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Report: ‘More Workable Transmission Policies’ Needed For 22 Projects To Begin Construction Soon

April 29, 2021
During an April 27 webinar, Michael Goggin, vice president of Grid Strategies LLC, said “transmission has been absolutely essential for the growth of renewable energy and that’s even more true going forward."

A report sponsored by Americans for a Clean Energy Grid (ACEG), with support from the Macro Grid Initiative, which was released on April 27, said that 22 high-voltage transmission projects could begin construction in the near term if more workable transmission policies are enacted.

The report, “Transmission projects ready to go: Plugging into America’s untapped renewable resources,” noted that the 22 projects, totaling about $33.3bn include the:

  • $3bn Transwest Express project, which is a DC line designed to deliver power from Wyoming’s proposed Chokecherry and Sierra Madre wind project to a market hub near Las Vegas, Nev.
  • Estimated $2.9bn Gateway West project, which is a PacifiCorp AC project designed to deliver Wyoming wind to the Pacific Northwest
  • $2.5bn SOO Green project, which is an underground DC line running under existing railroad right of way (ROW) from Iowa to near Chicago
  • Invenergy’s $2.3bn Grain Belt Express project, which was originally developed by Clean Line to deliver renewable energy from Kansas to PJM Interconnection
  • $2.2bn Champlain Hudson project, which is a DC line running mostly under Lake Champlain and the Hudson River, delivering Canadian power to New York City

The 22 lines were identified through a review of regional transmission plans, NERC’s list of proposed transmission projects, and other sources, the report said, adding that the lines represent all major transmission projects that could proceed to construction in the next few years.

According to the report, the 22 projects could interconnect around 60,000 MW of new renewable capacity. The report estimated that the transmission investment involving those projects can create around 600,000 jobs, while the wind and solar deployment enabled by the lines would create an additional 640,000 jobs.

The report said that in addition to job creation and economic development benefits, the power grid should be a primary focus of infrastructure policy because a recent American Society of Civil Engineers report card gave the country’s power grid infrastructure a grade of C minus, noting that much of the grid is aging and congested. According to the report, a lack of strong transmission ties with neighboring power systems was a contributing factor to such recent electric reliability events as the Texas blackout event in February.

If completed, the report said, the 22 projects would add around 8,000 miles and 42,000 MW of transfer capacity to the country’s transmission system.

Among other things, the report noted that Grid Strategies has labeled the key areas of policy reform needed to enable greater transmission investment the “three Ps,” as in, planning, paying for, and permitting transmission.

The report noted that a bill has been introduced to create a tax credit to incentivize investments in high-voltage transmission lines.

As TransmissionHub reported, U.S. Rep. Steven Horsford (D-Nev.), U.S. Sen. Martin Heinrich (D-N.M), and U.S. Rep. Susie Lee (D-Nev.) have introduced the Electric Power Infrastructure Improvement Act, which would provide an investment tax credit of 30% for regionally significant transmission projects, as noted in an April 8 statement posted on the websites of Horsford and Heinrich.

The statement noted that projects that would qualify for the investment credit are:

  • Overhead, underground, or offshore transmission lines, including ancillary facilities
  • At least 500 MW and 275 kV in capacity
  • Either AC or DC
  • Able to deliver power produced in either a rural area or offshore
  • Placed in service by Dec. 31, 2031

As noted in the legislation, the qualifying electric power transmission line credit for any taxable year is an amount equal to 30% of the qualified investment for such taxable year with respect to any qualifying electric power transmission line property of the taxpayer. The amendments made by the legislation are to apply to property placed in service after Dec. 31, 2021, the legislation said.

The statement noted that President Joe Biden’s recently released American Jobs Plan includes a targeted investment tax credit that incentivizes the buildout of high-voltage capacity power lines.

The report said that based on recent success rates for transmission projects and the many challenges that hinder transmission, less than half of the 22 projects are expected to proceed to construction in the near term, bringing the total transmission investment down from about $33.3bn if all of them were to proceed, to around $15bn. With the proposed 30% tax credit, the total federal budget impact of the tax credit for the projects that proceed to construction is likely to be under $5bn, the report said.

Noting that other policies to enable large-scale expansion of transmission over the longer term are also needed, the report said that legislation could be enacted to direct the federal government to directly invest in new transmission lines as an “anchor tenant” customer, and then re-sell that contracted transmission capacity to renewable developers and others seeking to use the line.

In addition, the report said, FERC, which has authority over how transmission is planned and paid for, can use that authority to break the transmission planning and cost allocation logjams that are preventing large regional and interregional lines from being built. Legislation to direct FERC to use that authority could also be helpful, the report said.

To read the complete article, including information about an April 27 webinar about the report, visit TransmissionHub.

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