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We’ve Got a Transmission Traffic Jam: Why this problem is costing consumers billions

By Chuck Ross | Sep 15, 2023
Getty Images / angelha
Transmission—or, rather, the lack of it—has been in the news lately, with proponents for transmission growth typically emphasizing the importance of new lines in boosting efficient use of renewables and in adding resilience to national and regional grids. 

Transmission—or, rather, the lack of it—has been in the news lately, with proponents for transmission growth typically emphasizing the importance of new lines in boosting efficient use of renewables and in adding resilience to national and regional grids. While these are critical goals, they can seem less than relevant to how we live our daily lives. A new study makes the cost of inadequate transmission an economic issue for every electric utility customer by attaching a dollar figure to what we’re paying because of the congestion caused by transmission shortfalls. In 2022, researchers found transmission congestion cost U.S. electric consumers $20.8 billion.

These numbers were crunched by Grid Strategies LLC, Washington, D.C., a power sector consulting group working with utilities and developers integrating carbon-free electricity into our power systems. The calculations outlined in “Transmission Congestion Costs Rise Again in U.S. RTOs” are based on figures reported by the nation’s six regional transmission organizations (RTOs), and extrapolations for California (which reports costs on a different schedule) and those areas not served by an RTO. Looking just at the reporting RTOs, the authors noted a very expensive trend upward, with costs doubling between 2020 and 2021, and climbing by an additional 56% between 2021 and 2022.

Congestion occurs when “there’s a limitation on the amount of energy you can transmit—when you’d like to move more power than is physically possible or safe,” said co-author Richard Doying, a vice president at Grid Strategies. From a market perspective, such constraints can mean, for example, having to call on more expensive energy providers because of a lack of access to lower-cost options. Today, Doying said, that can mean turning to natural gas or coal generators because current transmission designs lack adequate connections to much less expensive wind or solar. 

Doying and his co-authors identified five factors driving the increase in congestion costs over the last decade, including:

  • Insufficient regional and interregional transmission capacity. High-voltage transmission construction has decreased significantly since 2010, with average installations dropping to 645 miles from 2015–2020, versus 1,700 miles from 2010–2015.
  • Fuel price volatility. Wholesale gas prices jumped more than 53% between 2021 and 2022. Without adequate connections to less-expensive renewables, utilities are forced to call on natural gas generators instead.
  • Transmission outages. Whether due to scheduled maintenance or repairs, these events led to higher congestion in 2022 in three RTOs—the Southwest Power Pool, New York Independent System Operator and the Texas grid.
  • Extreme weather events. In particular, winter storm Elliot in December 2022 affected most of the continental United States. The Midcontinent Independent System Operator, which serves the nation’s midsection, says the storm added $350 million in congestion costs in just two days.
  • Increased demand. Even before electric vehicles begin to have an effect, the nation was facing rapid demand growth, in some cases due to severe weather. ERCOT, Texas’ grid operator, stated all-time peak demand records were broken 11 times in summer 2022—and this summer’s heatwaves have likely driven usage even higher.

Reducing congestion

Grid Strategies’ suggestions for reducing transmission congestion and bringing down costs begin with working with what we have. Grid-enhancing technologies (GETs), for example, could be implemented in the short term and bring sensor-based, digital solutions to transmission systems that have long operated in an analog fashion. GETs include strategies such as dynamic line rating, which uses real-time factors like temperature and wind conditions to help decide just how much power a specific line can carry. Advanced power flow control devices help enable more dynamic flow control over transmission lines. Topology optimization can identify rerouting options and offer switching controls to send power through the least-congested lines.

A medium-term solution is to replace existing lines with advanced conductors with lightweight carbon or composite cores. These designs allow for added aluminum content without increasing diameter or weight. As a result, conductor sag and line losses are reduced, and current capacity can increase. 

These intermediate steps could go a long way toward improving the existing transmission system’s efficiency. For example, the Brattle Group, Boston, recently studied opportunities for GETs in the Southwest Power Pool (the RTO managing transmission for most of the states from Oklahoma up through the Dakotas) and found GETs could increase transmission capacity enough to relieve congestion by 40% or more in many cases. 

While GETs and installing new conductors could provide some short-term relief within the existing transmission system, they won’t address the need for new connections between and within regions. Boosting the contributions of renewable solar and wind generation requires new lines to reach those resources. And, as the report underscores, that new transmission will help make electricity more affordable.

Header image: Getty Images / angelha

About The Author

ROSS has covered building and energy technologies and electric-utility business issues for more than 25 years. Contact him at [email protected].

 

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