Utilities invested $11.1 billion in grid transmission projects in 2011, a figure that is expected to continue to increase through this year, when it will likely peak at about $14 billion, according to a new report from the Edison Electric Institute.
Although the scale of investment is increasing, the overall figure through 2023 is significantly lower compared to estimates from EEI’s 2012 report. Utilities are now expected to spend $51.1 billion through 2023, down from about $64 billion quoted in last year’s report. The drop is attributed to projects that have been delayed or canceled, such as PJM's cancellation of a large transmission project that would have run through Maryland.
Of the more than $50 billion in projects slated to be completed in the coming decade, 76 percent are to support the integration of renewables. More than 13,300 miles of transmission lines will be upgraded or built to support renewables, whether wind,solar hydro, geothermal or biomass.
In 2011, the Federal Energy Regulatory Commission passed Order No. 1000, which reformed the cost allocation and planning requirements for transmission projects. It was largely seen as a boon to move projects forward that would support renewables.
Renewable energy projects aren’t the only driver of transmission. Grid operator PJM is investing about $2 billion in transmission to make up for retiring coal generation. While renewables will benefit from the new (and more flexible) capacity, the projects will mostly bring underutilized gas-fired power plants into the system.
In some cases, moving more renewables might not require entirely new transmission corridors, but rather new market structures and real-time visibility across the balancing areas. Grid operators like MISO and PJM are also increasingly looking to energy efficiency and demand response to meet congestion constraints during the peak days of summer, which come with a lower price tag than large-scale transmission projects.