Grids on the radar for accelerating US energy transition

Global trends across the energy sector point to more clean power in the energy mix, combined with increasing electrification of end uses such as transport, heating in buildings and industrial processes.  Power grids play a critical role in bringing clean power from where it is produced to where it is consumed.

The US Power Grid is vast and fairly decentralized.  Like many grids around the world, it was built to connect coal and gas power plants to consumption points.  Now, as renewable energy sources in the form of wind and solar are increasingly being developed across the United States, the power grid needs to evolve and modernize.  With generator interconnection queues around the country growing 40 percent between 2021 and 2022, and over 1,350 GW of generation, mostly solar and wind, waiting to connect to the power grid, this evolution must accelerate.

Drawing attention to the urgency, in late 2021, the Biden administration announced a goal of achieving a carbon pollution-free electricity sector by 2035.  According to some experts, achieving this goal would mean that US transmission capacity would need to more than double in just over a decade. 

As the energy transition accelerates and renewable energy generation increases significantly, it is clear that we need to ensure grid capacity and flexibility to evacuate and transmit the power efficiently and reliably to consumers. We must pay urgent attention to grid infrastructure, a historically under-invested sector and realization of the message ‘no transition without transmission’ must sink in. 

Looking around the world, and particularly at major economies, what has been happening recently from a policy perspective, when it comes to clean energy and decarbonization?

Harmeet Bawa: A plethora of policies which have been announced in the past few years focusing on clean energy and decarbonization highlight that governments now see energy transition as a top priority, especially if they are to achieve their ambitious Net Zero goals.  Here are a few examples:

European Union: 

Under the European Green Deal, the EU envisions Europe to evolve into the first climate neutral continent by 2050.  To get there, the EU has developed a number of policies, directives and regulations including  Fit for 55, RePower EU and the more recent Net Zero Industry Act.  The focus is fully on the urgent shift towards clean power and electrification; power grids to support that shift; and the supply chains to ensure that the turbines, transformers, high-voltage direct current (HVDC) systems and other clean energy technologies needed are available.  

United Kingdom:

The UK was the first G20 country to put a net zero by 2050 commitment into law. The current target for net zero power is 2035 with a 50GW of offshore wind ambition for 2030 and an end to new internal combustion engine (ICE) vehicle sales in 2030. On strategic network planning the Holistic Network Design (HND) defines the new transmission connections needed for 2030 and the Accelerated Strategic Transmission Investment (ASTI) program fast tracked their approval. The government response to Winser report is due 'soon' and will form an action plan to half the time taken to deliver new network infrastructure - planning, consenting, supply chains, procurement models and public communications are all expected to be an integral part of the plan. 

Japan: 

Japan’s Green Transformation (GX) policy aims to deliver 36-38 percent renewable energy in the country’s power mix by 2030 including 10 GW of offshore wind power and up to 118 GW of solar power.  The policy also includes a plan to secure investment to maintain, up-grade and modernize transmission and distribution networks for this massive introduction of renewables. Power storage facilities, such as storage batteries (including EVs) and pumped storage, also play an important role in this policy.  

Australia: 

The recent energy policy, Rewiring the Nation, includes the creation of a special corporation to funnel $20bn into new transmission links to accelerate the uptake of more clean energy. The policy is designed to cut Australia’s 2005-level greenhouse gas emissions 43 percent by 2030 and achieve carbon neutrality by 2050.  

What major policy announcements impacting the power sector have we seen from the US Government in recent years?

Doug Arent:  Two major pieces of legislation were announced by the US government during 2021 and 2022, the Infrastructure Investment and Jobs Act (also known as the Bipartisan Infrastructure Law) and the Inflation Reduction Act.  

The Infrastructure Investment and Jobs Act (IIJA) was signed into law in late 2021.  The IIJA provides over $27 billion in financing and incentive programmes to improve grid resilience and reliability across the US. The aim is to build new, resilient transmission lines to facilitate the integration of renewables.  The Building a Better Grid Initiative launched in Jan 2022 is a notable result of the IIJA and allocates $20 billion to deliver on this aim.

