The hidden emissions impact of grid congestion is bigger than you think

Decarbonizing the power system was never going to be easy. But it has become even more challenging, as rapid demand growth from reshoring manufacturing, electrification, and AI data centers makes it more difficult to retire and replace fossil generation, while expanding and hardening aging grid infrastructure. 

The record deployment of renewables has been a success story for jobs and economic development.¹ But the real-world carbon impact of clean energy generation is increasingly limited by an overconstrained transmission system. 

A report from REsurety, Inc. and Johns Hopkins University, and supported by Princeton, MIT, and WattTime, provides new visibility into the cost and emissions impacts of grid congestion — and the widening gap between high impact and low impact clean energy projects. 

The study, which utilized historical nodal Locational Marginal Emissions (LMEs) from ERCOT and PJM, revealed that in Texas alone, transmission congestion-driven emissions were just over 13 million tons of CO₂e in 2022, a figure that nearly doubled from 2019. 

Further revealing the complexity of the problem, the analysis found that actual emissions in different locations within the same grid — at the same time — can frequently vary by hundreds of tons of CO₂e. As a result, carbon accounting frameworks, such as hourly energy matching, that utilize “same hour same grid” assumptions as a proxy for physical sourcing often have little real-world carbon value. In some cases, hourly energy matching within the same grid can increase operational emissions compared to annual energy matching.

Why is this the case? At the center of the issue is the premise that all renewables are equal when it comes to calculating and offsetting emissions, with current carbon accounting frameworks and proposed hourly matching approaches assuming uniform deliverability of renewables across large regions. In reality, renewable generators' ability to actually displace fossil-based generation is dependent on available transmission capacity within a given sub-region. 

With wind and solar assets often sited far from load centers, these power sources are frequently unable to serve urban load centers, requiring alternatives — oftentimes fossil-based generators — to be dispatched along unconstrained transmission corridors. These nuanced factors aren’t taken into consideration in existing carbon accounting frameworks and are ignored in proposed hourly matching approaches.

Further complications from growing demand 

This challenge is acute in regions seeing an influx in generation and load interconnection requests and will only get worse as demand continues to grow. The report highlights two sub-regions within ERCOT and PJM, Houston and Virginia respectively, that are already feeling the impacts of undeliverable renewable capacity, as well as steep increases in load interconnection requests and demand growth, largely driven by data center development activity in both regions. 

The study calculates that, in 2023, 50% of renewables generation across ERCOT was undeliverable to load in Houston, a region that has seen a 700% increase in data center interconnection requests since the spring of this year.²

The story is even more stark for the PJM grid region, with the report finding that in 2023 almost 70% of renewable power generated within PJM was undeliverable to Virginia’s Dominion Energy’s territory, amidst an anticipated 11 GW of demand from new data centers in Northern Virginia expected by 2030. 

While actual capacity increases in these regions from interconnected data centers and other loads remain to be seen, the study underscores that simply siting new renewable generation within these already constrained regions and employing annual or hourly energy matching strategies that ignore the realities of transmission congestion will exacerbate and obscure the underlying emissions problem.

Integrating intra-regional congestion data 

At a macro level, the problems stemming from grid congestion are much broader than simply overestimating emissions reductions. Grid constraints are also hindering renewable project development and interconnection, and congestion costs are driving up retail electricity prices. 

Alleviating congestion will require a much broader, systems-level approach, including large-scale buildout of transmission capacity and system optimization through grid-enhancing technology deployments. 

In addition to these more expansive changes, taking a more realistic and rigorous approach to incorporating intra-regional transmission data in project development approaches and carbon accounting frameworks will help optimize renewable project siting and capacity delivery — more accurately measuring and offsetting emissions as generation and transmission capacity expands.

The stakes are high. With gas generation largely expected to close the widening supply-demand gap in coming years, we urgently need a more accurate view of the emissions intensity at the local level. 

This is partner content, brought to you by REsurety. REsurety is a mission-driven organization dedicated to accelerating the world’s transition to a zero-carbon future. They provide software and services to support both the financial and sustainability goals of clean energy buyers, sellers, and investors. Download the full paper, Carbon Impact of Intra-Regional Transmission Congestion, at https://resurety.com/carbonimpact/.

¹ According to the U.S. Energy Information Administration’s January 2024 analysis, solar and wind are expected to lead growth of U.S. power generation for the next two years.

² The Houston area utility CenterPoint Energy reported during its October 2024 earnings call that it has seen a 700% increase in data center developers' requests to connect, from 1 gigawatt earlier in the year to 8 GW in the summer months.