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The urgent need to build transmission infrastructure at dramatic pace, scale, and geographic scope is clear. To decarbonize the power sector, we’ll have to physically rebuild the grid once-over in the coming decades to connect and facilitate a hopeful explosion in new renewable generation capacity across our continental country. We will have to accomplish this as electricity demand grows, including on account of decarbonizing sectors such as buildings, transportation, and industrial production through electrification. Given the stakes of grid balancing, this task is akin to building and starting to operate a new beating heart and wider cardiovascular system, all while keeping the old one from failing amid surgery. Coordination and proactive planning of grid buildout will be key.
Despite the undeniable public benefits, investment in the grid has been stagnating, if not declining. A Department of Energy study found that annual net investment in the grid, as measured by new miles of line, was actually negative on average between 2016 and 2020. Some have faulted the National Environmental Policy Act for this underinvestment, while others have blamed anti-social NIMBYs, both of which, but especially combined, can thwart projects at the permitting stage.
The reality is more complicated and implicates the basic governance of the transmission system. The grid in the United States is owned, operated, and planned largely by a highly fragmented set of privately owned utilities and, in some places, their nonprofit associations, which are regulated at the federal and state level. Transmission owners do not propose and build transmission lines unless they are profitable for their business, which is not guaranteed most of the time. Indeed, new lines can cost transmission owners profits by creating a larger pool of power supply and reducing the energy sales and pricing power of their generation affiliates.
The Federal Energy Regulatory Commission has repeatedly attempted to prod utilities to do more by mandating regional planning procedures. FERC announced its latest regulatory initiative, called Order 1920, last month, and it requires transmission owners to undertake long-range regional planning that considers an array of public benefits, including lower energy prices and enhanced system reliability. In particular, the rule alleviates disputes over investment cost allocation. But stronger planning procedures can hardly ensure that private utilities will actually invest in needed lines. Indeed, FERC’s serial attempts on this front have so far been a failure.
As this FERC activity suggests, the grid is already subject to great public regulation, but this regulatory architecture still falls well short of the public control necessary to treat the grid as a vital common resource whose transformation must be proactively planned and precisely delivered at the system-level. Through public planning and development, we can overcome this structural fragmentation and counteract private utilities’ low propensity to investment across the transmission system. We need a centralized system of public planning, funding, and construction of transmission facilities. We need to nationalize the grid.
The benefits of grid expansion are manifold and go well beyond just the functionality of decarbonization. More connections between states and regions can lower the price of electricity and improve reliability, which will become an increasingly pressing issue in the face of further climate destabilization. And yet our transmission system consists of regional and subregional grids “that operate like jealous petty potentates, resisting stronger links that would allow renewable energy to flow across regional boundaries,” in the words of the New York Timeseditorial board. Projects founder over disputes between utilities over how to distribute costs, while other necessary new additions are never proposed in the first place. This is a structural problem that leads to quantitative underinvestment and qualitative poor coordination of investment across the balkanized system.
The public pays for investments in the electricity system, whether through taxes or consumer electricity bills in monopoly serviced systems down the line. Public investment in critical infrastructure is cheaper for the public than private investment due to the lower costs of debt financing or direct access to the U.S. Treasury for public agencies. These entities are also free from the imperative to maximize shareholder returns and pay dividends. Public investment is more flexible and can adopt a system-wide approach, as opposed to one blinkered at the level of the project. Instead of piecemeal line extensions, the grid can be expanded in a methodical and holistic fashion in accordance with social need.
Public power is firmly established in the United States. Public agencies such as the federal Tennessee Valley Authority and state-owned New York Power Authority generate and transmit power. In nearly the entire contiguous United States west of the Mississippi River, three federal power administrations own transmission lines and can construct new ones. Congress should set up and fund federal authorities across the country to build the power grid we desperately need, coordinating with each other and through federal level planning, and working with, and when needed against, the current assemblage of private utilities.
