Getting Renewables to Wholesale Markets
The old model is broken. The existing model often doesn't work. And some proposals for a new model conjure images of Dr. Frankenstein. I'm talking about, of course, transmission siting authority and its cousin, cost allocation.
Talk to any utility executive or analyst and they'll agree with my first two points. The problems start with the details on the third point. Creating federal siting powers would either rationalize the process of siting transmission or create some monster of a federal power grab. Or both. The backlash by the states is as fearsome as the enhanced powers residing in Washington.
So I was intrigued by an interesting half-way measure proposed the other day during a session of transmission experts gathered together by WIRES (Working group for Investment in Reliable and Economic electric Systems) and the Environmental and Energy Study Institute.
Delphine Hou of The Brattle Group defined the problem of integrating renewables into the grid.
"What we see now are projects that don't fit into the cost allocation buckets that have traditionally been associated with reliability or economic projects or generator interconnection projects," Hou said. "These new projects, for renewable integration, (which could be) anything from overlays to regional projects, where cost allocation always has existed before, may not be working well."
Efforts are going on with mixed success in some jurisdictions and stalled in others.
"We have a solution that we're proposing which balances the stronger state involvement with federal backstop authority," Hou said. "This will create some home-grown, sub-regional solutions while still meeting the national goals.
"We're suggesting that the federal government, for example, the Department of Energy, would create regional goals, specific renewable standards in those states within a regional transmission operator's (RTO) structure, that would create sub-regional planning entities that should come together and develop transmission plans for cost allocation and siting," she said.
States have their own interests and sometimes see the RTOs as too large and unsympathetic, a situation I have seen in many cases.
Hou sees a voluntary structure, which would complement federal involvement. "So we have this balance of local and state solutions that would help meet national goals," Hou said, perhaps optimistically.
But the federal backstop, residing at the Federal Energy Regulatory Commission, is always the toughest piece to define. It will be interesting to see if this idea has legs.
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