Permitting reform needed to ease energy transition's transmission limits: experts

With only 675 miles of high-voltage transmission capacity built in 2022, achieving 80% renewable power by 2030 will be impossible without the federal government playing a bigger role in such projects' permitting process, experts said May 23 at the CLEANPOWER 2023 conference in New Orleans.

Chris Seiple, Wood Mackenzie vice chairman for power and renewables, said the US added about 25 GW of solar, wind and battery storage in 2022, but only 675 miles of new transmission was created.

"We're not investing in the high voltage transmission that is necessary for the clean energy transition to take shape," Seiple said. "In order to achieve something like a net-zero emissions economy, we need to be doubling the size of transmission capacity available in the US to access the resources, and 675 miles a year is just not going to cut it."

Craig Cornelius, CEO of Clearway Energy Group, a clean energy provider formed through the sale of NRG Energy's renewables platform, said, "We need to accept that a more substantial role for the federal government is necessary."

Cornelius compared the need for a greater federal role in transmission to the lead position the federal government took after World War II in building a national highway system.

"There we strategic choices made, and they were ultimately supported by people from both parties, and to this day remain so," Cornelius said. "The federal government, through the power to address permitting questions, but also to allocate capital, would enable that, and then it would produce virtuous cycles for economic growth across the country."

A decade to get permits

Alicia Knapp, Berkshire Hathaway Renewables president, said obtaining permits for two large transmission projects in the West, Greenlink and Energy Gateway, took 10 years. Berkshire Hathaway owns NV Energy and Pacificorp, which were involved with the Greenlink and Energy Gateway projects, respectively.

"So, when we think about truly delivering this energy transition and taking advantage of the opportunity that's afforded us in the IRA, there's just no way we can get there if it takes the first 10 years to permit the transmission infrastructure," Knapp said.

Tom Rowlands-Rees, Bloomberg New Energy Finance head of research, said his organization calculates that solar capacity grew about 24 GW in 2024, including small-scale rooftop solar, and would add about 53 GW in 2027, if transmission capacity could keep up, but the total is more likely to add about 44 GW that year.

Similarly, wind additions, which added just 11 GW in 2022 could have an addition of about 35 GW by 2027 without transmission constraints, but is more likely to add just 20 GW.

"One of the things we need to work on is streamlining the permitting," said David Hardy, CEO of Orsted Americas, a major developer of wind and solar projects. "Our South Fork wind project, which is going to be the first commercial scale offshore wind project in America, is being built right now, this summer, and we expect the first power in late summer or early this fall. It took 10 years to permit."

Hardy said he hopes federal lawmakers and regulators reach "bipartisan solutions that can really help improve the process."

"We're not trying to cut any corners on the environment, but we just need to actually make the process more streamlined and less bureaucratic," Hardy said.

Deteriorating risk profile

Xizhou Zhou, S&P Global Commodity Insights vice president in the natural gas, power and climate solutions group, noted that the North American Electric Reliability Corp. recently expressed concern over "a steady deterioration in the risk profile of our grid."

As wind and solar capacities reach saturation levels, their ability to help grid operators reach sufficient capacity levels to meet reliability standards diminishes, Zhou said.

Therefore, Zhou's group expects the US to add 450 GW of wind, solar and battery storage by 2030, but also 40 GW of gas-fired capacity, just to keep the overall grid reliable.

The power fleet could total about 1.9 TW by 2035, Zhou said, "but when we look at the firm capacity of the grid, it's barely moving, sitting at about 1,000 GW."

The reason is that investors are attracted by federal renewable power incentives, while about 110 GW of coal-fired capacity is expected to retire over that period.

"We're probably going to run those gas plants much less, compared to the past, and that's why capacity accreditation has become a very important discussion today across the regions," Zhou said.