The Electricity Transmission Challenge
All Powered Up With No Place To Go
Solar panels, wind turbines, pumped hydro, battery storage, advanced geothermal, biomass, advanced nuclear: none of these electricity sources do much good unless they can be connected to electricity users. This turns out to be a difficult problem: so difficult, in fact, that it may be the single largest hurdle remaining on our path to phasing out fossil fuels.
Moving electricity around is inherently challenging, because we need enough capacity at every location in the country, at every moment of the day. It’s similar to the problem of moving cars around a city. When the traffic system falls short, we call that “rush hour”. When the electricity grid falls short, we call it a blackout.
In the coming years, we’re going to be using a lot more electricity, and it’s going to be coming from a wider variety of sources. This will greatly increase transmission requirements. Unfortunately, our system for planning new transmission projects in the US is terrible. (In this post, I focus on the US, but many of the issues apply across the globe.) The good news is that there are plenty of solutions available, if we can get organized to take advantage of them. The more transmission capacity we can add, the faster and cheaper the energy transition will be.
Big Demands Are Coming For The Transmission Grid
Transmission refers to the big high-voltage lines that carry electricity from generation sources to the areas where the power is needed – the equivalent of the freeway system. (As opposed to the last-mile “distribution” lines, the equivalent of local roads, which bring lower-voltage electricity to end users.)
In recent decades, improvements in energy efficiency have kept US electricity usage fairly flat, and so there hasn’t been much need to build new transmission lines.
However, demand for electricity is about to skyrocket, as we “electrify everything” in order to get away from fossil fuels. Ground transportation is shifting from gasoline to electric vehicles, heating is shifting from furnaces to heat pumps, and so forth. All the energy that is currently being moved around the country in coal trains, natural gas pipelines, and gasoline trucks will instead be flowing through the electrical grid.
At the same time, the mix of electricity sources is changing. Historically, most electricity came from coal, natural gas, nuclear, or hydropower. With the exception of hydropower, these can generally be located near the cities where their electricity is used, leaving relatively little need to transmit power over long distances. Solar and wind power use a lot of land, and are best sited in areas that get a lot of sun or wind. As a result, they can’t always be placed close to cities, and rely on long-distance transmission – sometimes very long distance. Wind power, in particular, is heavily concentrated in the middle of the country, and of course solar power is more plentiful in the south.
Solar and wind power are also much more variable than traditional energy sources, and so they get less usage out of the transmission lines they’re connected to. Imagine you have a city that uses 1 GW of power, and you build a 1 GW transmission line to either a coal plant or a solar farm. Loosely speaking, the coal plant can make constant use of the transmission line, while the solar farm only uses it during the day. With solar, the city will need an alternative power source at night, requiring a separate transmission line.
In summary, the transmission grid is going to need to move a lot more electricity, over longer distances, using a lot of intermittent sources instead of a few steady sources. The net result is that we’ll need to build an enormous amount of new lines, in a relatively short period of time, after a period where we’ve built very little and have lost the knack for it1. Studies show a need for US transmission capacity to increase by anywhere from 2x to 5x by 2050. More transmission gives us more ability to leverage cheap renewable energy, so the closer we can get to the high end of that range, the cheaper the energy transition will be.
Transmission Is Just Plain Hard
Electricity transmission is, in some ways, a uniquely difficult problem.
We don’t get much choice as to where to locate transmission lines. They have to run from the places where electricity is generated to the places where it is used. US auto manufacturing is clustered in a few regions, according to the convenience of the manufacturers, and we ship the finished cars to where they’re needed. Transmission lines have to be where they have to be, no matter how inconvenient.
Transmission lines are long, tall, and ugly. They take up a lot of space, they’re visible from a distance, no one likes having them in their backyard, and building a long line means passing through a lot of backyards.
Capacity needs to be just right in every location. If we have a shortage of wires running into Houston, extra capacity in Chicago won’t help.
We can’t “store” transmission. If a line is under-utilized at night, we can’t bank the extra capacity for use during the day2.
In other words, transmission is inherently local in time and place, to a degree that exceeds just about every other industry associated with the energy transition. If Ford underestimates demand for the Mustang Mach-E in Cincinnati, they can shift a few over from Indianapolis. If Mitsubishi makes too many heat pumps this month, they can warehouse them until next month. But if Con Edison runs out of capacity to supply New York City’s air conditioners on a hot afternoon, that’s a bad afternoon.
Summing up: transmission lines are expensive, unwanted, take years to build, and we need to have exactly the right amount of them connecting to every region of electricity generation or usage in the country, just as both generation and usage are going through the largest changes in half a century or more. That’s hard!
