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Transmission Is Holding up California’s Clean Energy Transition (Part 1 of 3)


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This is part 1 of 3 posts on the roadblocks and bottlenecks California is facing in its transition to 100% clean energy. Read Part 2 about the interconnection backlog and Part 3 about permitting challenges. 

California’s grid now generates 28% of its electricity from solar and wind resources, up from just 14% in 2015. It’s a big step, but the pace of getting these resources on the grid still needs to be faster. With current electricity generation capacity at about 88 gigawatts (GW), California needs to add between 7 and 8 GW annually over the next 20 years to reach its clean energy goals. In the past four years, California has added an average of under 4 GW per year.  

The importance of achieving these clean energy goals cannot be overstated. Heat-trapping emissions from the power sector contribute to climate change and its devastating impacts, including wildfires and heatwaves. The state’s reliance on gas-fueled power has major public health and environmental harms that disproportionately impact communities of color and low-income communities. And a clean grid is crucial for other industries, such as transportation and buildings, to decarbonize. 

While much of California is on board with the goals of the clean energy transition, implementing this transition has been a more complicated matter. Getting clean energy projects online involves a broad suite of considerations, but three issues have emerged as significant barriers to the transition: the need for more transmission capacity; delays in the interconnection process; and permitting difficulties. Let’s talk about the first one. 

Transmission lines are the highways that move power from the source of generation to the demand centers. And like highways, they have constraints that determine the amount of power that can be safely and reliably moved. Grid operators generally dispatch the most economical power resources (e.g., renewables) first to meet demand, while also considering the different characteristics of resources (e.g., time to ramp up, fuel supply). Insufficient transmission capacity leads to congestion on transmission lines and uneconomical dispatch of resources. 

The transmission system hasn’t kept pace with the needs of the grid, increasingly becoming a barrier to getting more clean energy projects online. Transmission lines were initially built to connect large thermal power plants in far-off places to areas with high electricity demand. For example, Utah’s 1,900 MW coal-powered Intermountain Power Plant, which started operating in 1986, has a 500-mile Intermountain Transmission line connecting it to Southern California. Comparatively, renewable projects are smaller, more numerous, and more dispersed. And importantly, solar and wind resources, which are critical for the state’s clean energy plan, must be in areas with abundant sun or wind. The grid has lagged in sufficiently connecting to these areas, making it difficult to now bring these projects online. 

The California grid operator (CAISO) estimates the state will need $30.5 billion of transmission investments to meet the state’s 2045 Senate Bill 100 clean energy targets. While the cost has some sticker shock, these investments can improve affordability in the long run by bringing inexpensive clean energy online and ensuring the grid is reliable and safe. For a high electrification and net-zero emissions outcome, California will need to triple its transmission capacity by 2050. 

The state has acknowledged insufficient transmission infrastructure is a major barrier to bringing more clean energy projects online, but building new transmission takes time. The entire process for transmission development takes over a decade in California. CAISO’s Transmission Development Forum indicated that on average the time between CAISO approval and the start of construction is over seven years. Compared to other Western states, California has one of the slowest transmission permitting processes. And looking at timelines for major transmission projects in California, almost all have experienced big delays from their original intended in-service date. Even more difficulties arise in permitting and cost allocation when the state’s grid operator must coordinate with other jurisdictions to build transmission lines across the region. 

While building new transmission lines is very much needed, proper planning and coordination as well as upgrading the existing grid can also improve transmission capacity. Using a suite of solutions, California can move towards a transmission system for its clean energy future. 

Given the long timeframe for transmission development, strong transmission planning is crucial to ensure the grid can bring on enough clean energy projects to meet reliability needs and climate change goals. Luckily, California has more robust transmission planning processes than many other parts of the country. The state’s grid operator has a strong annual planning process for transmission, taking into account various needs such as grid reliability, cost-effectiveness, and clean energy goals over a 10-year period. It has additionally begun conducting a 20-year planning outlook for the grid’s longer term needs. 