The Inflation Reduction Act (IRA) was signed into law in 2022 and contains $500 billion in new spending and tax breaks that aim to boost clean energy, reduce healthcare costs, and increase tax revenues. The IRA is heralded as the most significant climate legislation in U.S. history, accelerating the transition to a clean energy economy through a series of incentives.

According to the American Clean Power Association (ACP), initiatives in the US over the past 12 months have led to the announcement of approximately $271 billion in clean energy projects and manufacturing facilities, greater than combined clean energy investments made over the previous eight years.  The implementation of these policies will be critical to reaching the US goal of 100 percent clean electricity by 2035 and a zero-emissions economy by 2050.

Concretely, how will policies such as the IIJA or the IRA impact the optimized development, refurbishment, and modernization of US transmission grids?

D.A: Both the IIJA and IRA bills set aside significant funding and authorize the US Department of Energy (DOE) to invest in modernizing the grid. Multiple offices of DOE are focused on deploying their resources to support these goals. 

Additionally, DOE restructured their offices to create an Under Secretary for Infrastructure, under which are the Office of Clean Energy Demonstrations, the Grid Deployment Office, the Office of Manufacturing and Energy Supply Chains, the Office of Cybersecurity, Energy Security and Emergency Response, the Loan Programs Office and others which are all very focused on the achievement of the 2035 goals.  

There is also ongoing work studying the important role, combined with the trade-offs, of enhanced transmission grids in United States as authorized in the Fiscal Responsibility Act. These would build off the Interconnections Seam Study that NREL released a number of years ago which identified positive benefit/cost ratios for a DC macro grid for the Continental United States, as well as the National Transmission Study that is currently underway.

What are two key enablers and catalysts that can accelerate the achievement of global net zero targets? 

H.B:  The ambitions displayed by countries around the world in recent years through their net zero commitments are laudable.  This is indeed a great opportunity but nonetheless, the scale of the challenge is immense. 

Two key enablers to accelerate the shift towards net zero include:

1. Power Grid Investments and new business models: 

Without significant and urgent acceleration of grid investments we could jeopardize our climate goals.

In addition to boosting grid capacity, we also need to enhance flexibility, reliability, and grid resilience/security e.g., through digitalization across the value chain, to handle new supply and demand side complexities. Here I would like to add that when it comes to grids, a key enabler for this and the overall energy transition will be the adoption of new business models by all stakeholders including policy makers, regulators, power utilities and technology providers. 

2. Deployment of technologies at Speed and Scale:  

While it is important to sustain our focus on innovation & development, most technologies required for the achievement of near- and medium-term goals (e.g., to 2030 and beyond) already exist. We must focus on deployment of these technologies at ‘speed’ and ‘scale’.  We need to build collaboration and coordination across stakeholders, sectors and geographies to drive the energy transition forward.  We must also urgently alleviate delays relating to permitting and approvals - too many clean energy infrastructure projects have already been held up.

What are the key enablers that can accelerate achievement of the US government’s goal of 100 percent clean electricity by 2035?

D.A:  There are several factors coming together, (1) technology capabilities; (2) economics, including those supported by the IRA and other recent federal legislation; and (3) market factors driving both supply and demand of clean energy, that are all building momentum toward achieving the 100 percent clean electricity by 2035 goal. NREL’s recent work, such as the 100 percent by 2035 study, or that of others such as the Princeton Net Zero study, show also that there are significant challenges in terms of scale of installation, supply chain, and building transmission, accounting for the historic timeline of doing so. 

The figure below from the NREL 2035 Study highlights the significant contrast among different scenarios for transmission build out. Here we see representations of the current system side by side with either constrained build out scenarios or relatively fast transmission filled out scenarios. Transmission build-out, of course, will heavily depend upon permitting timelines, social acceptability, and other factors.

DOE has also recently released a review of the US electricity grid supply chain with a focus on large power transformers and HVDC systems. The review highlighted that many critical power grid components have limited to no domestic manufacturing capacity, a challenge that policies such as the IRA are addressing.

The three major components of the U.S. power system—the Western Interconnection, the Eastern Interconnection, and the Electric Reliability Council of Texas—operate almost independently of each other.  How could a nationwide high-voltage (HV) grid be developed in the US and what would be the benefits?