Not Only Is It Hard; We’re Bad At It
In the early days of electrification in the US, we had thousands of freestanding local utilities. Over time, smaller grids were merged together, and interconnections added on an ad-hoc basis. Very little of the resulting patchwork was designed with the efficiency of the overall national energy system in mind. It is a disorganized mess, resulting from individual utilities optimizing for their own local interests, often under circumstances very different from the present day.
When it comes to transmission, utility interests are rarely aligned with a coherent national grid, or even basic economic efficiency. Utilities operate in a regulated environment, with artificial profit incentives. In general, they receive a mandated return for capital expenses, such as building a power plant. They don’t receive any return for operating expenses, such as importing electricity from a neighboring utility. So from a utility’s perspective, it is always preferable to generate their own power, even if they could import electricity for half the cost.
Even if everyone involved were trying to do the best thing for the overall system, we make it hard for them to do so. Building an interstate transmission line typically requires approval from multiple utilities, the utility commission in each state, and various federal agencies, resulting in far too many cooks in the kitchen.
While coordinating among so many different organizations would be difficult under the best of circumstances, the teams in question are often under-resourced. As we’ve discussed, in recent years the rate of increase in electricity usage has been low. And renewable energy sources are often much smaller, individually, than a fossil fuel or nuclear power project, requiring a larger number of smaller grid connections. For these reasons, the various utilities and agencies are not staffed to handle the number of new grid connections that will be needed.
And of course any major project creates both winners and losers, so there are always participants who will try to stall or kill any major project. For instance, owners of legacy fossil-fuel power plants will fight attempts to bring cheap renewable power into the area. In general, the benefits of a new transmission line are diffuse – everyone in the region gets slightly cheaper or more reliable power, everyone on Earth gets slightly cleaner air. Because the benefits are diffuse, no one in particular is motivated to fight very hard for the project. Meanwhile, the downsides are concentrated – a coal plant owner loses customers, specific landowners get transmission towers as their unsightly new neighbor – and the losers are motivated to push back. As one source put it, “why should we build a line through Arizona when California gets all the benefits?”. It’s the classic NIMBY problem, but amplified, because of the large scope of a transmission project.
As if all of that weren’t bad enough, we don’t have a good system for deciding who should pay for new transmission lines. In some cases, if a new solar or wind farm can’t be accommodated on the existing grid, the project developer will be asked to pay for an entire new transmission line. This is the equivalent of going to the store for some soda, and being told that because they have to break open a new palette, your six-pack will cost $300. The result is that developers jockey for position, trying to free-ride on recently added lines that someone else paid for, and cancelling projects that would trigger a new line.
This Is Already A Really Big Problem
Given the inherent difficulty of building an efficient transmission system, and the design flaws of the US approach to grid planning, we might expect problems to arise in practice. And we’d be right. For years now, transmission bottlenecks have been a major impediment to renewable energy:
In 2005, for instance, the largest power company in Arizona proposed to build a transmission line to carry electricity to its customers from a new wind farm in Wyoming. Last month, after 18 years of legal battles and hearings and revisions, the TransWest Express project was finally approved. [NYTimes]
When a developer wants to build a new energy project, they must first wait in the “interconnection queue”, to receive permission for their project to be connected to the grid. Wind, solar, and energy storage projects currently in the queue total 2000 gigawatts of generation capacity. By comparison, “the total capacity of all existing power plants on the U.S. electric grid is 1,250 gigawatts”3. Many of these projects in the queue won’t actually be built; because the backlog is so long, developers submit applications for an array of potential projects, not all of which they expect to follow through on. This is a sign of a dysfunctional system, somewhat akin to the way early-Covid toilet paper shortages were exacerbated by panic buying when people saw store shelves emptying out.
Another sign of transmission bottlenecks is the fact that existing renewables are often “curtailed”, meaning that some of the electricity they produce can’t be accommodated on the grid, and needs to be thrown away. For instance, one source I found (but unfortunately can’t cite) states:
Total wind curtailment in SPP [Southwest Power Pool] in 2021 was 6,354 gigawatt hours, equivalent to 7.3% of total wind generation.
Yet another signal is the phenomenon of negative electricity prices. Normally, when local electricity supply exceeds demand in a particular location, the excess will be transmitted to other regions, and/or some generators will shut down. However, some power plants (e.g. coal plants) can’t shut down quickly, and others might keep running due to perverse incentives (e.g. a tax credit based on the amount of power they generate, even if the power isn’t needed). Sometimes, the amount of such “can’t stop won’t stop” power generation exceeds the capacity of the transmission grid to carry the power away, and the result is negative power prices, a sure sign of insufficient transmission capacity. From the same source:
As recently as 2015, negative wholesale prices occurred in less than 2% of all hours and locations. Since 2015, the frequency of negative prices has increased steadily, reaching almost 6% in 2021. There are hundreds of locations, mostly in the middle of the country, which now experience negative electricity prices during more than 20% of all hours.