The Bonneville Power Administration in the Pacific Northwest offers a good model of governance. It is led by a single administrator appointed by the Secretary of Energy. This official has the broad authority to set rates on wholesale power and transmission and develop the regional grid. But these important decisions can only be made after close consultation with retail and wholesale customers, Native American tribes, elected officials, and environmental groups and are reviewed by FERC. This system ensures efficient, publicly accountable management of the grid.
Given the tight timeline we face to deliver on critical decarbonization pillars, one might ask, why experiment with a publicly led approach? We might stoke private utility backlash and weaken or slow the broader project of cleaning up the power supply. But private utilities have had decades to deliver a modern grid and failed. Because of the pressing need to decarbonize and fortify resilience against entrenched climate instability, the necessity of building state capacity is a sober reality. We cannot begin to build necessary state capacity without first acknowledging this necessity and acting in light of it.
North America’s power grid is called the “world’s largest machine” because it is a complex physical infrastructure that must be in perfect balance every second. Our homes, places of work and leisure, and increasingly vehicles are all plugged into the grid. Preserving modern living standards—and an inhabitable planet—requires expanding and rationally operating this common resource. This social undertaking is too important to be entrusted to private corporations.
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Elgin Energy Center is back from the dead.
At least one natural gas plant in America’s biggest energy market that was scheduled to shut down is staying open. Elgin Energy Center, an approximately 500 megawatt plant in Illinois approximately 40 miles northwest of downtown Chicago was scheduled to shut down next June, according to filings with the Federal Energy Regulatory Commission and officials from PJM Interconnection, the country’s largest regional transmission organization, which governs the relevant portion of the U.S. grid. Elgin’s parent company “no longer intends to deactivate and retire all four units ... at the Elgin Energy Center,” according to a letter dated September 4 and posted to PJM’s website Wednesday.
The Illinois plant is something of a poster child for PJM’s past few years. In 2022, it was one of many natural gas plants to shut down during Winter Storm Elliott as the natural gas distribution seized up. Its then-parent company, Lincoln Power — owned by Cogentrix, the Carlyle Group’s vehicle for its power business — filed for bankruptcy the following year, after PJM assessed almost $40 million in penalties for failing to operate during the storm. In June, a bankruptcy court approved the acquisition of the Elgin plant, along with one other, by Middle River Power, a generation business backed by Avenue Capital, a $12 billion investment firm, in a deal that was closed in December.
The decision to continue operating the plant past its planned deactivation comes as PJM set a new price record at its capacity auction in July, during which generators submitted bids for power that can be deployed when the grid is under stress due to high demand. The $14.7 billion auction was a massive jump from the previous one, which finished at just over $2 billion. Ironically, one reason the most recent auction was so expensive is that PJM gave less credit to natural gas generators for their capacity following Winter Storm Elliott, which then drove up auction prices, leading to large payouts for gas plants. PJM said the high auction prices were “caused primarily by a large number of generator retirements.”
In a bankruptcy court filing in 2023, Lincoln Power’s chief restructuring officer said that the company “was experiencing a liquidity crunch” due to low prices in past capacity auction, which meant that it had “received significantly less revenues for the capacity they sold in those Capacity Auctions as compared to previous Capacity Auctions.” With higher capacity revenues in PJM, presumably Elgin's business has improved.
Many analysts are skeptical that PJM can quickly get new load onto the system to bring prices down meaningfully in subsequent auctions — the next one is in December — and the PJM queue for new projects is absurdly clogged. This only juices the incentives for older fossil plants to stay open.
“This shortage of capacity is happening immediately,” Nicholas Freschi, senior associate at Gabel Associates, told me last week. “There might be more resources, and PJM might be able to coerce some retiring or not participating plants to make up for the shortfall. It’s an immediate problem.”
Neither Middle River nor its attorney representing the company before FERC returned requests for comment.
On the presidential debate, California’s wildfires, and the nuclear workforce
Current conditions: Hurricane Francine is approaching Louisiana as a Category 1 storm • The streets of Vietnam’s capital of Hanoi are flooded after Typhoon Yagi, and the death toll has reached 143 • Residents of Nigeria’s northern Borno state are urged to watch out for crocodiles and snakes that escaped from a zoo due to flooding.
