The transmission system must modernize and expand to meet the demands of the 21st Century. Indeed, the growth of artificial intelligence, data centers, and electric vehicles — powered by green energy — means the country must at least double regional transmission capacity.
That’s why the Federal Energy Regulatory Commission (FERC) voted 2-to-1 Monday to modernize the nation’s long-distance high-powered transmission policies — geared to meeting the Biden Administration’s decarbonization goals and to harden the grid to withstand extreme weather that could wreak havoc on local economies.
The changes have multiple ramifications: It will help with backstop authority—or the ability to build transmission when progress slows. Over the next decade, it will lead to considerably more renewable energy and noticeably less coal-fired power. For both reasons, litigation will abound, although the regulatory commissioners considered that before approving the new policies.
“We could see renewables finally pass 50% of the generation grid capacity in ten years,” Fox Swim, solar industry researcher for Aurora Solar, told me. “One of the complaints about renewables is that the U.S. grid cannot manage intermittent energy. That doesn’t mean we can’t build a grid to handle that. This ruling will let regional authorities make the network more renewables friendly and increase grid stability.”
FERC has been working on this rule-making for two years. Building transmission is the most demanding infrastructure project. For starters, the engineering behind it is nothing short of miraculous. However, those projects are expensive to construct and impossible to site across multiple states. Investors are, therefore, turned off; they seek more immediate returns.
FERC set out to remove some of the obstacles. Every five years, transmission owners meet to get on the same page — to determine what will be needed, where, and when. The goal is to think 20 years out. Currently, 260,000 megawatts of power generation are waiting to connect to the U.S. grid — more than double the amount of the current fleet of power generators. Ninety-five percent of the generation in the queue is solar, wind, and battery storage, according to the Lawrence Berkeley National Laboratory.
“The ruling makes it easier for power to move from far away places to cities that need more electricity,” says Swim. That bodes well for wind and solar, which must often get wheeled from rural to urban areas and across state lines. “I don’t know that this ruling is the final nail in the coffin for the coal industry, but it’s certainly a solid smack on that nail.”
FERC’s primary mandate centers on grid stability and ensuring the system can withstand Mother Nature. Under the new regiment, regional transmission operators will cooperate and implement a cost distribution mechanism. The logic is that everyone must ensure network stability—the core of American commerce. We all benefit from the reliable and clean delivery of power.
FERC also revised its backstop authority. That means the feds can intervene if the states fail to push through vital — log-jammed — projects. “FERC’s backstop siting rule will help ensure that no one state can veto transmission lines that are in the general interest of the nation,” says Cullen Howe, senior advocate for the Natural Resources Defense Council.
“Some have suggested that these provisions are fodder for litigation, but I strongly disagree,” added FERC Commissioner Alison Clements. “We’ve seen in other contexts that early and effective landowner and community engagement improves project outcomes and avoids unnecessary controversy.”
U.S. regulators are committed to cutting CO2 levels by 40% by 2030, using a 2005 baseline, and to carbon neutrality by 2050. The good news is that wind and solar prices are falling drastically, leading to an onslaught of clean generation coming to market. The Rocky Mountain Institute found that the cost of solar fell by 80% from 2012 to 2022.
According to the U.S. Energy Information Administration, renewables represented 21% of the U.S. electric generation pie, while coal comprised 16% last year. The same agency said that solar and battery storage will make up 81% of electric generation capacity in 2024. Plant owners will add 62,800 megawatts this year—55% more than last year.
Last summer was brutally hot. Luckily, renewables did the heavy lifting, keeping the lights on and the rates reasonable. Wind and solar will continue to grow, requiring more long-distance, high-powered transmission lines. As a result of FERC’s decision, our network will become more sustainable and resilient against extreme weather events — and more fit to handle massive amounts of data.
“Renewables have kept prices low during a really hot summer,” Rudy Garza, chief executive of San Antonio-based CPS Energy, told me last August. “This transition is going to happen whether you like it or not.”
That’s FERC’s rationale for implementing the most far-reaching transmission policies in years — a win for consumers and the American economy.
Renewables Will Skyrocket Under New Transmission Policies (forbes.com)