The following commentary was written by Brian Gemmell, chief clean energy development officer at National Grid. He is a member of the WIRES Board of Directors. See our commentary guidelines for more information.
As the nation strives to bring about an economic recovery following the recession brought on by the COVID-19 pandemic, a targeted investment in our electricity transmission system presents an opportunity to advance our nation’s fight against climate change, and concurrently create hundreds of thousands of green jobs.
In an announcement in April, President Joe Biden established an ambitious goal to reduce emissions from the country’s electricity supply by 2035. To achieve that goal, there must be investments to update and optimize the power grid.
Today, the existing transmission system doesn’t have the capacity to integrate all of the clean energy generation already being built. Currently, some transmission lines are overloaded, and that means some solar and wind energy is curtailed. In other words, that clean energy never makes it to a home or business.
And this problem could only get worse. Analysts have predicted the demand for electricity is going to increase dramatically in the coming decades. A 2019 report by the Brattle Group, conducted for the transmission advocacy group WIRES, estimated that electricity demand will increase by 85% by 2050 as we transition to electricity to fuel transportation, heating and other sectors in the near future.
To meet ambitious clean electricity goals, we’ll need a large-scale expansion and upgrade of the grid to deliver clean power to population centers. Transmission investment will not only help bring online clean energy, reduce costs for consumers, and enhance resilience and reliability of the grid, it will also create hundreds of thousands of family-supporting jobs. It will be a shot in the arm for the economy at a time when we need it.
But we have a long way to go to achieve President Biden’s goals. At our current rate, we’ll fall short. Without the necessary transmission in place, some investment in clean energy generation will never happen, and the economic benefits and jobs that investment would create will go unrealized.
A study completed this month for WIRES by the London Economic International (LEI) research group looked at $83 billion of potential investment from approved or recommended transmission projects across the U.S. The report concluded that, in the near term, these transmission investments would boost gross domestic product by $42 billion, generate $40 billion in local spending, and create 442,000 construction-related jobs. This doesn’t even include the long-term benefits in operations and maintenance jobs, regional economic benefits, reduced carbon emissions and pollution, and clean energy jobs created by associated wind or solar farms.
According to the LEI report, in New York and New England alone, some $18 billion of new transmission investment is already approved or recommended to regulators. This could mean thousands of jobs for that region.
To make those investments a reality, federal and state policies need to be updated to help meet President Biden’s 2035 goals.
What can be done in the short term? Here are some options:
Transmission pricing: Transmission projects can take a decade to build, causing investors to require stable economic policy before committing hundreds of millions of dollars toward new projects.
Congress can urge federal regulators to reduce regulatory risks and provide incentives for investors to plan, fund, and build new transmission infrastructure. Reasonable return on equity incentives will foster transmission investment and provide multiple benefits for customers — including enhanced reliability, reduced emissions and lower costs.
Improved planning process: Currently, there are major hurdles to regional and inter-regional planning for transmission.
Regulators should consider how to integrate planning for the long and the short term, meeting 2030 goals with an eye toward 2040 goals and beyond. Comprehensive planning processes can identify projects that meet multiple needs at once, lowering costs, and minimizing construction impacts on nearby communities.
FERC should consider proactive reforms that address impacts of the electrification of transportation and heat and consider state and regional goals. Regulators or legislators could enact policies that accelerate cross-regional transmission projects.
Congress should also consider approaches for streamlining and reducing risks in the siting and permitting process for transmission.
Tax incentives: The investment tax credit and production tax credit programs have led to a boom in development of solar and wind energy projects in the last 15 years. A similar program for transmission investment could motivate the private sector to tackle complex transmission projects.
Our country faces multiple challenges at once: slowing climate change, hardening our infrastructure, reducing emissions in our energy system, and reinvigorating a sluggish economy. Investment in electricity transmission checks all those boxes. Let’s get started.
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May 24, 2021 at 04:58PM
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Commentary: Transmission investment can create thousands of jobs. The time is now - Energy News Network
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