Upgrading transmission architecture is a task facing many economies that have set net-zero goals. Germany’s green-power "autobahn"—four high-voltage power lines connecting wind and solar projects in the north with industrial centers in the south—has been beset by severe delays and climbing costs, with a plan late last year estimating it will cost 95 billion euros ($115 billion). China last year completed a 22.6 billion yuan ($3.5 billion) ultra-high voltage line that will carry only clean energy.
Europe has developed some of the best transmission infrastructure in the world, successfully connecting grids in different countries to provide energy security and boost renewable power use. Spare wind power from Denmark can feed into Sweden and excess nuclear power from Belgium can go to the U.K. “When you’re thinking about renewables, there is an inherent benefit for the grid to be linked across a very wide geographic area,” says Andreas Gandolfo, head of European power transition at clean energy research group BloombergNEF.
Grid improvements needed in the U.S. to accommodate a cleaner future could cost as much as $90 billion by 2030, according to a 2019 study commissioned by WIRES, a trade group that advocates for more construction of high-voltage transmission. The full price tag by 2050 could reach $690 billion. A recent study by the University of California, Berkeley's Goldman School of Public Policy, meanwhile, found that reaching 90% carbon-free electricity by 2035 could be feasible and economic by significantly increasing solar, wind and batteries.
Before the Texas electricity fiasco, a heat wave across California last year caused a spike in energy demand as residents cranked up air conditioners, which contributed to rolling blackouts. Both events showed the fragility of U.S. grids in the face of climate change and extreme weather, and ignited debate over the reliability of wind and solar compared to fossil fuels.
In some ways the paradigm has shifted beyond that. Many utilities have committed to reaching net-zero by 2050 with renewable energy now mainstream and as consensus grows globally that more has to be done to slow global warming. Xcel Energy, which provides energy across eight states, said on Monday that it cut company-wide carbon emissions 12% last year from 2019 levels. But by 2023, many of the easy-to-build renewables projects near existing transmission lines could be completed. “From there, it’s off the beaten path,” says Michael Weinstein, an equity analyst at Credit Suisse Group AG.
A customer shops for groceries at a market during a blackout in Napa, California in 2019. Photographer: David Paul Morris/Bloomberg
One way the White House could speed progress on the grid overhaul is by promoting “better agency coordination” between the Energy Department and the Federal Energy Regulatory Commission, says Jon Wellinghoff, a former FERC head. The Energy Department “has significant authority” over transmission and establishing national corridors, which it could delegate to the FERC—an agency that has expertise with infrastructure, pipelines and liquefied natural gas facilities.
The FERC’s current head Richard Glick said this month that it might be more economical to look at projects more holistically—for example, building a hub-and-spoke model to gather offshore wind to central points, then dispersing it from there—than building many lines from individual projects. The agency is also seeking to create more incentives for transmission builders to encourage them to embrace new technology and upgrade existing lines.
It will be very hard to boost renewable capacity without a major infrastructure push, says Mike Garland, chief executive officer of Pattern Energy. His company is one of the biggest American clean energy developers, and just began building the 150-mile Western Spirit Transmission line in New Mexico to carry wind power.
“We’ll need transmission to get to levels of decarbonization that they want to achieve,” he says. Today, transmission is “in a state of hibernation, or just coming out of hibernation.”
This article is part of Bloomberg Green’s Carbon Benchmarks series, which analyzes how countries plan to reach net-zero emissions. Click here to get e-mail alerts when new stories are published.
—With Dan Murtaugh, Naureen Malik, Akshat Rathi, Jess Shankleman and Eric Roston.
This article was provided by Bloomberg News.