Paving the Way for More Renewable Energy

President Obama has set an ambitious goal of doubling renewable energy production in the U.S. within three years, which would spur the development of a clean-tech economy and address the challenge of climate change. There is just one problem: even if we achieve the president’s goal of producing more renewable energy, we have no way of actually delivering that energy to where it’s needed.

Renewable energy is a national resource, but its potential is unevenly distributed. The quality of wind and solar sites in certain regions of the country is far superior to that of other regions, and the costs are much lower. For example, America’s best sites are on treeless plains and sun-baked deserts. FPL Group’s Horse Hollow Wind Energy Center, the largest wind farm in the world, is located in rural Texas. And our Solar Electric Generating System, the largest solar power plant in the world, sits in the Mojave Desert.

Many of the best undeveloped renewable energy sites reside within driving distance of urban centers but are poorly interconnected with the interstate power grid. If we’re going to expand the amount of renewable energy we produce, we need a targeted expansion of transmission lines to get that emissions-free energy to America’s cities.

The current system was designed to deliver electricity from coal, natural gas and nuclear plants. It was never intended to handle the large amounts of wind and solar energy we have seen coming online in recent years. In some places, the grid is simply too congested to accept the output of additional wind facilities, shutting the market to renewable energy and slowing wind development. Simply put, a lack of transmission capacity is resulting in wind turbines being shut off while fossil-fuel units continue to run.

The solution is simple: A targeted transmission build-out to deliver renewable energy from regions with the best potential and the lowest cost to the urban areas that need it. The two biggest barriers to building additional interstate transmission are disputes over siting (where to put transmission lines) and cost allocation (who will pay for them).

Our current transmission siting laws simply don’t reflect how the grid functions. They were written in 1935 when there was no interstate power grid. Failing to anticipate the development of the interstate transmission, Congress left siting in the hands of state and local governments. Limited federal siting authority established in 2005 has proved ineffective.

In a world where electrons cross state boundaries every second to serve customers in vast power pools, transmission siting requires that we balance local impacts against regional benefits. This is not something that state and local officials can be expected to do. It’s time for Congress to recognize the grid has radically changed over the past 75 years and provide for much stronger federal siting authority.

Cost allocation presents its own challenges. The grid must operate as a single, integrated network for delivering electricity, and yet the current regulatory approach assigns much of the cost of transmission expansion to local grid owners or generators. But the market for renewable energy is interstate and regional, not local. And the benefits are national, since increased renewable energy is a necessary part of a climate change solution that promises broad societal benefits, including reduced emissions of greenhouse gases, increased energy security and lower prices for traditional fossil fuels. The correct approach is to spread costs broadly for transmission projects whose benefits will be shared broadly.

Building transmission that can deliver renewable energy from the best sites with the lowest costs will not be free. But if we fail to make this investment, we will be forced to develop expensive renewable energy in resource-poor regions for local delivery only. That makes as much sense as growing oranges in New Jersey instead of buying them from Florida for a fraction of the cost.

Unless we change the status quo on transmission policy, the United States has little hope of achieving the president’s goal for renewable energy. Congress has to get transmission policy right.

—Joseph T. Kelliher is executive vice president for federal regulatory affairs at FPL Group, the nation’s leading producer of renewable energy from wind and solar power. He was chairman of the Federal Energy Regulatory Commission from 2005 until 2009. This commentary originally appeared in The Energy Daily, a sister publication of COAL POWER.

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