New NREL Report Highlights Pathways to Unlock Full Potential of Interregional Transmission

Interregional transmission lines, which connect multiple planning regions, can offer numerous benefits to electric customers, such as increased grid reliability and reduced costs. However, current market and operating practices were not designed for such an interconnected system.

“As we build up our interregional transmission systems, we need to take a fresh look at improving the efficiency and efficacy of the existing system, which could increase grid reliability while reducing cost,” said Christina Simeone, grid researcher at the National Renewable Energy Laboratory (NREL).

NREL's new report, led by Simeone, titled "Barriers and Opportunities To Realize the System Value of Interregional Transmission," identifies issues that prevent current transmission facilities from delivering their maximum potential value and proposes solutions to overcome these challenges. The report categorizes barriers and opportunities into three groups: among all regions, between non-market or mixed market and non-market areas, and between market areas.

Barriers and Opportunities Among All Regions

A key barrier to interregional transmission across all regions is the lack of clarity on resource adequacy sharing, which involves planning how electricity generation resources are shared across large geographic areas to ensure reliability during high demand periods. Additionally, transmission owners and operators often struggle to predict when large power transfers will be needed and to handle irregular power flows during extreme weather events. Solutions include creating a framework for interregional resource adequacy sharing, conducting joint studies on transfer needs, and assessing the internal transmission system's capability for large power transfers as the generation mix evolves.

Barriers and Opportunities Between Non-Market Areas or Mixed Areas

In regions without a market or with a mix of market and non-market systems, inconsistent and nontransparent methods of transmission scheduling and real-time operating are significant barriers. Uncoordinated congestion management in these areas can lead to higher supply costs or reliability risks. Solutions include creating coordinated scheduling and operations platforms between systems and developing consistent methods for calculating available transfer capacity.

“Even in regions with no markets, there are different options for grid operators to reduce costs for electricity customers through greater coordination with other regions,” Simeone said. A few of these options could include creating coordinated scheduling and operations platforms between systems and developing consistent methods for calculating available transfer capacity.

Barriers and Opportunities Between Market Areas

In market areas, joint operating agreements have been established to increase the use of interregional transmission. However, issues such as inaccurate price forecasting, high transaction fees in coordinated transaction scheduling platforms, outdated power flow limits, and inefficient use of excess high-voltage direct current (HVDC) transmission capacity can lead to higher congestion management costs, which are ultimately passed on to consumers. Improving price forecasting, removing transaction fees, and enhancing coordinated transaction scheduling could address these challenges.

Transformative Actions for All Regions

The report suggests transformative actions that could be applied across all regions to increase the value of interregional transmission. These include national coordination of network and resource adequacy planning. While these changes are technically complex and impact stakeholders differently, they aim to enhance systemwide benefits.

“Many of the changes outlined in the report are technically complex to implement and impact power system stakeholders in different ways,” Simeone said. “But the goal is for the suite of options to be considered alongside other local, state, and regional objectives to enhance systemwide benefits.”

Broader National Transmission Planning Efforts

NREL and the Pacific Northwest National Laboratory (PNNL) have been studying the larger national transmission picture for over two years as part of the National Transmission Planning Study (NTP Study), led by the U.S. Department of Energy's Grid Deployment Office. This study aims to identify transmission options that provide broad-scale benefits, inform regional and interregional planning processes, and support strategies for accelerating decarbonization while maintaining system reliability. The NTP Study and its key findings will be released later this year, alongside companion reports, including the recent one on market and operating practices and an earlier report on interregional renewable energy zones.