Former President Trump and Vice President Kamala Harris squared off on the debate stage in Philadelphia last night. Here are some important climate and energy highlights from the evening:
Three large wildfires – the Line fire, the Bridge fire, and the Airport fire – are burning in Southern California, fueled by intense heat and thick, dry vegetation. Already more than 100,000 acres have been scorched. The Line fire is closing in on the popular vacation destination Big Bear, and is threatening some 65,000 structures. Los Angeles County Fire Chief Anthony Marrone said the scale of the emergencies is straining firefighting resources, and FEMA is sending financial aid to the state. In neighboring Nevada, the Davis Fire has grown to nearly 6,000 acres and is burning toward ski resorts in Tahoe. Temperatures in the region started to cool yesterday after a long and brutal heat wave. The weather shift could help firefighters bring the blazes under control.
The White House is launching an American Climate Corps national tour this fall to highlight the work being carried out by corps members in different communities and showcase important projects. The events will feature remarks from the administration and other officials, roundtable talks with ACC members, and swearing-in ceremonies. The tour began in Maine this week with a focus on climate resilience and urban forestry, and heads to Arizona next week. The rest of the schedule is as follows, with more dates to come:
The number of students studying to become nuclear engineers is declining as demand for carbon-free nuclear energy is on the rise, according toThe Wall Street Journal. Citing data from the Oak Ridge Institute for Science and Education, the Journal reported that just 454 students in the U.S. graduated with a degree in the field in 2022, down 25% from a decade earlier. Meanwhile, the industry’s workforce is aging. “We need nuclear expertise in order to combat climate change,” said Sara Pozzi, professor of nuclear engineering and radiological sciences at the University of Michigan. “We are at a crucial point where we need to produce the new generation of nuclear experts so that they can work with the older generation and learn from them.” The drop in new recruits comes down to nuclear’s image problem thanks to public disasters like Chernobyl and Fukushima, the Journal speculated.
Critical metal refining company Nth Cycle announced this week it has become the first company to produce nickel and cobalt mixed hydroxide precipitate (MHP) in the U.S. following the opening of its commercial-scale facility in Ohio. The company’s “Oyster” technology uses electricity to turn recyclable industrial scrap and mined ore into MHP, a key component in clean-energy technologies like batteries. “This revolutionary innovation replaces pyrometallurgy with one of the cleanest technologies in the world, and accelerates the net zero targets of the public and private sector,” the company said in a press release. It claims the Ohio unit can produce 900 metric tons of MHP per year, which would be enough to supply batteries for 22 million cell phones. The company says its process reduces emissions by 90% compared to traditional mining methods and can help EV manufacturers meet the IRA’s sourcing requirements.
A new nationwide poll of 1,000 registered U.S. voters found that 90% of respondents support President Biden’s federal clean energy incentives in the Inflation Reduction Act, including 78% of respondents who said they were Trump voters.
Maybe you’ve never heard of it. Maybe you know it too well. But to a certain type of clean energy wonk, it amounts to perhaps the three most dreaded words in climate policy: the interconnection queue.
The queue is the process by which utilities decide which wind and solar farms get to hook up to the power grid in the United States. Across much of the country, it has become so badly broken and clogged that it can take more than a decade for a given project to navigate.
On this week’s episode of Shift Key, Jesse and Rob speak with two experts about how to understand — and how to fix — what is perhaps the biggest obstacle to deploying more renewables on the U.S. power grid. Tyler Norris is a doctoral student at Duke University’s Nicholas School of the Environment. He was formerly vice president of development at Cypress Creek Renewables, and he served on North Carolina Governor Roy Cooper’s Carbon Policy Working Group. Claire Wayner is a senior associate at RMI’s carbon-free electricity program, where she works on the clean and competitive grids team. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
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Here is an excerpt from our conversation:
Robinson Meyer: Can I interject and just ask why, over the past decade, the interconnection queue got much longer — but also over the past decade, 15 years, the U.S. grid did change in character and in fuel type a lot, right? We went from burning a lot of coal to a lot of natural gas. And that transition is often cited as one of the model transitions, one of the few energy transitions to happen globally that happened at the speed with which we would need to decarbonize. Obviously, switching coal to gas is not decarbonizing, but it is a model — it happened fast enough that it is a good model for what decarbonizing would look like in order to meet climate goals.
