The U.S. is pouring billions into transmission. Is it enough?

Today, the Department of Energy’s grid deployment office released its much-anticipated national transmission planning study. The multi-year project provides a guide for building out the country’s high-voltage power grid, with an emphasis on efforts to build long-distance, interregional lines.

The study arrived in tandem with the news of the office’s investment of $1.5 billion in four transmission projects via a new revolving fund facilitated by the 2021 infrastructure law. Preliminary contracts will go to The Aroostook Renewable Project (spanning from northern Maine to the rest of New England), Cimarron Link (in Oklahoma), Southern Spirit (from ERCOT in Texas to power markets in the southeast), and the second phase of Southline (in New Mexico). 

According to Rob Gramlich, president of Grid Strategies, there has long been an opportunity for the federal government to take a larger role in transmission, and today’s study and investment news marks “a decisive change” in that direction. By definition, regional grid operators operate regionally — and long-distance lines span multiple regions. Gramlich said the federal government is uniquely poised to both be a key early funder for these large-scale lines, and provide analysis of future grid connections.

But in an era when transmission projects are increasingly hard to build, even as they’re increasingly needed, will the government’s embrace of the challenge be enough?

“The electric industry grew up out of a few thousand utilities that planned their own local systems, not really looking at their neighbors very much,” Gramlich told Latitude Media. As that changed and interstate transmission became key to reliability, though, “we never really fundamentally changed our industry structure or regulatory structure to provide for big long transmission lines, or these regional connections.”

To build an interregional transmission line today is to sign up for years — if not over a decade — of approvals, permits, and construction. (A bipartisan permitting reform bill that would cut down on that timeline significantly if passed is currently making its way through Congress.) One recent example, the Midwest’s Grain Belt Express, was poised to start construction next year when an Illinois court reversed the state regulator’s approval of the project in August — wasting money in the process.

So on the one hand, DOE is uniquely positioned to offer analysis and logistical help to states and regional organizations that could use data in determining when and where to build. Under current policies, the report found that meeting both demand growth and reliability requirements would “ include substantial expansion in transmission,” by between 2.1 to 2.6 times the size of the 2020 system by 2050. 

When today’s study dropped, Gramlich was attending the Midwest Governors Association meeting in Chicago, where governors were hashing out transmission plans. And even before they had time to digest the report (which numbers in the hundreds of pages), it seemed to him that “there’s very much an appetite for it.”

Interregional coordination, the report called out, “can save the U.S. electricity system hundreds of billions of dollars,” and reduce carbon emissions by between 10 and 11 billion metric tons.

“[The states are] acutely aware that the reliability of their power system depends on these large regional flows of power, but they're looking for help,” he added. “How exactly do you design the right grid for that?” The NTP study, and future related efforts, could provide at least some of the answers.

As for whether federal investments that come in increments of a few billion dollars at a time will fix the state of transmission? Well, Gramlich said $1.5 billion is “a drop in the bucket,” for an industry that spends $30 billion per year on transmission just to keep the current system going. (The first round of transmission investments, totaling $1.3 billion, came in October 2023.)

But, he said, the announcements are important evidence of the program’s solidification, and potential for longevity even in the face of a change of administration. And the hope, at least, is that the investment can be catalytic in combination with other federal efforts. 

“It's not enough in terms of dollars, and also the transmission planning report is at this point only words and numbers on a piece of paper, and the industry is not really used to turning such analyses into actual plans,” he said.

If this report is to be the exception, “there's a big handoff here that needs to happen.”