Transmission Saves Money
The most efficient paths to decarbonizing the grid rely on a dramatic increase in transmission capacity. For instance, a 2022 report by the US NREL (National Renewable Energy Laboratory) outlines several paths for achieving a net-zero-greenhouse-emissions US electricity grid by 2035, under the assumption that electrification will lead to a substantial increase in energy demand during that time period. Here are some key numbers from that that report:
Between 2020 and 2035, annual electricity usage increases by well over 50%.
Over the same period, transmission capacity increases by anywhere from 27% to 187%, depending on the scenario. “Beyond already planned additions, these total transmission builds would require 1,400–10,100 miles of new high-capacity lines per year, assuming new construction began in 2026.” (Note that these figures are for 2035; earlier, when I mentioned an increase in transmission capacity of 2-5x, that was for 2050.)
In the scenario that assumes the most construction of transmission lines, the net cost to decarbonize the grid is $330 billion. In the scenario that assumes the least construction, the net cost is $740 billion, over twice as much. (These figures do not take into account the health benefits from reduced pollution, nor the myriad benefits of reduced climate impact. When taking those factors into account, all scenarios show benefits greatly exceeding costs. The high-transmission scenario has benefits exceeding costs even without considering the impact on global warming, as the direct health benefits alone are projected at $390 billion.)
So improvements in our ability to add transmission capacity will yield substantial cost savings, as well as accelerating the climate and health benefits of the energy transition.
(For a deeper dive into the NREL report, I highly recommend the interview with one of the authors on episode 188 of the Energy Transition Show. Note that only part of the interview is available for free; it’s $7 to listen to the whole thing.)
What options do we have for adding transmission capacity? In the next few sections, I’ll describe several different approaches.
Get More From The Wires We Already Have
It’s possible to move more electricity through the existing distribution system. Some techniques:
Dynamic Line Rating. The maximum amount of current which can be sent through a transmission line is based on the line’s ability to tolerate heat. More current produces more heat, which causes the metal cable to sag, and eventually it will sag too much. Traditionally, utilities determine capacity based on a worst-case scenario: continuous high usage on a very hot, sunny, windless day. Under “dynamic line rating”, the utility continuously monitors the actual temperature of the line, and adjusts the cap accordingly. An International Renewable Energy Agency report cites one example: “Oncor Electric Delivery, a US utility, implemented DLR [dynamic line rating] and observed ampacity [capacity] increases of 6–14% for 84–91% of the time.” A DLR project in Belgium achieved an average 30 percent increase in transmission grid capacity. DLR may be especially well suited for wind energy, for the stupidly simply reason that when wind turbines are producing their maximum output, that means the wind is blowing, which helps keep the wires cool.
Topology optimization. Grid operators need to continuously adjust the flow of electricity through each line on the grid, in response to changes in supply and demand. This turns out to be quite difficult, and the software used to do it today doesn’t always manage to get the most possible use out of the overall system – just as a traffic jam can sometimes develop on one highway even when a parallel road is underused. A new generation of advanced algorithms promises to squeeze more electricity through the existing wires.
Using batteries to time-shift transmission. Suppose you have a solar farm that can produce up to 500 MW of power during the day, but the local grid connection can only accommodate 300 MW. You could dump the excess 200 MW of power into a battery, and feed it into the grid at night. (If the power isn’t needed at night, it could be fed into a second battery, located at the other end of the power line.) In this way, batteries can be used to “time-shift” use of the transmission lines away from peak hours – the equivalent of staying late at work to avoid rush hour traffic.
Dynamic pricing would raise electricity prices during time periods when the transmission grid is maxed out. The idea would be to convince some electricity users to defer their usage until a less-congested time. For instance, electric school buses don’t need to recharge the moment they arrive back at the depot; they could wait until the nighttime lull in usage. This is also known as “demand response”, and can also help alleviate other issues with renewable power, for instance by matching demand to times of day when solar and/or wind power are plentiful.
It’s hard to get a clear picture of the amount of additional capacity that could be squeezed out using these approaches, so I don’t know how much of the problem can be solved this way. But every little bit counts, and these techniques, where applicable, should be very cost-effective.
One challenge is the fact that, under the regulations in many US states, these approaches may not be very profitable for utility companies (as compared to alternatives such as building another gas plant). Per Canary Media:
Simply put, most U.S. transmission-owning utilities make money by convincing regulators to allow them to invest in new power lines and make other capital expenditures for equipment — not by making the power lines they already have work more efficiently.
