We have been hearing
concerns that moving to a regional transmission operator to connect
the Western U.S. somehow harms the prospects for greater development of
distributed energy resources, especially local solar and storage, and could lead
to an increase in the use of fossil fuels elsewhere in the region. A careful
analysis of the facts shows these concerns are unfounded and that in fact, the
opposite is true. A regional grid operator will be beneficial for renewable
energy development, including distributed generation, for multiple reasons.
Replacing a highly balkanized and inefficient group of grid
operators (see the WECC balancing area map below), many of which rely on
outdated and highly polluting power plants, with a fully coordinated regional
system operator will make better use of the existing interconnected grid, more
efficiently share electricity reserves allowing for the accelerated retirement
of unneeded facilities, and give more value to cleaner, renewable power
sources.
Renewable energy benefits
A regional grid operator makes managing each renewable
energy generator’s variable output easier to coordinate and creates more value
that can be shared by utility customers and renewable energy developers. It
does this by blending renewable power from across the West, including the
output from many smaller customer-owned or community-based systems located on
dispersed distribution systems. This widespread diversity of resources can be
used to meet energy demand at times when fossil fuel generators that are part
of local systems would otherwise have to be switched on to fill in the
gap.
Solar energy ramps up and down in a quite predictable
manner, but varies by longitude and latitude. The availability of other
renewable resources can now be forecast with ever-increasing accuracy. A
regional grid operator can use renewable power resources across a much wider
geography that experiences different weather patterns and energy loads to
better meet both systemwide and local needs. This wider area coordination can reduce
not only greenhouse gas emissions but also local air pollutants that harm
public health, particularly for the most vulnerable.
Transmission planning benefits
A regional grid operator has the additional benefit of using
the existing transmission system more efficiently, reducing the need to develop
new transmission projects and lowering costs to utility customers. A regional
system operator can optimize power dispatch across the entire transmission network
and reduce congestion now currently caused by uneconomic contractual rights and
unneeded transmission access charges.
Better forecasting and scheduling of resources will allow
the transmission network, in which we have invested billions of dollars, to be
used much more efficiently. Less transmission capacity will sit idle and more
pathways will be opened up to deliver power to areas when it is most needed.
This more efficient use of existing transmission assets will prevent the
unneeded transmission construction that would otherwise occur in a balkanized
system.
In its recently released Transmission Plan, the California
Independent System Operator approved a strategy that leverages a substation
upgrade, battery energy storage, energy efficiency measures, and distributed
generation to retire 165 megawatts of older, high-polluting natural-gas
generators located in a low-income community in Oakland, Calif. This type of
innovative, forward-looking planning that incorporates “non-wires solutions”
can be replicated across the West through coordinated transmission and
individual state-directed efforts.
Distributed energy resource benefits
A regional grid is also good for the advancement of
distributed energy resources at the grid edge, where the lower-voltage
distribution system delivers power to factories, businesses and households. The
distribution system is now being modernized to allow for two-way flows of power
that are required by more distributed resources like solar and storage. A
smarter distribution system will enable better coordination between a
transmission system operator and the utilities that run the distribution
systems, which will result in improved reliability and resiliency of the
combined electric system.
Distributed energy resources can provide an array of
electrical system benefits. By having access to wholesale markets, distributed
solar, energy storage and other local resources can capture value that is
unavailable in areas without liquid power markets. Managing and better
coordinating power flows at the transmission and distribution interface
(substations where the wholesale and retail electrical systems intersect) will
allow these resources to reduce the wear and tear on both the transmission and
distribution systems, and defer costly grid upgrades (the distribution system
is about four times costlier than the transmission system for the delivery of a
kilowatt-hour of electricity to customers).
Reforms are unquestionably needed at the distribution system
to ensure that grid investments are cost-effective and targeted to provide the
most benefit. The independent planning of the transmission system can provide a
good model as to how to use the distribution system more efficiently.
Electric vehicle benefits
A regional grid can even help assure that the rapidly
expanding fleet of electric vehicles is powered by low-cost renewable
generation. By accessing regional solar, wind and storage resources (some
storage can be provided by the EVs themselves), and compensating them through
the market, a regional grid helps ensure that the growing fleet of EVs will be
clean, helping realize the EV promise of lower amounts of greenhouse gases and
conventional pollution.
A cleaner grid
A regional grid with a coordinated market will be a cleaner
grid. Solar and wind generation are by far the lowest-cost power plants to
operate and will be more widely utilized in a region-wide electricity market.
While California has a robust and liquid wholesale electricity market, many
other parts of the Western grid are operated according to individual utility
priorities. This balkanized setup does not result in the lowest-cost energy
being used in each and every hour.
A regional grid operator, independently managing day-ahead
and real-time energy markets, will put economic pressure on inefficient and
dirtier fossil generation units that cost more to operate. Renewable energy has
no fuel cost and very low operation and maintenance costs compared with
fossil-fueled competitors. In a competitive market, renewable generation will
be used before costlier and more polluting fossil generation.
In a regional system, more renewable energy will get
developed, less will be turned off because of local imbalances, and customers
everywhere will enjoy cleaner and cheaper power. Today, increasing amounts of
renewable energy — mainly solar power — must be turned off (curtailed) when
there is insufficient demand for it in a single balancing area.
A regional grid operator will create value for solar
resources that now must be curtailed by making it available to customers in
neighboring parts of the Western region. Instead of using costlier fossil
generation, these customers will now have access to lower-cost clean power. The
same holds true for wind generators constrained by small markets.
A regionally integrated grid and market is no threat to the
evolution of DERs and instead is a powerful enabling force for the orderly and
efficient integration of renewable energy and even new technologies providing
system reliability services that make the electrical system cleaner, more
reliable and resilient, and more cost-effective for all of us. It is time for
regional policymakers to take this step together, for all our benefit.
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