Constructing the transmission grid wanted to develop U.S. renewable power capability is sophisticated sufficient on stable floor. It’s much more sophisticated for the nascent offshore wind business. 

But when East Coast states need to hit objectives of almost 29 gigawatts of offshore wind within the subsequent 15 years, they’ll want to seek out options. A key first step can be working with federal regulators and regional grid operators to seek out methods to share the prices of constructing offshore transmission, slightly than going it alone. 

That’s the important thing message from the Federal Power Regulatory Fee’s technical convention on offshore wind integration final month, that includes representatives from utilities and states making an attempt to plan forward for an unprecedented undersea excessive voltage transmission system buildout. 

Virginia, Maryland, New Jersey, New York, Connecticut, and Massachusetts are calling for a mixed 28.5 GW of offshore wind capability by 2035. That can value roughly $100 billion, of which about $15 billion and $20 billion will go into offshore transmission, in line with an October report from the Enterprise Community for Offshore Wind advocacy group. 

However at present’s constructs for allocating transmission prices are unlikely to result in these investments being executed in time, workshop members warned. 

“The present ‘generator lead’ strategy that states have used so far,” through which particular person offshore wind initiatives and offtakers bear the prices of constructing particular person transmission corridors wanted to carry their energy to shore, “is unsustainable,” Stuart Nachimas, CEO of the transmission unit of New York utility Con Edison, mentioned in his opening remarks. 

As an alternative, Nachimas promoted a “transmission-first” strategy that shares prices amongst a number of offshore wind mission buyers, utilities, states, and the ratepayers that may find yourself paying for them.  

With out this effort, offshore wind initiatives may find yourself disconnected from their onshore offtakers, initiatives may face prolonged delays and challenges, and prices may rise by a whole lot of thousands and thousands of dollars, if the proof from comparable issues in Europe are any indication, he mentioned. 

A ‘transmission-first’ strategy to offshore wind 

The overwhelming majority of U.S. transmission initiatives are constructed beneath advanced return on fairness cost-sharing proceedings, overseen by FERC and carried out by the Unbiased System Operators (ISOs) and Regional Transmission Organizations (RTOs) that handle transmission networks that serve about two-thirds of U.S. electrical energy prospects. 

There are longstanding challenges to constructing transmission beneath these sophisticated regulatory regimes, which threaten to constrain onshore wind and solar energy progress. That’s much more true for initiatives crossing a number of RTOs. 

Offshore wind provides much more complexity, because it includes each new offshore networks and hardening of onshore grids to soak up their energy. A current PJM examine indicated a possible for $6.four billion in onshore grid upgrades to combine the 15.6 GW of offshore wind initiatives in its interconnection queue, the Enterprise Community for Offshore Wind report famous. 

Asking particular person builders to bear the prices of the grid upgrades their initiatives set off is like “requiring the final automobile coming into a congested freeway to pay the total value of including one other lane to the freeway,” the report famous, with the outcome that initiatives could also be deserted beneath the price pressures concerned. It additionally incentivizes events that may profit from the ensuing upgrades to attempt to keep away from being put within the place of paying for them — the so-called “free rider” drawback — which might result in project-killing stalemates.  

“A centralized transmission planning course of, carried out by the grid operator and accounting for all advantages in addition to the dimensions economies of transmission, is more likely to yield a extra optimum transmission funding,” wrote report authors Brandon Burke, the commerce group’s coverage and outreach director, and Grid Methods president Rob Gramlich and vp Michael Goggin.

That view is backed by Brattle Group research, discovering that a “community” strategy to coordinating shared transmission infrastructure for offshore wind growth in New York and New England may ship a whole lot of thousands and thousands of dollars in financial savings. 

Advantages embody decreasing duplicative prices, dashing time to interconnection, stopping early lower-capacity buildouts from constraining future progress, and guaranteeing that offshore wind energy is delivered to onshore places that face greater power costs, and thus higher worth from the incoming wind energy. 

Service provider fashions vs. multi-party regulatory engagement 

Jon Wellinghoff, former FERC chairman and CEO of Grid Coverage, agreed in his presentation that a “deliberate mesh community (PMN),” that includes a excessive voltage direct present (HVDC) spine to hyperlink a number of offshore wind initiatives, may assist clear up these issues. 

A handful of initiatives of this sort are being proposed as “service provider transmission” by impartial builders looking for to recoup the large prices concerned by means of preparations with turbines and prospects. These embody a proposal by developer Anbaric for an “OceanGrid” community off the New York and New Jersey coasts. 

However Wellinghoff mentioned the service provider mannequin might not be “notably suited” to assembly the East Coast’s urgent wants, since they threat by no means being accomplished. That’s the case for the Google-backed Atlantic Wind Connection launched in 2010. It promised important value advantages for offshore wind initiatives from Virginia to New Jersey, however has not introduced the wanted financing, possible as a result of absence of initiatives prepared to make use of its capability.

Nonetheless there are some fashions to emulate in onshore U.S. transmission growth, Wellinghoff famous. These embody Texas grid operator ERCOT’s Aggressive Renewable Power Zone (CREZ) coverage, which enabled $7 billion in transmission funding which have helped develop the state’s wind and photo voltaic capability.  

FERC additionally permitted California grid operator CAISO’s value restoration mechanisms to allow $2.1 billion in transmission growth to attach wind initiatives being developed in its japanese Tehachapi Mountains. Midwest grid operator MISO’s multi-value initiatives (MVP) portfolio strategy has enabled about $5.2 billion in transmission to spice up wind energy capability by about 25 GW over the previous decade. 

Getting FERC concerned

Individuals in final month’s convention agreed that grid operators will want FERC to launch multi-party planning efforts for offshore wind, because it holds main authority over interstate transmission planning and value restoration, in addition to over interregional transmission value allocation beneath FERC Order 1000. 

FERC may begin with a coverage assertion declaring its authority over offshore transmission planning, after which calling a joint assembly of ISO-NE, NYISO and PJM to create a “multi-RTO/ISO interregional planning and procurement activity pressure,” Wellinghoff wrote.  

Whether or not FERC takes up these sorts of strategies could effectively depend upon the political objectives of its commissioners. The Republican majority appointed by the Trump administration has issued a number of orders previously few years anticipated to have detrimental results on clear power assets supported by states with aggressive decarbonization objectives. 

The incoming Biden administration will be capable to select a brand new FERC chair, however received’t be capable to nominate replacements for sitting commissioners till their phrases finish or they depart early. A FERC led by Democrats “ought to reap the benefits of the chance and problem the first-ever guidelines aimed toward facilitating offshore wind deployment,” Ari Peskoe, director of the Electrical energy Legislation Initiative at Harvard College, argued in a current FERC coverage paper. 

In the meantime, initiatives already underway like Winery Wind’s 800-MW growth off the Massachusetts coast, that are additional alongside of their allowing course of, will proceed to pursue generator lead transmission tie-in approaches, the Enterprise Community for Offshore Wind famous.

However that shouldn’t cease multi-party community efforts from “continuing in parallel to make sure that the lengthy lead-time wanted to develop a transmission community doesn’t preclude a extra optimum resolution for later expansions,” it famous. 

That might assist handle New England’s more and more sophisticated offshore wind image, the place a number of initiatives are looking for to ship energy to Massachusetts, Rhode Island and Connecticut in several mixtures. It may additionally coordinate a community for New York and New Jersey, the place grid operator jurisdiction is cut up between NYISO and PJM.  

Credit score: Enterprise Community for Offshore Wind

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