Another way to avoid over-burdening the existing grid is to bypass it entirely, by locating electricity-intensive operations (including new / growth industries such as hydrogen production and water desalination) near renewable energy sources. I imagine we will see a certain amount of this. Rooftop solar of course is another way of co-locating supply and demand; but the supply of rooftops is not infinite, and the cost is substantially higher than for grid-scale solar.
Get More From The Right-of-Way We Already Have
Some of the challenges in building new transmission lines relate to finding a place to put them. Things get a bit easier if we can place higher-capacity wires on the existing right-of-way, and indeed there are a variety of techniques for this:
Stronger wires. Because current is limited by the tendency of wires to sag when they get hot, we could just build wires out of stronger material, and indeed there are a number of approaches for this.
Higher voltage. Heat is driven by the amount of current (amps) flowing through the wire. Increasing voltage allows more power to be moved for the same number of amps. For instance, Norway's grid operator found that “the capacity of existing 300 kV lines can be increased by almost 30% by upgrading them to 420 kV”.
HVDC, or High-Voltage Direct Current, is a relatively new technology that uses direct current, instead of the traditional alternating current. This can require sophisticated conversion equipment at each end of the line, but is more efficient when moving large amounts of power over long distances.
Transportation corridors – in some cases, it may be possible to add transmission lines alongside highways, railroads, and other existing right-of-way.
Again, I don’t have a clear idea of exactly how much added capacity could be added in this fashion. These sorts of upgrades can be expensive, but presumably less expensive and problematic than acquiring and clearing new right-of-way.
Get More Right-Of-Way
If all else fails, we could expand the transmission grid by, you know, expanding the transmission grid: acquire land, and build power lines on it. We did a lot of that in the 1970s, and in theory we can do it again. To make that happen, we probably need to revisit the processes for planning, permitting, executing, and paying for such projects.
The most promising approach would be to centralize authority under a single federal agency, probably FERC (the Federal Energy Regulatory Commission). FERC already plays this role for natural gas pipelines; extending that to cover major transmission lines could significantly reduce the cost and increase the speed of the energy transition in the US.
It’s The Wires, Stupid
In the next few decades, we’re going to need a lot more electricity, and the best places to get it from are going to be a lot more spread out. That means we need to get much better at the surprisingly difficult job of moving electrons around. It’s already a serious bottleneck, and the pace of renewables deployment is only going to accelerate, so we need progress urgently. Unfortunately, the current system for adding transmission capacity is almost a perfect storm of bad incentives, lack of coordination, understaffed agencies, inappropriate funding models, and excessive approval processes.
(There are a few instances of progress. For instance, California just approved a $7.3 billion plan to build thousands of miles of new high-voltage transmission. There are still many hurdles to clear, such as permitting all of the new lines, but it’s a good step, notably including a coordinated plan for the entire state grid.)
If we fail to add enough transmission capacity, the energy transition will still happen, but it will be slower and more expensive. We’ll need more nuclear power, more spare generation capacity, and it will take longer to phase out fossil fuels.
If you want to find a bright side, I suppose it’s the fact that there’s plenty of room for improvement. We have a broad array of technical solutions at hand: dynamic line rating, using batteries to time-shift transmission, higher-voltage wires, new transmission corridors, and many more. To make good and timely use of these options, we desperately need to address the institutional problems in the way transmission projects are planned today.
(For further reading, check out a recent Canary Media article, A backed-up grid threatens clean energy growth from Virginia to Illinois, that goes into more detail about the practical challenges facing renewable development in the US.)
By “lost the knack”, I mean that supply chains, planning agency staffs, and other necessities are currently scaled for the relatively modest pace of transmission development of the last few decades.
Well, actually we kind of can! By adding batteries to the system, we can even out the day / night variation in usage of transmission lines. I’ll discuss this later in the post.
Source: Canary Media, in turn drawing on a study by Lawrence Berkeley National Lab. Note that these figures are “nameplate capacity”, meaning the power output when the generator is running at 100%. To determine the actual amount of electricity produced by a given source, you need to multiply by the “capacity factor”. For instance, if a solar farm on average generates 25% of its nameplate capacity, we would say it has a capacity factor of 25%. Wind and (especially) solar power have comparatively low capacity factors, so the 2000 gigawatts of renewable projects sitting in the interconnection queue may represent less potential electricity than the 1250 gigawatts of power plants currently on the grid. Still, it’s a stupendously large backlog.
Electrifyingly enlightening
This was great, thank you! The link to the canary media post about software in use to optimize energy flows was especially helpful