One thing virtually everyone can agree on is that the United States needs more transmission delivery capability to reduce congestion costs, integrate renewables, and improve safety and resilience of our aging grid. New transmission will be needed, but it takes years to develop. Fortunately, new technologies can unlock capacity on our existing grid.
A recent FERC Notice of Inquiry (NOI) regarding the commission’s electric transmission incentives policy promises to jump-start deployment of these technologies.
In 2005, the Energy Policy Act (EPAct) directed FERC to “encourage deployment of transmission technologies and other measures to increase the capacity and efficiency of existing transmission facilities and improve the operation of the facilities.” At the time, however, the relevant technologies were only just emerging and the directive was never specifically implemented. In light of technological developments in the transmission sector and an increase in attention on the potential for certain technologies to improve the operations of the existing grid, FERC opened the NOI in March of 2019 and held a public technical conference in November of 2019 to probe policy options for incentivizing the adoption of “Grid-Enhancing Technologies” (GETs).
Dynamic Line Rating (DLR): DLRs allow for an increase in the carrying capacity of existing transmission lines by calculating ratings based on-line temperature, clearance to ground, and real-time ambient conditions. In contrast to widely used static ratings, which are based on fixed, worst-case assumptions and over-conservatively place limits on-line capacities, DLRs represent the true dynamically changing capacity of a transmission line. One U.S. Department of Energy smart grid program study determined that a 5% increase in line capacity through DLR could relieve congestion by up to 60% on the target lines assessed, with a 10% increase practically eliminating all congestion.
Flow Control Devices: Devices such as phase angle regulators (PARs) and Flexible Alternating Current Transmission Systems (FACTS) can increase overall power transfers by unlocking excess capacity that exists on the system. This is done by either altering the phase angle between the transmitting and receiving end voltages of a line or by altering the line’s reactance. By actively controlling where power flows, transmission operators can move more power using their existing network. Today’s versions of these devices are often scalable and mobile, providing new options for transmission operators. A DNV GL study found that an investment of US$81 million annually to deploy flow control devices in PJM would produce region-wide savings of US$890 million each year — US$267 million in avoided transmission spending savings and US$623 million in production cost savings.
Transmission topology optimization software automatically identifies alternate paths for power flow around congested areas through the use of existing hardware, such as circuit breakers and the communications systems that enable their remote control. A Salt River Project study conducted by the Brattle Group and NewGrid implemented topology optimization controls on real-time snapshots of a diverse set of SPP market conditions and determined real-time productions costs savings to be US$18-US$44 million annually, in addition to significant reliability benefits.
Widespread deployment of these GETs in the U.S. can reduce the cost of electricity for consumers by as much as US$2 billion annually, as well as reduce production costs by a significant amount. At the same time, these devices and accompanying hardware can cost a small fraction of what a new conductor would cost.
The WATT Proposal
The WATT Coalition offered an incentive proposal in the initial NOI comments focused on small projects that provide quantifiable congestion reduction benefits. Specifically, the WATT proposal recommends that the Planning Authority evaluate a proposed project through its regular economic planning process based on a “benefits-based” approach rather than the traditional “risks and challenges” approach. If the benefits assessment determines that the estimated benefits exceed the costs of the proposed project, then the Planning Authority would award the transmission owner a “shared savings” incentive, which in this case would allow transmission owners to keep a portion (25%) of the net savings generated by deploying GETs. After this planning stage, the party that is interested in participating in the incentives program would propose a project-specific deployment and implementation program to FERC outlining the duration, cost and benefits, and details regarding the technologies included in the project. FERC then has the authority to approve or reject the proposed program.
While the specifics of further policy guidance for GETs and grid utilization are still under consideration, it is likely that incentives in some form will be implemented. Fortunately, there is a large amount of general support for an incentive-based policy, with 22 entities submitting reply comments in the inquiry docket highlighting this exact issue. After the recent technical workshop regarding GETs in November of 2019, post-conference comments were submitted in early February. At that point the FERC must make what is likely to be a once-in-a-decade decision on how to ensure these technologies become part of a more flexible and efficient grid.