A recent Memorandum of Understanding between CAISO, the California Public Utilities Commission (CPUC), and California Energy Commission (CEC) calls for more collaboration between the agencies for achieving the state’s clean energy goals. This can better align transmission planning with other energy plans, including the state’s resource portfolio and demand forecast. For example, the CPUC is passing along information on long-term changes in generation resources from its Integrated Resource Planning to be integrated into CAISO’s transmission plan accordingly. Stronger information coordination allows for more scenario analysis and the changes needed on the transmission system, which could help the state chart faster decarbonation pathways. 

Source: California Independent System Operator Draft 2022-2023 Transmission Plan

Building new transmission projects takes time, a limited resource as the state works towards its clean energy goals and reckons with climate impacts. Broadly, there are two buckets of solutions to increase transmission capacity: helping get new transmission built and better use of the existing transmission. 

Decreasing transmission permitting times is important for getting new lines built and helping reliably connect more clean energy projects. Transmission permitting can take particularly long as it tends to cross multiple jurisdictions and involves significantly more utilities, regulators, communities, landowners, and other stakeholders to come to consensus. A discussion of clean energy permitting reforms could be its own blog post, and so that’s what I’ve done in part 3

At a high level, reforms to streamline transmission permitting should focus on early partnerships with affected communities, and stronger process coordination. These efforts can reduce administrative hurdles and opposition efforts later in the process, helping move the process along more smoothly. 

Next, improving regional transmission coordination can optimize where to build transmission and help build consensus between states. The Western US has a much more fragmented power sector with mostly utilities acting as the grid operator compared to the East Coast and Midwest, where regional grid operators exist to coordinate larger sections of the grid. Increasingly, there have been more efforts in the West for regional collaboration, such as the Western Transmission Expansion Coalition (WestTEC) and the West-wide Governance Pathways Initiative to improve grid collaboration across the West. California should use these regional platforms to discuss issues of regional transmission planning, multi-jurisdictional permitting coordination, and transmission cost allocation. 

Addressing these issues collaboratively is critical to getting regional transmission built. Regional lines can improve grid reliability and cost-effectiveness by leveraging resource and demand diversity across states. For California, this could mean tapping into wind-abundant areas in Idaho and New Mexico, while also exporting excess solar power to other Western states. 

Lastly, alternative transmission financing structures could reduce the time transmission takes for development, as well as costs. For example, the California Public Advocates Office found that increasing the number of transmission projects that are eligible for competitive solicitation could achieve both of these goals. The state should explore how different transmission financing structures could speed up development. 

California can also work on improving the effectiveness of the existing grid by increasing line capacity, reducing the need to build new transmission. 

First, it could take advantage of advanced grid technologies. Advanced grid technologies and other upgrades can expand transmission capacity more affordably and on a much shorter timeframe than building new transmission. State legislative efforts are exploring these options to incentivize their adoption. The types of grid upgrades that could have significant impact on increasing transmission capacity are: 

Grid-enhancing technologies” include options such as dynamic line ratings and advanced power flow control. Multiple studies and pilots have shown the benefits of these technologies in improving capacity and reducing costs, although deployment in California remains limited
Reconductoring replaces the existing wires on transmission lines with advanced conductors, increasing the power capacity of these lines. A study found that reconductoring can double the capacity of transmission lines at a third of the cost compared to new construction. 

Second, non-wires alternatives such as distributed energy resources, demand response, and storage can reduce the need for more transmission. Distributed energy resources (e.g. rooftop solar) are much closer to demand centers and don’t require transmission lines to move the power across large areas. In a state like California with a high number of electric vehicles (EVs), smarter charging practices and EV batteries for storage can support the grid. And increasingly, the state is exploring programs that could incentivize customers to reduce electricity demand when the grid is stressed. Taken together, these solutions can improve reliability while reducing the need for large-scale generating resources and the associated transmission. 

The urgent need to bring more clean energy resources online has created growing pains for the outdated power grid. It won’t be an easy task, but increasing transmission capacity will be critical for California to achieve its clean energy goals. Moving forward, California must put in the effort and resources to work through the barriers in the clean energy development process. Legislators and regulators can fund and incentivize these reforms to systematically get clean energy projects online faster. If California can work through these issues, it will once again show the state’s leadership and commitment to the clean energy future. 

This is part 1 of 3 posts on the roadblocks and bottlenecks California is facing in its transition to 100% clean energy. Read Part 2 about the interconnection backlog and Part 3 about permitting challenges. 


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