This opinion piece is a part of a collection from Vitality Innovation’s coverage consultants on advancing an inexpensive, resilient and clear power system.
The facility and fuel system is quickly altering from assembly comparatively predictable buyer demand with fossil fuels, to managing more and more frequent excessive climate whereas integrating unprecedented quantities of fresh power. State utility regulators try to navigate this transition by guiding their electrical and fuel utilities to cut back emissions whereas sustaining inexpensive charges and dependable service.
This stress captured regulators’ consideration on the Nationwide Affiliation of Regulatory Utility Commissioners’ (NARUC) 2022 Winter Coverage Summit final week, manifesting in three imperatives: transmission planning to unlock entry to low-cost renewables, holistic approaches to planning for system reliability within the wake of final February’s Winter Storm Uri, and alternatives to cut back emissions from pure fuel methods.
Summit panelists highlighted near-term actions regulators can take to information an inexpensive and dependable clear power transition, similar to integrating grid-enhancing applied sciences (GETs) to spice up capability on current transmission traces, prioritizing demand-side measures in reliability planning, and plugging fuel pipeline methane leaks.
However, to advance these imperatives over the long run, regulators should additionally ask their workers and utilities how they plan to collaborate to construct new interstate transmission traces, design new useful resource adequacy metrics, and obtain absolutely decarbonized power methods with out going through expensive dead-ends. Beneath we share our prime takeaways from the convention, together with our suggestions for policymakers and utilities to attain these objectives.
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Transmission buildout requires long-term planning, however short-term options present quick congestion reduction
Accelerating transmission buildout is among the most vital steps towards affordably integrating renewables onto the grid, and NARUC panelists urged motion to beat obstacles like value allocation, long-term planning bottlenecks, area people opposition and prolonged environmental critiques. Several Federal Vitality Regulatory Fee proceedings and U.S. Division of Vitality (DOE) initiatives intend to plan for and construct interregional transmission. However these efforts will take time, and with tons of of gigawatts of renewables already caught in interconnection queues across the nation, gridlock should be addressed now.
GETs are probably the greatest short-term instruments for growing transmission capability. On the convention, David Townley, director of public coverage at CTC World, stated “re-conductoring” is the “quickest, lowest–value means so as to add substantial capability to the present system.” This course of replaces current typical metal core traces with lighter–weight conducting supplies, can add 50-100% extra capability to traces, and could be accomplished in as little as 18 to 24 months. Research discover that different GETs, similar to dynamic line rankings, superior energy movement management, and superior topology management, also can have a big affect, collectively increasing the renewable potential of the Kansas and Oklahoma grids, for instance, from 2,600 MW to five,200 MW.
Regulators ought to ask utilities how they intend to combine these low-cost, readily-available applied sciences into their transmission planning and interconnection processes. The recently-signed Infrastructure Funding and Jobs Act added $3 billion to DOE’s Good Grid Funding Grant Program. As DOE begins distributing these funds as part of its Constructing a Higher Grid Initiative, state utility stakeholders ought to have interaction within the solicitation design course of and encourage utilities to use for this funding.
Regulators and utilities also can tackle transmission congestion by utilizing current rights of means. Many states are already siting traces alongside highways and railroads to streamline new transmission buildout, and the Federal Freeway Administration has inspired this course of. As a result of siting transmission alongside rights of means requires collaboration amongst many various companies, regulators ought to begin by forming intergovernmental partnerships to extend communication with state transportation departments.
Winter Storm Uri was a wake-up name for regulators
Quickly increasing transmission capability can even help grid reliability, which, in accordance with NARUC panel discussions, is clearly nonetheless weighing on regulators’ minds following Winter Storm Uri. Regulators and grid operators have lengthy measured electrical system reliability by evaluating energy technology capability to anticipated peak demand, requiring a sure “reserve margin” to guard towards unusually excessive demand or generator outages. Nonetheless, panelist feedback counsel Winter Storm Uri has shifted how regulators are enthusiastic about reliability, focusing extra now on demand-side measures, the necessity for brand spanking new reliability metrics, and the interconnectedness of electrical and fuel methods.
