Linda Apsey, President and Chief Executive Officer, ITC Holdings Corp
We are at the dawn of a new era for how electricity is created, delivered and consumed in our society. The rapid expansion of renewable energy, the deployment of new distribution and storage technologies, and ever-increasing ways Americans are using electricity are among the issues that utilities are wrestling with in this emerging energy landscape—all through the lens of corporate sustainability.
Technology is driving this disruptive change, as it historically does. And the legacy technology that makes this all work is the high-voltage power transmission system. That’s right, electric transmission infrastructure enables our modern society and its energy-intensive innovations. Like other vital infrastructure, the power grid requires modernization to keep up with our demands, including the following key developments.
Changing energy mix: Today, more than one-third of our electricity comes from carbon-free sources (including nuclear energy, hydropower and other renewables). Since 2005, the percentage of renewable sources in the energy mix has quadrupled, according to the Edison Electric Institute (EEI).
Electric transmission infrastructure is facilitating the transition to renewable energy by connecting those resources over long distances into the greater grid. The way to capture the benefits of an ambitious large-scale transition to renewable energy is to first build the transmission systems that can carry that energy from typically distant locations to population centers. When you think about it, nearly every renewable generation scenario requires the transmission grid to unlock that waiting energy.
In addition to the major shift toward renewables, different technologies are being developed for unique applications in this changing energy picture. Smart planning around these technologies in concert with transmission planning can help provide a smooth transition to a more resilient, secure and affordable energy future. Let’s have a look.
"Energy storage, working in harmony with transmission infrastructure, will increasingly facilitate the integration of renewable resources such as wind and solar into the electric grid by keeping supply and demand balanced at all time"
Distributed generation and microgrids: There’s much interest today in microgrids, distributed energy resources and other non-transmission alternatives. These technologies are best viewed as a complement to grid infrastructure rather than a replacement because they typically provide only a partial suite of the services that a central electric grid delivers and usually are limited to very specific and local needs.
Storage technology: The expansion of variable energy resources and declining storage technology costs have brought increased attention to storage to address the expected challenges of energy supply and grid stability related to the growth in renewable energy. Energy storage, working in harmony with transmission infrastructure, will increasingly facilitate the integration of renewable resources such as wind and solar into the electric grid by keeping supply and demand balanced at all times. Storage technology developed at the transmission level can capture multiple value streams such as operational flexibility, market services, frequency regulation and resource adequacy which can maximize benefits to customers.
Electric vehicles: We must prepare for the exponential demand for electricity posed by electric vehicles. The presence of EVs on U.S. roads is expected to accelerate from the current 1 million to 19 million by 2030, according to EEI and the Institute for Electric Innovation. That’s only about a decade from now. Prudent planning and investment are required of utilities in the near term to handle this massive new demand—especially considering the long-lead time involved in building supportive new transmission capacity.
The platform—a modern transmission grid: The technology platform on which all vital infrastructure and new energy technologies rest is the transmission system. In addition to its traditional job of powering our economy, today we are asking the grid to balance variable and traditional sources of energy, be more resilient against severe weather and resist cyber and physical attacks. Against this backdrop, we have a transmission system in this country that was largely built in the 1960s and 1970s without today’s demands in mind. In its latest assessment of infrastructure investment trends, the American Society of Civil Engineers Infrastructure Report Card gives the energy grid a D+ rating.
We need a new collective mindset about how the bulk power system is planned, built and managed to address our current and future needs. Whatever the energy future may bring, a modern transmission network is needed to provide the optionality to facilitate that future and the related needs of customers. As numerous studies have shown, investment in transmission consistently delivers many times its cost in economic and reliability benefits to consumers.
Federal action can help jump-start the construction of new transmission lines within and between regions of the country that today remain highly separated electrically. The Federal Energy Regulatory Commission (FERC) has said that Order 1000 procurement processes are not accomplishing the stated goal of producing these needed regional and interregional projects. This is an opportune moment for FERC to review how best to stimulate grid investment and who is best positioned to do it. Absent a broader federal energy policy, FERC is being challenged to address these complex issues that require collaboration at the state, federal and industry levels to ensure the future grid is designed to meet customer needs and market demands.
Our industry is at a crossroads, and as we continue these important conversations about ways for making, moving and using electricity in a sustainable way, we need to ensure it remains safe, reliable and cost-effective for consumers. The nation’s backbone electric grid must be viewed through the lens of facilitating all other vital infrastructure and supporting emerging technologies that complement the grid.