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Offshore wind advocates want better coordination on electric grid upgrades - Energy News Network

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The current project-by-project approach to electricity grid improvements will cost too much and potentially limit development in the future, companies say.

Offshore wind advocates say a more coordinated approach to electric grid upgrades in New England could save money and minimize ecological disruption.

Currently, developers pay for upgrading transmission lines to accommodate their projects, though that cost is ultimately shared by electricity customers. The price tag is expected to grow as the region adds as much as 40 gigawatts of generation to meet state renewable goals. That has some calling for a different, more planned approach to expanding the region’s electric grid capacity.

Gabe Tabak, legal counsel for federal regulatory affairs at the American Wind Energy Association, called it the “Field of Dreams” approach: If new transmission is built, developers will come.

“When transmission is planned like that … typically the cost allocation is more regional,” Tabak said, meaning it would be spread among ratepayers rather than shouldered by developers trying to interconnect.

A recent study by the Brattle Group, commissioned by transmission developer Anbaric, examined two scenarios: the current project-by-project approach where wind developers bid to build generation and associated interconnection lines, and an approach in which offshore and onshore transmission upgrades are developed independently of generation. In that case, generation developers would bid based on where transmission is available.

The study found that for a near-term scenario in which 3,600 MW of currently authorized and expected generation in the region are built, $4.4 billion would be required for onshore and offshore transmission upgrades in a project-by-project approach, as opposed to $3.9 billion under the planned transmission approach.

While the project-by-project approach may appear to offer lower short-term costs, the long-term overall costs are higher and carry higher onshore upgrade costs, the report said. Additionally, it said, the project-by-project approach risks reducing competition for transmission and generation, increased seabed disturbance, and poorer use of limited onshore points of interconnection.

The region could require as much as 40 gigawatts of new generation to meet states’ clean energy goals — the ISO-NE interconnection queue currently includes about 14 gigawatts of offshore wind. The region’s transmission system — onshore and offshore — isn’t equipped to handle the anticipated new load.

It’s long been known that some plan would be necessary for offshore wind transmission, but “a few years ago there was a sense that that’s a ways off,” said Peter Shattuck, a president at Anbaric who manages New England projects. This study highlighted that “we’re now there,” he said.

“A lack of focus on transmission poses an existential risk to the offshore wind industry,” Shattuck said. Without major upgrades to the grid on Cape Cod, for example, the current crop of projects planned there will face curtailments since the new generation will be unable to reach other demand centers.

ISO-NE has been studying interconnection needs for about 4.5 GW of offshore wind proposed on Cape Cod, 1.6 of which have been approved and are moving forward. In a recent report, the grid operator said new transmission would be needed in the area to accommodate new generation. But, the report said, “the ISO has also identified there will be a limitation on how much can continue to be added to Cape Cod without also adding very significant new transmission, beyond Cape Cod, to strengthen the connection between Cape Cod and the rest of the surrounding network.”

The current generator interconnection process works as long as there’s transmission capability nearby for the generators, Tabak said. “But at some point when all the available capacity is used up, the next generator after that has to pay for significant upgrades that may make the project uneconomical.”

Stakeholders in other parts of the world where offshore wind is further along have said a planned approach is necessary. In Denmark, a project-by-project approach led to a burdensome “spaghetti-like transmission scenario,” said Michael Behrmann, director of business development at Clean Energy New Hampshire and vice chair of an offshore wind commission convened by the state legislature.

Cost allocation is a major concern for developers, who have been pushing for regional grid operators to evaluate transmission upgrades more holistically: They say that by requiring developers to pay for grid upgrades, grid operators ignore the system-wide benefits and other development opportunities those upgrades will bring to the transmission system. The projects also become less feasible when they carry these extra costs.

Wind developers generally agree a planned “backbone” transmission system will be important in the long term. But many are also about to start building. Projects like the current Cape Cod turbines will likely be online before a large-scale plan can be implemented, and even more projects could further complicate planning. Plus the prospect of delays for new large-scale transmission in an already slow generation development process makes project leaders nervous they’ll have to wait longer.

“The grid operators and FERC [the Federal Energy Regulatory Commission] need to be able to balance the first round of projects … and ensure that they are able to come online on schedule,” Tabak said. “And at the same time, they need to telegraph very clearly any changes” to transmission planning like the implementation of a large-scale transmission backbone.

Behrmann agreed that the current projects will move forward under the one-off approach. But, he added, “we cannot move forward with that as an acceptable plan.” He said the New England states will likely have a key role to play in planning the new offshore-onshore transmission system in the region.

This consensus that change is needed comes amid larger questions about how states and regional grid operators can work together as offshore wind and other renewables ramp up. A recent vision statement issued by the New England States Committee on Electricity called for changes in transmission and market operations, as well as the overall governance of ISO-NE.

The document, which is the start of a longer-term effort by the states to reform regional operations, recommends ISO-NE conduct a long-term regional transmission planning process with participation by state leaders. It says the ISO should use the states’ analyses of decarbonization scenarios when assessing future transmission needs. This would bring ISO-NE more in alignment with the renewable goals of the states it serves, something critics say grid operators have often failed to do.

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