Evidently, that did not run into these kind of same interconnection queue problems. Why is that? Is that because we were swapping in within individual power plants? We were just changing the furnace from a coal furnace to a gas furnace? Is that because these were larger projects and so it didn’t back up in the queue in the same way that a lot of smaller solar or wind farms do?
Claire Wayner: I would say all the reasons you just gave are valid, yeah. The coal to gas transition involved, likely, a lot of similar geographic locations. With wind and solar, we’re seeing them wanting to build on the grid and in a lot of cases in new, rather remote locations that are going to require new types of grid upgrades that the coal to gas transition just doesn’t have.
Jesse Jenkins: Maybe it is — to use a metaphor here — it’s a little bit like traffic congestion. If you add a generator to the grid, it’s trying to ship its power through the grid, and that decision to add your power mix to the grid combines with everyone else that’s also generating and consuming power to drive traffic jams or congestion in different parts of the grid, just like your decision to hop in the car and drive to work or to go into the city for the weekend to see a show or whatever you’re doing. It’s not just your decision. It’s everyone’s combined decisions that affects travel times on the grid.
Now, the big difference between the grid and travel on roads or most other forms of networks we’re used to is that you don’t get to choose which path to go down. If you’re sending electricity to the grid, electricity flows with physics down the path of least resistance or impedance, which is the alternating current equivalent of resistance. And so it’s a lot more like rivers flowing downhill from gravity, right? You don’t get to choose which branch of the river you go down. It’s just, you know, gravity will take you. And so you adding your power flows to the grid creates complicated flows based on the physics of this mesh network that spans a continent and interacts with everyone else on the grid.
And so when you’re going from probably a few dozen large natural gas generators added that operate very similarly to the plants that they’re replacing to hundreds of gigawatts across thousands of projects scattered all over the grid with very complicated generation profiles because they’re weather-dependent renewables, it’s just a completely different challenge for the utilities.
So the process that the regional grid operators developed in the 2000s, when they were restructuring and taking over that role of regional grid operator, it’s just not fit for purpose at all for what we face today. And I want to highlight another thing you mentioned, which is the software piece of it, too. These processes, they are using software and corporate processes that were also developed 10 or 20 years ago. And we all know that software and computing techniques have gotten quite a bit better over a decade or two. And rarely have utilities and grid operators really kept pace with those capabilities.
Wayner: Can I just say, I’ve heard that in some regions, interconnection consists of still sending back and forth Excel files. To Tyler’s point earlier that we only just now are getting data on the interconnection queue nationwide and how it stands, that’s one challenge that developers are facing is a lack of data transparency and rapid processing from the transmission providers and the grid operators.
And so, to use an analogy that my colleague Sarah Toth uses a lot, which I really love: Imagine if we had a Domino’s pizza tracker for the interconnection queue, and that developers could just log on and see how their projects are doing in many, if not most regions. They don’t even have that visibility. They don’t know when their pizza is going to get delivered, or if it’s in the oven.
This episode of Shift Key is sponsored by …
Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
As a global leader in PV and ESS solutions, Sungrow invests heavily in research and development, constantly pushing the boundaries of solar and battery inverter technology. Discover why Sungrow is the essential component of the clean energy transition by visiting sungrowpower.com.
Antenna Group helps you connect with customers, policymakers, investors, and strategic partners to influence markets and accelerate adoption. Visit antennagroup.com to learn more.
Music for Shift Key is by Adam Kromelow.