Since recently attending the AWEA Transmission workshop in Omaha, NE last week, I’ve been thinking a lot about the technical struggles of implementing a national Renewable Portfolio Standard. In past posts, I’ve focused primarily on the policy behind an RPS while glancing over the application of such policies. This workshop brought to light some issues that I’d like to highlight.
First and foremost, developers are encountering a lot of resistance from Regional Transmission Organizations and Independent System Operators (RTO’s and ISO’s) when it comes to linking their projects into the utility grid. On a very basic level, the issue is cost allocation and who pays for the transmission upgrades and/or additions. Since FERC has not made any nationwide stipulations, developers are running into inconsistencies that are leading to an unprofitable development environment. One quote that I really liked from the conference was “We have an antiquated grid run by antiquated business practices”. How then can the people, government, or utilities expect developers to take on a project in such an environment? I guess it’s fair to say that it is currently profitable, but I worry that if this continues, along with miles of other red-tape, profits will decline and the U.S. will be so far behind the rest of the developed world that we wont be able to catch up in an economically advantageous way.
Additionally, one speaker addressed the time required for an average interconnect approval. She put up some graphs for the audience to see which showed historical average lengths of applications and it was astounding. The time frames ranged from about 200 days up to over 700 days. Again, these are averages among the various RTO’s and ISO’s, so actual time frames were even longer for many projects. With this being the case, developers are almost required to put in speculative applications for interconnection since the approval process can take as long as two years. Furthering the idea of antiquated business practices in the electricity transmission arena.
However, it wasn’t all doom and gloom. FERC Commisioner Cheryl LaFleur had some great things to say about the advances in transmission infrastructure as well as some great ideas for further development. One of the most encouraging was the statement that determining cost allocation for transmission upgrades and additions is a FERC priority. This leads me to believe that within the next year or two we might have some structure to the process which could potentially lead us to reform the business processes involved. As a takeaway, there are many different barriers for developers and wind plant owners, but the process is only getting smoother, easier, more cost effective, and more profitable for all parties involved. So as we move toward a national RPS, I am confident that our country will be able to support the development of a larger, stronger grid no matter where we need to build; after all, in the end it all leads to a stronger economic system.
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