Editor’s note: This article is the Executive Summary from a white paper by Kiran Kumaraswamy, Ken Collison, Rakesh Maurya, Jamie Cotrone, and Matt Robison, all at ICF International Inc. A link to the complete paper is here: http://goo.gl/j6QK4b
Although regulators and industry stakeholders have begun to analyze how the CPP could affect the reliability of the power grid, relatively less focus has occurred on the specific issue of transmission security, a subset of overall system reliability that refers to the ability of the power system to withstand sudden, unexpected contingencies. Transmission security is worth paying attention to: The CPP is likely to augment some trends that are already occurring in the marketplace, specifically the recent wave of coal unit retirements and penetration of renewables and distributed generation. These changes could cause new transmission flow patterns that, if not addressed appropriately, will result in line overloads and wide variations in substation voltages. The reliability of the bulk electric system could be compromised.
ICF has modeled these effects and developed for the first time an estimate of the national impact of the CPP from a transmission security perspective. We estimate conservatively that the changes caused by the proposed Clean Power Plan will drive a need for at least $1.5 to $2.5 billion in added investments to address transmission security issues, much of it by 2020. This level of investment is less than 3 percent of the national five-year capital expenditure on transmission and is therefore easily manageable in pure dollar terms. However, the timeline to build the needed infrastructure will pose a relatively greater challenge, one that will be met if and only if stakeholders are proactive in finding where specific needs will occur and act quickly to develop the appropriate solutions. In fact, in the competitive transmission environment, those who are proactive could garner a first-mover advantage and realize an added opportunity above and beyond the level of investment in transmission that will occur at baseline during the next 5 to 10 years, regardless of the final form of the Clean Power Plan.
The Bottom Line
- The Clean Power Plan (CPP) is likely to drive significant retirements and changes in generating resource mix and dispatch patterns that will alter transmission flows and could impact overall system reliability.
- Focusing only on transmission security, we estimate that the United States will require at least $1.5 to $2.5 billion in transmission grid investments to maintain grid reliability. This amount is well within historical levels, but the timeline for planning and constructing new infrastructure is a relatively greater challenge.
- Transmission infrastructure will be important for CPP’s successful implementation and presents an investment opportunity. To identify and ensure timely development of the appropriate portfolio of solutions, stakeholders must start their analysis and planning as soon as the rule is final.
Filed Under: News
