Down to the wire: Biden’s green goals face a power grid reckoning

New transmission lines would play a key role in carrying wind and solar power across the country to replace electricity from coal and natural gas. That makes them crucial to achieving Biden’s goal of eliminating the power sector’s net greenhouse gas pollution by 2035.

Additional lines would also allow different regions to share power in times of crisis, including extreme weather driven by climate change, and could lower electric rates by reducing congestion on the grid. The extra capacity on the grid could also enable a massive switch to electricity-powered cars and home heating.

Biden has articulated elements of his vision of a green grid: In a speech on his major infrastructure package last week, he promoted a tax credit for transmission projects that has developers salivating, and he announced an office at the Department of Energy dedicated to easing government approvals of new lines. He got an assist Thursday from Sen. Martin Heinrich (D-N.M.), who reintroduced a bill that would offer an investment tax credit for long transmission lines.

But members of the Federal Energy Regulatory Commission and other key players say daunting challenges exist, including the decade or more it takes to plan and build the projects, as well as a short-term mindset among local grid operators.

“Transmission is one of the longest lead time components of the clean economy,” FERC Commissioner Allison Clements, whose agency has jurisdiction over the grid in most parts of the country, told POLITICO. “We need to start yesterday.”

Many of the high-voltage power lines carrying electricity into cities were built decades ago on a model geared toward moving electrons from enormous coal, hydroelectric, and nuclear plants. Those lines are old and need refurbishment, and the coal and nuclear plants they once served have been retiring rapidly. Where once half of U.S. power came from coal, it is now down to 18 percent.

Utilities have been increasing their investment in upgrading their existing networks, according to DOE’s Energy Information Administration, but those regional wires won’t achieve Biden’s targets. To accommodate the renewable grid and electrification of the economy, the U.S. will need to ramp up transmission spending from an annual average of $15 billion to $40 billion a year from 2030 to 2050, according to a 2019 report by the Brattle Group for WIRES, a transmission developers trade association.

Biden seeks to make a down payment on that process.

“My American Jobs Plan will put hundreds of thousands of people to work — hundred of thousands of people to work — line workers, electricians, and laborers — laying thousands of miles of transmission line; building a modern, resilient, and fully clean grid,” he said last week.

But building long transmission lines has been hampered by what developers call the “three P’s”: planning, permitting, and paying for it.

“These long-haul transmission lines, they take eight to 10 years to build,” said Lauren Azar, a transmission expert, former DOE adviser and former Wisconsin state commissioner. “And we as a nation don’t even have the right planning processes right now to identify the right transmission that is needed.”

Money is only a part of the problem. The developer Clean Line Energy Partners spent 10 years trying to construct five direct current lines, each hundreds of miles long, from the Midwest and Sunbelt into nodes in the East and West. The project collapsed amid opposition from states and localities that moved to thwart the project’s permits and force it into longer, more expensive routes. Opposition included doubts that the long lines would deliver any benefits to local communities, objections to renewable power and concern that the lines would interfere with scenic vistas.

Activists in New England have similarly spent years opposing a nearly billion-dollar transmission line that would carry hydropower from Quebec to Massachusetts via Maine, expressing concerns about its environmental and scenic impact.

Advocates hope they can take a more collaborative approach and persuade communities to accept new lines.

“Every study discusses benefits of transmission lines, but it’s pretty esoteric,” FERC’s Clements said, adding that “people are smart. If you explain the facts in English, they understand why this is an important need and investment the country should take on.”

A grid that is focused on moving renewable energy and providing resiliency against extreme weather will look fundamentally different from the one intended to move power from large plants to cities.

For one thing, many renewable power sources will need to extend to parts of the country where little electrical transmission infrastructure exists. These kinds of connections can spur the development of new renewable projects, much as Texas’ Competitive Renewable Energy Zones project, which built 2,300 miles of new lines between 2008 and 2014, spurred the development of wind energy in that state.

In addition, the new lines will need to connect different parts of the balkanized U.S. grid to allow smoother exchanges of power to provide insurance against crises.

But few regions — the grid operator in the Midwest being a notable exception — use a decade long-range forecast to plan their transmission projects. FERC Chair Rich Glick has said he intends to make transmission planning and incentives a priority for his agency, but the commission has not yet launched a formal process, and it pulled a set of new incentives from its agenda in January.

Depending on the region, the responsibility for building and paying for transmission lines typically falls on the regulated utilities that own much of the grid, or it is delegated to independent power developers — although electricity customers ultimately foot the bill. FERC approves interstate transmission line work and evaluates rates, while programs such as DOE’s Advanced Research Projects Agency–Energy support research into early-stage technologies.

An investment tax credit for long transmission lines like the one Biden promoted could help ensure that independent developers have the cash to start construction, according to Greg Wetstone, CEO of the American Council on Renewable Energy, a clean energy business group. While utilities can bill customers for their investments in overhead wires, independent developers have to find their financing on the market. The developers can eventually turn a profit by buying cheap wind power in the Midwest and selling it in larger urban areas with higher power rates, but they need the initial funding to start building.

“Getting that capital together is very difficult without some form of certainty that there’s going to be capital to get the project started,” Wetstone said. “So proposals to create a tax credit for high voltage transmission has the potential to make a huge difference.”

Americans for a Clean Energy Grid, a coalition of transmission developers, renewable energy companies and clean energy advocates, says the credit will be crucial.

“The transmission tax credit and other policies in the Biden infrastructure plan will enable a couple dozen large scale transmission projects to move forward in the near term,” Rob Gramlich, executive director of ACEG, said in a statement. “The biggest barrier to large scale transmission, even more than siting and permitting, is that there is currently no functioning way to recover costs of the large scale interregional ‘highways’ that we need, through electricity rates or otherwise.”

To solve the permitting problem, Biden proposed the creation of an office inside DOE that would try to run transmission lines along federal rights-of-way near interstate highways and railroads.

“Upgrading our electric transmission system is essential to moving cheaper, cleaner power to American homes and achieving the Biden Administration’s goal of 100% clean electricity by 2035,” a DOE spokesperson said in a statement. They also said the plan would also “create jobs and demand for American-made building materials and parts.”

The office could also help coordinate interagency approvals for environmental reviews, which can take years to complete. In a January executive order, Biden ordered the White House Council on Environmental Quality to find ways to speed reviews of clean energy projects.

DOE also has loan guarantee authority it can use to back transmission projects. DOE backed the 235-mile One Nevada Line in 2011 with a $343 million loan guarantee.

But while advocates hope carrots and communication will be enough, the administration has some sticks at its disposal. The 2005 Energy Policy Act gives DOE the authority to designate parts of the country as National Interest Electric Transmission Corridors. Developers seeking to build in those areas could apply to FERC for a federal permit much as natural gas pipeline developers do. DOE tried to exercise this authority in 2007, but the 9th U.S. Circuit Court of Appeals vacated the corridors in 2011 on procedural grounds.

However, the authority still exists. FERC and DOE have generally demurred on whether they’ll put this authority to work, but observers say the tool could be used to bring people to the table.

Rep. Sean Casten (D-Ill.), a former energy developer, would like to see FERC get “backstopping authority” to permit transmission in much the same way it can permit natural gas pipelines, but he doesn’t think there’s support in his own party for that.

“The most important thing we can do to deploy transmission resources is remove regulatory barriers — these lines are valuable assets and you should have the private sector lining up to invest,” he told POLITICO. “Federal incentives can obviously help in that, too.”