Manager, Concentric Energy Advisors and lead author of the report. “Our interview subjects were nearly unanimous in expressing the view that more centrally coordinated regional planning, and improved interregional planning, would help identify and implement transmission solutions that allow more low-cost renewable resources to come online.”

To download the new analysis, How Transmission Planning and Cost Allocation Processes are Inhibiting Wind and Solar Development in SPP, MISO and PJM, click here.


Additional Quotes on the Report Findings:

 “This report outlines best practice transmission planning that some of the RTOs are beginning to adopt. We hope states and stakeholders in these regions support larger regional and interregional planning following these recommended practices.” – Rob Gramlich, Executive Director, Americans for a Clean Energy Grid

 “Transmission development may not sound exciting, but it is absolutely essential to an affordable, reliable, and clean electric system. The U.S. has long lagged behind in updating our grid to the needs of the 21st century, to the detriment of everyday electric consumers. American homes and businesses will win if we modernize our electricity transmission system by coming together to improve the planning and permitting process for these needed grid improvements.” – Heather Zichal, CEO, American Clean Power Association

 “This report shows that bigger picture, coordinated transmission planning is critical to developing the kind of reliable power grid we need to support the growth of clean, affordable renewable energy going forward.” – Abigail Ross Hopper, President and CEO, Solar Energy Industries Association

 

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About ACORE:
Founded in 2001, the American Council on Renewable Energy (ACORE) is the nation’s premier pan-renewable organization uniting finance, policy and technology to accelerate the transition to a renewable energy economy. For more information, please visit www.acore.org.

About the Macro Grid Initiative:
The Macro Grid Initiative is a joint effort of the American Council on Renewable Energy and Americans for a Clean Energy Grid to promote investment in a 21st century transmission infrastructure that enhances reliability, improves efficiency and delivers more low-cost clean energy. The Initiative works closely with the American Clean Power Association, the Solar Energy Industries Association, the Advanced Power Alliance and the Clean Grid Alliance to advance our shared goals. To learn more, visit https://acore.org/macro-grid-initiative/Follow the Macro Grid Initiative on Twitter and LinkedIn.

 About Concentric Energy Advisors:
Concentric Energy Advisors (Concentric) specializes in management consulting and financial advisory services, focusing on the North American energy and water industries. Through its subsidiaries, CE Capital Advisors, Concentric Advisors ULC, and Concentric Energy Publications, Concentric provides capital market advisory support, consulting services in Canada, and publishes The Foster Report. Stay in touch with Concentric by subscribing to the Concentric Connection.

 

Media Contacts:

Alex Hobson, Vice President of Communications, ACORE
hobson@acore.org | 202.777.7584 (o) | 202.594.0706 (c)

Wendy Preston
Director of Marketing and Business Development, Concentric Energy Advisors
wpreston@ceadvisors.com | 508.263.6272

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