Transmission has long been considered a key missing piece of the clean energy transition. While wind and solar growth has rapidly accelerated over the past decade, there has been very little investment in much-needed transmission upgrades that could lower costs for customers, deliver renewables from remote areas to load centers, and support increased reliability and resiliency as extreme weather events increase in frequency. Studies have repeatedly demonstrated that enhancements to our transmission backbone are essential to meeting our decarbonization objectives and that these upgrades would provide system benefits that far outweigh the costs of these investments.
However, it has proven difficult to get new large-scale transmission projects approved and built for a number of reasons, including but not limited to siloed planning processes, a focus on just-in-time asset condition replacements, and challenges in both the evaluation and allocation of costs and benefits across regions and communities. Additionally, while the urgency of building new transmission is increasing, transmission planners across the country have indicated that they cannot remember a time with as much uncertainty as their regions are facing today. Long-term planning is growing increasingly complex, as many regions are experiencing a combination of rapid load growth, significant increases in weather-dependent generation resources like wind and solar, increased frequency and intensity of extreme weather, and higher levels of economic, technological, and policy uncertainty.
E3 believes that 2024 was an inflection point in overcoming many of these challenges, with transmission investments poised to grow in the coming years and decades. Three key areas stood out as critical advancements in the sector:
- Improvements to transmission planning and evaluation frameworks;
- Adoption of new methods to address heightened uncertainty; and
- Consideration of advanced transmission technologies
Improvements in transmission planning and evaluation
In its 2024 National Transmission Needs Study, the Department of Energy provided the most comprehensive assessment to date of the benefits of interregional transmission in enhancing grid reliability, improving resilience to extreme weather, and lowering the costs of the clean energy transition, joining a chorus of prior analyses. Despite the significant benefits, few, if any, interregional transmission projects have been built in recent memory. To address this disconnect, E3 partnered with the National Association of Regulatory Utility Commissioners (NARUC) to write a report confronting the barriers to interregional transmission.
In its report with NARUC, E3 categorized the challenges faced by interregional transmission across three areas (Figure 1) including: planning — the process of identifying transmission projects, assessing their technical and economic viability, approving cost allocation, and awarding development rights; permitting — the siting and permitting processes which are generally conducted by state regulatory agencies; and operations — the frameworks under which capacity on interregional transmission is allocated and optimized in the delivery of electricity. E3 then identified potential solutions to each set of challenges as well as the relevant actors that could take steps to implement these solutions.
In addition to its work with NARUC evaluating key process improvements for interregional planning, E3 also was excited to have the opportunity to directly analyze the impacts of the Clean Resilience Link, a proposed interregional transmission project between New York and New England, on behalf of National Grid.
The Clean Resilience Link represents a series of upgrades along the New York-New England interface, and E3, in collaboration with Hitachi Energy, performed detailed modeling to assess the impacts of the upgrades under multiple scenarios that aligned with state policy achievement across the Northeast. The resulting upgrades would increase interregional transfer capacity by up to 1 GW, leading to more efficient system dispatch and reduced congestion, lower renewable curtailment, and both monetary and emissions benefits over the project’s lifetime. Moving beyond conceptual interregional upgrades and into practice, our team’s comprehensive assessment of a concrete set of upgrades along the New York-New England interface found that the Clean Resilience Link could provide significant net benefits for the Northeast U.S. The project can also serve as a model for the identification of multi-value projects in which asset condition upgrades are “right-sized” to maximize future system benefits.
There has also been action at the federal level to try to improve regional and interregional transmission planning processes. In May, the Federal Energy Regulatory Commission (FERC) released a new rule, Order 1920, which included guidance intended to enhance regional transmission planning in anticipation of future transmission system needs. Order 1920 outlined seven categories of benefits that transmission providers could consider when evaluating transmission projects. E3 has been at the forefront of developing benefit-cost frameworks for transmission evaluation for decades, and applauds FERC’s actions to establish a common set of benefit metrics for consideration. The benefits outlined in Order 1920 are a critical first step, and E3 has also recommended that planners consider a broader range of benefits, such as utilization of existing right-of-ways, reductions in renewable curtailment, and increased operational flexibility (Figure 2).
E3’s work for the Electric Reliability Council of Texas (ERCOT) included a comprehensive review of economic benefit tests for transmission used across North America as well as in Australia and Ireland. Our report for ERCOT details the commonalities and differences in economic benefit tests used across the 10 jurisdictions reviewed and provides recommendations for how ERCOT can incorporate metrics with clear linkages to customer savings within the region while also aligning well with key features of the ERCOT market.
New methods to evaluate investments amidst uncertainty
Transmission planners across the country are grappling with how to conduct complex transmission planning processes while addressing heightened uncertainty facing the industry. In partnership with the Midcontinent Independent System Operator (MISO), E3 co-hosted a symposium that brought together representatives from RTOs, utilities, and experts from national labs and academia to discuss new analytical techniques such as adoption of probabilistic methods that can address increasing complexity and help ensure a reliable, clean grid of the future. E3 will be releasing a white paper that summarizes key themes from the symposium as well as additional research on applications of probabilistic methods in transmission planning this spring.
In addition to examining emerging analytical methods to address key sources of uncertainty within an individual modeling framework, our work with MISO and others has consistently highlighted the value of enhancing the coordination between planning frameworks. There are inherent tradeoffs with integrating additional complexity to capture linkages between modeling frameworks; balancing these tradeoffs and capturing the most critical interactions to ensure a cost-effective and reliable system are the subject of Integrated System Planning. E3 supported Salt River Project in creating a first-of-its-kind Integrated System Plan, and we are building on this foundational work to support utilities and system planners across the country in the development of coordinated generation and transmission planning processes.
Consideration of advanced transmission technologies to meet transmission system needs
The industry also continues to make significant progress in extending evaluation frameworks to consider a wide range of solutions beyond conventional transmission upgrades. Advanced transmission technologies (ATTs), which include both hardware and software solutions, have the potential to rapidly and cost-effectively unlock significant additional capacity from the existing grid.
In July, E3’s transmission experts joined the Massachusetts Federal and Regional Energy Affairs (FREA) Office in a forum to discuss opportunities to accelerate the deployment of ATTs in New England.
E3 also had the chance to focus on a specific advanced transmission technology, examining use cases for storage-as-transmission in New York State. In support of National Grid’s response to the New York Public Service Commission, E3 found that utility-owned storage assets are well-positioned to provide key non-market benefits such as congestion management and curtailment reduction, facilitating the integration of renewable energy to meet New York’s policy goals. Additionally, because of their ability to potentially receive cost recovery for these assets, utilities can site and operate storage assets to specifically fulfill key transmission functions, including potentially building assets in advance of system needs in areas with high renewable potential, helping to “unbottle” future renewable projects and ensure that the clean energy output can be delivered to customers.
Looking ahead
E3 believes that 2024 was a pivotal year for transmission and it will be critical to accelerate this progress in 2025 and beyond. E3 looks forward to continuing to provide support to our diverse mix of clients across the transmission landscape, which include regional transmission organizations (RTOs), transmission owners, developers, and state agencies as they navigate this era of heightened uncertainty and complexity. By building on the momentum of recent years, E3 believes the industry will be well-positioned to strengthen our transmission infrastructure at the pace and scale necessary to meet increasing demand reliably and affordably, improve system resilience, and facilitate continued clean energy growth.
For questions or comment on E3’s work in transmission, please contact lakshmi@ethree.com.
