DOE: Power Grid Still Too Old, Too Low Capacity for Today’s Electricity Demand

In its most recent needs study, the Department of Energy found that investment in transmission is falling overall, and has since 2015. This trend has left the U.S. with a power grid that is too old and too weak to reliably deliver the amount of electricity where it is needed, when it is needed.

In some cases the needs study identifies, the plans of existing regional transmission organizations/independent system operators are not ambitious enough to accommodate projected growth in demand.

Some of the most pressing needs identified for the power grid by the DOE include a need to improve reliability, resilience, and resource adequacy; enhance renewable integration and access to clean energy; decrease energy burden; support electrification efforts; and cut congestion and curtailment.

While the report’s purpose is not to recommend specific policies to address these needs, the executive summary notes that inter-regional transmission investments will help improve system resilience by adding flexibility and access to a greater variety of power generation across different climate zones – an important consideration as severe weather and drying climate stress the bulk power delivery system.

Changes in the power generation mix, regional energy policy goals, new home construction, transportation electrification and electric heating adoption are all drivers for higher electricity demand.

The areas that are most in need of transmission investment are Texas, the Mountain West, the Southeast and the Plains region.

The areas seeing the most inter-regional transfer capacity are the Plains States to the Midwest, the Midwest and the Mid-Atlantic, and between New England and New York.

In the Northwest, the DOE identifies extreme heat and wildfires as a growing threat. High dependence on hydropower and renewable energy may result in load curtailment during extreme conditions. The DOE recommends increasing transfer capacity between the Northwest and the Mountain West to meet growth projections.

In the Mountain West, the DOE says transmission upgrades may be needed to protect reliability in the Western Interconnection. The needs study states that the Mountain West needs between 2,500 and 4,500 gigawatt-miles of new transmission to meet moderate and high load scenarios. Current plans for the region’s transmission are not in line with these projections. The needs study also states that about 500 MW of new transfer capacity between the Mountain and Southwest would meet projections.

California, studied as its own region for the purposes of this study, is anticipated to continue struggling with hot, dry conditions. Reliance on renewables such as solar may lead to curtailment in extreme conditions. Capacity shortfalls are forecast for 2026 due to power plant retirements. Also, a constrained natural gas system may impact winter reliability, as it already has in Texas and the Mid-South in past years.

To improve the power grid in California, the needs study recommends customers in San Diego, Los Angeles and the Mendocino areas need more transmission to access lower cost power generation. Roughly 2 GW of new transfer capacity between the Mountain West and California would help meet electricity needs.

California will need import capacity of about 4.3 GW, a 204 percent increase relative to the 2020 system, in 2040 to accommodate the anticipated growth and renewable energy forecasts. The report notes that this scenario is mostly in line with policy mandates from the state of California.

In the Southwest, extreme heat is causing resource adequacy issues, and transmission upgrades are needed in the eastern edge of the region to protect system reliability in the Western Interconnection as transmission is expanded along the West Coast. As much as 2,900 GW-miles of new transmission capacity would be needed by 2035 to meet forecasts. Current utility plans in the Southwest will not be enough to meet these needs.

“The real-time, interregional value of transmission between Southwest and Texas was the highest of all considered transfers and has been increasing over the past several years. The value of this transfer was particularly high in 2021 due to the outages caused by the February 2021 cold weather event,” according to the report.

The report calls for up to 4.7 GW in new transfer capacity, or a median of 3.7 GW, which is a 914 percent relative increase to the 2020 system, in 2035 to meet forecasted demands.

The Texas region needs to improve its system reliability and resilience, according to the report. Texas suffers from both a constrained natural gas system that can freeze up in the winter, an over-reliance on variable energy resources to meet peak demand, extremely high energy prices, and an inability to import additional capacity during extreme weather.

According to the needs report, Texas needs to anticipate between 6,800 and 9,400 GW-miles of new transmission (median of 9,000 GW-miles, a 140 percent increase relative to the 2020 system) needed in 2035 to meet moderate load and high clean energy futures. The report also recommends more transfer capacity between Texas and the Eastern Interconnection be built.

In the Plains region, improvements to system reliability and resilience are called for. The report notes that the extreme cold event of February 2021 struck the Plains region hard, leaving the Southwest Power Pool unable to import enough capacity. More transfer capacity would improve reliability, as well as alleviate high electricity prices in Missouri and Oklahoma.

Given its location and the energy needs of neighboring regions, the Plains region needs to increase its transfer capacity between itself and its neighbors on all sides, including across both interconnection seams.

Hourly price differences between Plains and its neighbors have been high and increasing for the past five years, indicating large value in increased transmission between the regions. These values are particularly large when sharing across the interconnection border with the Western Interconnection and Electricity Reliability Council of Texas (ERCOT).

In the Midwest region, the Midcontinent Independent System Operator’s study on renewable energy impacts on the grid found that the MISO grid can maintain reliability up to 30 percent renewable energy use without needing more support. The DOE needs study calls for transmission upgrades that can push this percentage to 40 percent. It also notes that power generation retirements may result in capacity shortfalls as early as 2024.

The Dakotas, Iowa and Minnesota are currently seeing high and increasing transmission congestion. Also, high power prices in Wisconsin are a problem that could be helped with more transmission, according to the report.

The Delta region is vulnerable to intense hurricanes, as it was during Hurricanes Laura and Ida. The DOE recommends as much as 3,900 GW-miles of new transmission by 2035 to meet forecasted needs and improve resilience.

In the Southeast, more transmission is needed – as much as 8,000 GW-miles of new transmission by 2035. This is more than current utilities are planning for. More interconnections between the Mid-Atlantic and Delta regions especially are called for.

In Florida, the power grid is most vulnerable during hurricanes or periods of intense flooding. As much as 2,000 GW-miles of new lines will be needed by 2035 to accommodate growth projections.

In the Mid-Atlantic, transmission congestion is a problem, leading to high consumer energy costs. The worst constraints are seen in Maryland, Delaware, Pennsylvania and New Jersey. More transmission could help lower energy costs for people on the Delmarva Peninsula.

Somewhere between 27.9 and 51.7 GW of new transfer capacity would be needed with the Midwest region by 2035 to meet energy needs.

In New York, congestion is also an issue leading to large price disparities between Upstate New York and Long Island, however the report notes that COVID-19 restrictions lowered some of the impact of this temporarily. Long Island has seen high prices for about five years, and additional transmission could alleviate this.

In New England, the DOE identifies the constrictions on the natural gas system as a threat to winter reliability, and calls for a better designed offshore transmission system that can integrate offshore wind energy without compromising the transmission system. New England also needs to interconnect with New York to help better meet the needs of both regions. Higher transfer capacities with Canada would also enable better usage of renewable energy resources such as wind and hydropower.