The United States is racing towards a carbon-free grid, but with economic and regulatory hurdles blocking transmission infrastructure, the shift off fossil-fueled power may be too slow to avert the worst effects of climate change.
In 2021, renewable energy sources generated only 20% of the electricity used in the U.S., even though technologies like wind turbines and solar panels have been around for decades. A whopping 61% of electricity came from coal, natural gas, and petroleum, releasing greenhouse gases that make up a quarter of the country’s total emissions, CNBC reports.
And as the use of electric vehicles and home heating systems ramps up, fully decarbonizing the economy will require additional power generation, so “the problem is actually bigger than it looks.”
The slow progress is largely due to economics—partly because renewable technologies have only recently become cost-competitive with their fossil-fuel counterparts, but also because reconfiguring existing power generation infrastructure is a slow, expensive job.
The intermittency of many renewable power resources—when generation stalls during periods without sunlight or wind—has also made a full transition more difficult, though batteries and other forms of energy storage are increasingly moving to centre stage.
But outmoded regulations continue to make the grid “the weakest link” in the chain connecting the U.S. to a clean energy future, writes Canary Media. Bottlenecks in transmission capacity have become a major limiting factor, with existing transmission lines proving insufficient to bring new power generation online.
“Nearly 1,400 gigawatts of solar, wind, and energy storage projects are now backed up in U.S. transmission interconnection queues,” Canary says, citing a report by Lawrence Berkeley National Laboratory. “That would be enough capacity to make the U.S. grid 80% clean by the end of the decade.”
The U.S. Infrastructure Investment and Jobs Act signed in November 2021 made it easier to approve new transmission projects by giving the Federal Energy Regulatory Commission (FERC) stronger permitting authority, but then the 2022 Inflation Reduction Act—hailed as a historic piece of climate legislation—did not make transmission eligible for tax credits meant to spur renewable power projects.
Regulations and policy priorities too weak to stimulate the transition, or too favourable to fossil fuel interests, are also slowing down progress. For instance, a hard target—like Norway’s cut-off from gasoline powered vehicles by 2025—would give clear market signals and shift industry practices, CNBC says, while solidifying supply chains would help ease wait times for renewable energy components.
Instead, the U.S. regulatory landscape preserves the status quo and mires the country’s clean energy transition, says Saul Griffith, an entrepreneur who has sold companies to Google and Autodesk and has written books on mass electrification.
“America thinks it’s all about free markets and anti-regulation,” Griffith said. “But really, it’s the most over-regulated, most f—– up energy market in the world.”
There may be positive changes this year to speed up the shift to renewables: new regulations proposed by FERC in 2022 could smooth the processes for planning and building large transmission projects and address the growing backlog of projects seeking connection. But at best, it will still take many years to clear the bottlenecks, and regulators and utilities will need to get better coordinated, says Canary Media.
One way to advance decarbonization goals would be to create new transmission markets where they don’t exist. That would mean expanding federally-regulated Independent System Operators and Regional Transmission Organizations, which coordinate electricity transmission for much of the country, into areas that don’t have them—particularly the large swathes of the U.S. Southeast and West that lie outside the systems.
“These markets allow utilities to buy and sell power amongst themselves to balance short-term shortfalls and surpluses, including the ebbs and surges of wind and solar power that might otherwise need to be curtailed,” Canary Media explains.
Some utilities in outlying regions are moving in this direction, but many clean energy groups want to move beyond energy trading and focus instead on transmission planning. They see that as the “vital next step” towards allocating capital for new transmission lines.
But getting all the utilities and state regulators to collaborate “would be a fraught and complicated process,” and some clean energy trade groups—like Advanced Energy Economy (AEE)—oppose the new regional energy markets because of inadequate independent oversight, Canary Media says.
Overall, though, the emerging dynamics between regulators and energy providers indicate a growing awareness of the need to for a grid transition.
“As states are ramping up their supply of clean energy resources, grappling with extreme weather events and all sorts of other…challenges, including energy affordability, there is a regional conversation spurred around how we better facilitate those energy resources,” AEE Managing Director Amisha Rai told a webinar in December.
“How do we ensure better deliverability, better facilitation of the transmission lines that we have in the region, and better planning and coordination to ensure we’re building out that energy infrastructure in the best way?” she asked.