D.A: The Seams study, as I mentioned briefly above, evaluated multiple configurations of a HVDC macro grid for the United States.  Each of these configurations had positive benefit cost ratios under a 30 percent renewable energy generation scenario. The results show benefit-to-cost ratios that reach as high as 2.5, indicating significant value to increasing the transmission capacity between the interconnections under the cases considered, realized through sharing generation resources and flexibility across regions.  Additionally, the HVDC configurations offer enhanced security given the interregional transmission capabilities to address local or regional deficiencies or other balancing challenges.

For example, the study evaluated 4 configurations as depicted in the figure below.   These designs reflect: 

• Design 1 (top left): No increase in transmission capacity between the interconnections

• Design 2a (top right): Increasing capacity at existing back-to-back ties

• Design 2b (bottom left): Increasing capacity at existing back-to-back ties plus three long-distance HVDC ties between the interconnections

• Design 3 (bottom right): Nationwide HVDC

Details of the model can be found in this IEEE Transactions on Power Systems article.

The US recently announced a national goal to deploy 30 GW of offshore wind energy by 2030.  What actions will be essential for the US to achieve this goal and what coordinated transmission solutions are being considered?

D.A: The offshore wind goals are envisioned to be enabled by a combination of both fixed and floating foundations, and of course efficient transmission and interconnection to key onshore locations.

Transmission configurations are under discussion and include direct connectivity, meshed grids, and hybrid configurations.   Multiple efforts are launching detailed transmission planning studies.  In particular, NREL is leading an effort called the Atlantic Offshore Wind Transmission Study.  This study will:

• Evaluate coordinated transmission solutions to enable offshore wind deployment along the U.S. Atlantic Coast, addressing gaps in previous analyses;

• Compare different transmission technologies and topologies, quantify costs, assess reliability and resilience, and evaluate key environmental and ocean co-use issues;

• Produce timely results to inform decision making and offer feasible solutions, data, and models that may benefit stakeholders in their own planning processes.

Prior Examples include Tufts University’s Offshore Wind Transmission and Grid Interconnection across U.S. Northeast Markets - OSPRE-2021-01

What is needed to build strong and diverse cleantech grid supply chains globally?

H.B:  A key enabler for building of long-gestation infrastructure like power grids will be to manage supply chains. Here we need to provide visibility and incentivize manufacturers to strengthen their footprint and boost capacities while continuing to leverage their global footprint. It has been estimated that global production capacity of clean energy technologies needs to triple for the ambitious expansion plans worldwide not to be thwarted by a shortage in key components such as wind turbines, cables, transformers, switchgear and HVDC equipment.  Some supply chain related challenges such as time delays, cost increases, scarcity and high concentration of many critical minerals and key components must be overcome to enable the timely build out of energy infrastructure.

There are several actions we can take today including developing holistic forward looking and integrated approaches for long gestation infrastructure like grids, moving away from single project approvals, standardization for speeding things up and optimizing costs.  We also need new business models where companies can optimize engineering resources through standardized solutions and also focus on their core competences, optimize resource usage. As a concrete example, HVDC technology providers focus on their scope and specialized firms provide the civil works and other infrastructure such as EPC services and offshore platforms in the case of Offshore wind projects. And finally, maintaining a healthy skills supply chain will be a key success factor.  

How can supply chains evolve to support the US goal of 100 percent clean electricity by 2035? 

D.A: The federal bills passed recently have a significant amount of support for the development of US supply chains and industry has responded quite rapidly.

For offshore wind, for example, announcements have been made for more than a dozen facilities and ports, and investments in a new fleet of vessels which are targeted to support the offshore wind industry.

DOE tracks announced investments at Investments in American-Made Energy | Department of Energy. 

In conclusion, when it comes to Net Zero, every country has its own starting point and will follow different pathways to the common destination based on their specific circumstances. It is clear that clean electrification will drive these journeys calling for the deployment of technologies at speed and scale. As a key enabler, we must ensure timely build out of power grid infrastructure to integrate renewables, interconnect systems and manage demand-supply complexities through digital solutions. At the same time, we must ensure a ‘just’ and ‘equitable’ energy transition - delivering value to society, environment and the economy - with a shared Purpose of advancing a sustainable energy future for all.