New Analysis Reveals How Transmission Planning and Cost Allocation Processes are Inhibiting Wind and Solar Development

comprehensive review released of regional and interregional transmission planning in the Great Plains, Midwest, and Mid-Atlantic shows how the current processes in and between regional transmission organizations (RTOs) are impeding the development of low-cost renewable power. 

The analysis from Concentric Energy Advisors, commissioned by the American Council on Renewable Energy (ACORE) as part of the Macro Grid Initiative in coordination with the American Clean Power Association and the Solar Energy Industries Association, identifies the primary deficiencies and potential solutions for greater renewable deployment in the Southwest Power Pool (SPP), Midcontinent Independent System Operator (MISO), and the PJM Interconnection (PJM).

"America's transmission system is in need of a 21st century makeover if we're going to have any shot at achieving the level of renewable deployment necessary to address our climate challenge," said ACORE President and CEO Gregory Wetstone. "The current transmission planning processes in these regions are not working to deliver the affordable clean energy that states, businesses and consumers are demanding."

Based on a series of interviews with key market participants and stakeholders in SPP, MISO, and PJM, the report concludes:

  1. "Centrally coordinated" planning at the interregional and RTO levels is needed to identify the geographic areas where untapped renewable energy resources exist and develop optimal and cost-efficient paths for transmission infrastructure development to deliver low-cost renewable resources to load centers.  
  2. Interregional transmission planning should rely on either a unified national interregional planning model or regional models that have sufficiently aligned planning objectives, assumptions, benefit metrics, and cost allocation methodologies to properly assess benefits and costs of interregional transmission projects.  
  3. Reasonable expectations of renewable resource expansion should be integrated into "Futures" assumptions in transmission planning studies. This should include reasonable forecasts for future storage, renewables, and gas generation additions, as well as fossil fuel plant retirements.
  4. Benefit metrics used to assess the comparable benefit of projects relative to their costs should be expanded and standardized across regions to the extent possible.
  5. Planning models and/or processes should better reflect the expected real-time operations and economic dispatch of generation resources.  
  6. Competitive processes would benefit from more coordinated planning where resource zones are identified, and infrastructure solutions that address optimal paths to market are solicited.
  7. Cost allocation for generator interconnection upgrades should be shared with load or other interconnecting generators based on a fair allocation of benefits.  

"The report identifies areas where transmission planning processes in SPP, MISO, and PJM could be upgraded to better integrate the significant amount of wind, solar, and battery storage projects under development," said Julie Lieberman, Senior Project Manager, Concentric Energy Advisors and lead author of the report. "Our interview subjects were nearly unanimous in expressing the view that more centrally coordinated regional planning, and improved interregional planning, would help identify and implement transmission solutions that allow more low-cost renewable resources to come online."