Transmission Networks Funding

Bill Gates recently wrote about this issue, noting that “…while the costs for renewable energy are falling dramatically, the costs for new transmission infrastructure needed to move it around the country remain high.”  This issue can be traced back to the interconnection process – the process by which renewable energy projects are approved to be connected to the grid.  This process has become increasingly bogged down by speculators, who have filed thousands of requests for interconnection without any intention of following through on the projects and it has clogged up the system, resulting in long delays and an inability to deploy real projects.

At the same time, the US government has been taking steps to expedite the deployment of transmission across the US to support renewable energy.  In October 2020, the Federal Energy Regulatory Commission (FERC) issued a new rule aimed at streamlining the interconnection process and speeding up the review of applications.  This rule requires transmission providers to make an initial decision on an application within 180 days, and to resolve any disputes within one year.  Alongside this, FERC has created the Office of Energy Projects, which is tasked with monitoring the interconnection process and ensuring that applications are processed in a timely manner.

Furthermore, the US government is investing in transmission infrastructure to support renewable energy projects.  In December 2020, the Department of Energy announced a $3.3 billion investment in transmission projects, with the goal of increasing the delivery of clean energy across the country.  The funding is intended to support projects that improve the delivery of renewable energy from rural and remote areas to population centers, as well as projects that increase the resilience of the grid.

In addition, the US government has taken steps to reduce the cost of transmission infrastructure. In April 2021, the Department of Energy announced a $1 billion investment in transmission projects to reduce the cost of transmission infrastructure.  The funding is intended to support the development of more cost-effective transmission lines and innovative technologies, such as high-voltage direct current (HVDC) transmission lines.

Finally, the US government is working to address the issue of speculators slowing up the process. I n May 2021, the Department of Energy announced a new rule that requires applicants to demonstrate that they have the financial and technical capability to construct the proposed project before they can be approved for interconnection.  This is designed to discourage speculators from filing applications without any intention of following through on the project.

The US government is taking a comprehensive approach to addressing the issue of large-scale renewable energy deployment constrained by transmission network constraints.  These measures are designed to streamline the interconnection process, reduce the cost of transmission infrastructure, and discourage speculators.  If these efforts are successful, the US should be able to take advantage of the economic and environmental benefits of large-scale renewable energy deployment.