Transmission planners need to account for corporate America’s growing demand for renewable energy

Most experts agree that upgrading and expanding our nation’s transmission infrastructure is a critical part of any investment plan for America’s future. The American Society of Civil Engineers gives a D+ grade to our upkeep of our electricity system, noting that “without greater attention to aging equipment, capacity bottlenecks, and increased demand, as well as increasing storm and climate impacts, Americans will likely experience longer and more frequent power interruptions.” President TrumpDonald John TrumpSchiff: Surveillance warrant docs show that Nunes memo 'misrepresented and distorted these applications' Chicago detention facility under investigation following allegations of abuse of migrant children Ex-Trump aide: Surveillance warrants are 'complete ignorance' and 'insanity' MORE has also signaled that transmission is one of his priorities for an impending infrastructure bill.

But determining the appropriate amount of transmission to build, and where to build it, is a complex process, made even more challenging by the many stakeholders involved at the federal, state and local levels. Most U.S. transmission projects take 5 to 10 years to build, and the delays and uncertainty can often create insurmountable hurdles for many badly needed projects.

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One of the keys to addressing our infrastructure backlog is planning by Regional Transmission Organizations (RTOs). Once a specific need is identified in an RTO plan, the chances that the transmission line will get financed and built go up dramatically. This is why we highlighted in our recent research report that RTOs are largely failing to plan for a large portion of future renewable energy demand: the demand from large corporate buyers. This is a very fixable problem – it is time for RTOs to address corporate demand so that we have the 21st century infrastructure that Americans need and deserve.

In the past several years U.S. based corporations have been making major commitments to buy renewables and acting on those commitments. A coalition of more than 100 U.S.-based corporate entities has set a goal of purchasing 60 gigawatts (GWs) of renewable energy by the year 2025, equivalent to the amount of energy produced by 110 conventional power plants and enough electricity to power nearly 50 million homes. 

These corporations have already procured 9 GWs of renewable power, and as costs continue to decline for wind and solar are likely to only accelerate their pace of procurement. New utility-scale wind and solar projects are now frequently the lowest-cost option for power – even before accounting for tax incentives - and companies are moving to lock-in those low prices now to control their future energy costs.

To meet their goals, these companies will need to procure an additional 51 GWs of renewables in just the next seven years. But they face a major challenge: there is a gap between where the country can produce the most cost-effective wind and solar resources and where electricity demand is projected to grow, a key factor in determining whether transmission lines are built. The 15 states between the Rockies and the Mississippi River account for 88 percent of the country’s wind technical potential and 56 percent of the country’s utility-scale solar photovoltaic technical potential, but are home to only 30 percent of projected 2050 electricity demand. Our report shows that attempting to procure even half that amount will likely prove difficult given the absence of attention to this demand at the RTOs.

According to our research, only 52 GWs of capacity is available in the planned transmission lines that will access our nation’s best renewable resources, even assuming all the planned projects are completed. Transmission capacity is needed, not just for the 51 GWs of voluntary corporate demand through 2025, but also mandatory demand from utilities needing to meet state-specific renewable portfolio standards as well as voluntary demand from utilities and non-corporate buyers such as universities and the military.

In light of this demand, two key actions are needed: (1) RTOs and other regional planners must begin accounting for corporate demand (we leave for another day the discussion of how best to model corporate procurement goals); and (2) corporate buyers must begin communicating their plans to transmission planners and advocating for their inclusion in models of future demand.

Companies like General Motors (GM) that are making major wind power purchases, are now becoming interested in transmission planning as well, as they see the connection between adequate transmission and meeting their renewable goals. We see a unique opportunity for GM, and other companies like them, to have an enormously beneficial impact in our nation’s future by helping ensure that we have the infrastructure we need to transition to a clean energy economy. Likewise, the RTOs and other transmission planners can make a positive difference by acknowledging that the exciting trend of corporate procurement of renewables is here to stay.

John Kostyack, Executive Director of the Wind Energy Foundation, and David Gardiner, President of David Gardiner and Associates.