The IRA set aside $5 billion for direct loans for the construction, modification or repowering of generation and transmission facilities. Department of Energy launched the "Building a Better Grid" initiative, which will use $12.5 billion from the IIJA for grid reliability improvements. Signed into law in November 2021, the Infrastructure Investment and Jobs Act, or IIJA, allocated $1.2 trillion for infrastructure upgrades across multiple industries. Recent legislation has also addressed the issue with dedicated funds to upgrade the increasingly insufficient energy grid. The growing problem of transmission constraints is well known in the energy industry. An expanded and upgraded transmission network is required for maximum grid efficiency and reduced energy costs in transferring this power from rural areas to major cities. Wind and solar farms take up three to five times as much land as coal and natural gas plants on a per MW basis, requiring projects to be built in sparsely populated areas with low-cost land, far from dense population centers. The result is higher electricity prices for utility customers.Ĭongestion costs totaled across every ISO have more than doubled from 2019 to 2021, jumping from $2.7 billion to $7.2 billion. If transmission capacity is insufficient to deliver lower-cost generation to population centers, utilities must tap higher-cost capacity closer to these consumers. Other ISOs do not report curtailment in detail, but high-level trends show increasing curtailment in the New York ISO, ISO New England and the PJM Interconnection LLC as well.Ĭongestion costs provide an additional metric of transmission constraints. Over 365,000 MWh of wind has been curtailed through the first seven months of the year. Wind curtailment in the Southwest Power Pool, or SPP, increased over fivefold - from about 1.2 million MWh in 2019 to over 6.3 million MWh in 2021. Midcontinent ISO, or MISO, curtailment of wind has increased comparatively slowly from roughly 250,000 MWh in 2019 to just over 300,000 MWh in 2021, but totals through July show curtailment of wind is surging. The interconnection queue for ERCOT shows a staggering 115,000 MWs of proposed solar capacity. According to Commodity Insights data, over 62,000 MWs of solar are in planning in Texas - six times the amount in operation. Wind curtailment increased from 2.1 million MWh in 2019 to 5.2 million MWh in 2021 and solar curtailment has skyrocketed, jumping from roughly 250,000 MWh in 2019 to over 1.4 million MWh in 2021. Wind and solar curtailment in the Electric Reliability Council Of Texas Inc., or ERCOT, nearly tripled from 2019 to 2021, with 2021 totals surpassing 6.6 million MWh. Curtailment decreased slightly in 2021, but reported totals through July show that 2022 has already shattered previous curtailment records in CAISO with over 2.1 million MWh of wind and solar curtailed in CAISO in the first seven months of this year. Combined wind and solar curtailment in 2019 totaled just over 960,000 MWh and in 2020 increased to nearly 1.6 million MWh. In the California ISO, or CAISO, curtailment rates have steadily increased since 2014. With uncertainty about federal support seemingly eliminated for the time being, transmission and distribution constraints remain one of the most crucial hurdles for renewable generation integration.Ĭurtailment of wind and solar generation is a reliable indicator of transmission congestion. Regardless of long-term clean energy goals, upgrades and expansion of the electric transmission network are desperately needed. Analysis from the National Renewable Energy Laboratory and Princeton University concluded that high renewable penetration of this magnitude would require the capacity of the transmission system across the country to increase by two to three times by 2030.Ĭurtailment rates and congestion costs are already increasing for many ISOs, and the burgeoning pipeline for wind and solar will only add to these stresses. While that legislation eventually failed, the passage of the IRA in August extended production and investment tax credits for wind and solar through 2030, boosting confidence that currently planned projects can reach the commissioning stage and increasing already-high developer interest in wind and solar through the next decade.Įven without a binding national clean energy standard, wind and solar development is expected to continue at a blistering pace over the next decade thanks to state-level targets and existing long-term federal support. In 2021, the Biden administration set an ambitious goal of achieving a zero-carbon electricity grid by 2035 and pushed to implement a national clean energy standard of 80% by 2030 to help reach this goal. Rapidly rising curtailment, congestion costs
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