First, reliability planning ought to focus way more on demand-side measures. Vitality professional Alison Silverstein stated her report card grading Texas’ response one 12 months after the state’s multi-day outages harassed power effectivity as “the only best and low-cost method to shield Texas electrical prospects and its grid towards the prices and dangers of energy system growth and failure.” Vitality Innovation analysis on Winter Storm Uri additionally demonstrates the worth of demand-side motion, together with updating constructing codes and supporting house weatherization.
Second, regulators ought to direct their workers to design extra refined reliability metrics that account for a altering local weather and useful resource combine, acknowledging that the previous is now not a great predictor of the longer term. Silverstein stated figuring out the prudency of utility investments ought to heart on judging them towards potential future circumstances reasonably than more and more much less related historic baselines. Organizations just like the Vitality Programs Integration Group are main this effort by designing new approaches to useful resource adequacy that depart from static reserve margins to as an alternative facilitate energy technology portfolios able to assembly load in each hour of the 12 months.
Third, regulators should confront the interconnectedness of electrical and fuel methods to make sure dependable energy. Former Chair of the Public Utility Fee of Texas Robert Gee famous pure fuel comprised 40% of Texas’ energy technology, however 45% of this capability was quickly unavailable throughout Winter Storm Uri. NRG Vice President Travis Kavulla additionally famous fuel sellers have comparatively opaque contracts, permitting them to say they can not fulfill fixed-price agreements, solely to promote fuel to different consumers at a lot increased costs throughout reliability occasions (termed “worth majeure“). State legislators and utility regulators ought to enhance coordination between electrical and fuel stakeholders and maintain them to comparable requirements. In Texas, for instance, energy plant winterization efforts are underway, however parallel efforts to winterize pure fuel wellheads and pipelines haven’t progressed apace.
Fuel system transition planning appears to be like to gas replacements
Along with winterization to guard towards excessive climate, regulators want to tackle the foundation reason for local weather change by fuel system decarbonization, however they should be cautious about proposals that won’t show viable over the long run.
Fuel utilities topic to emissions discount necessities are exploring rapid actions for methane leak discount by monitoring and pipeline restore. Nonetheless, many are additionally eagerly proposing renewable pure fuel (RNG) and hydrogen as a part of their longer-term decarbonization pathway.
NARUC panelists mentioned the potential of near-term uptake of “licensed pure fuel” with verified low-methane emissions depth to plug methane hemorrhaging from the fuel provide chain. Panelists from the utility Washington Fuel and fuel producer EQT each highlighted the minimal value affect of switching to licensed pure fuel, however regulators ought to ask their utilities how they’ll obtain close-to-zero methane emission intensities whereas exploring bigger transition pathways.
Nonetheless, RNG useful resource availability has so far been restricted, and widespread RNG reliance will not be scalable. Whereas GTI Vitality promoted hydrogen as a fixture of a decarbonized fuel system, hydrogen manufacturing can nonetheless generate sizable emissions relying on the manufacturing technique. Value impacts and challenges round scalability, pipeline and end-use equipment compatibility, and security additionally require extra regulatory scrutiny earlier than important investments are accredited. Regulators should decide the feasibility and decarbonization potential of those proposals by requesting in depth info on whole provide chain emissions and the way they evaluate on value and emissions bases to different end-use decarbonization methods like electrification.
NARUC discussions didn’t cowl bigger paradigm-shifting questions round how constructing electrification — which has gained momentum in states together with Colorado, Illinois, Minnesota and Washington — could affect future fuel demand. Regulators ought to ask utilities how long-term methods for optimizing decarbonization, reliability and affordability could shift the kind of gas provided for various power wants throughout fuel and electrical methods.
Aligning rapid and long-term wants for local weather
Regulators are grappling with rapid wants surrounding interconnecting renewables and more and more frequent storms inflicting outages. They’re additionally concurrently being requested to plan for large-scale gas-system decarbonization that features the potential for brand spanking new fuels, elevating questions of feasibility and emissions discount potential.
Fortuitously, near-term options together with GETs, demand-side measures and plugging gas-system methane leaks present pathways for progress. On the identical time, regulators should additionally critically look at any decarbonization proposals to find out if they’ll truly meet their meant objectives reasonably than depart prospects with increased prices — and few emission reductions.