Understanding the transmission bottleneck

Latitude Media, podcast at the frontier of climate technology. I'm Shail Khan and this is Catalyst. A lot of people's first thought about transmission is, oh yeah, that's pretty important too, but it's impossible, so why waste our time? And I I strongly disagree with that because we we did it and and we know how to do it. Transmission, interconnection, congestion.

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I'm Shell Khan. I invest in revolutionary climate technologies at Energy Impact Partners. Welcome. Well, we don't usually talk a lot of politics on this show deliberately, but there is some pretty interesting serious momentum right now behind permitting reform in the United States. Uh which could mean unstopping a serious bottleneck in climate tech, which is transmission.

There's nothing new about calls for building out transmission capacity. We've been talking about it for a long time and climate wonks have been pounding the drum. for years because we need that capacity to build out all of the new electricity generation capacity that is going to be required to electrify and to deliver on all the load growth that we are seeing. These are things that you know.

Uh, but is worth renoting the scale that will be required. The Princeton Net Zero America study estimated that the US might need to triple H V D C transmission capacity by twenty fifty to reach a high degree of electrification. It i it also thought that we might need to increase capacity by something like sixty percent by twenty thirty, which is a crazy amount in a short period of time.

And we are just so far off track on that right now. I mean, I think relative to basically anything in decarbonization, the pace of new transmission build out. In the United States and many Western countries might be the one where we are furthest off track. So any daylight there is pretty interesting.

Because there is a little bit of daylight there, I think it's worth revisiting the ins and the outs of the bottleneck itself, how we got here, and the range of solutions that might be available to unclog it. So we're bringing back an episode that we released last year on transmission with Rob Gramlik, who's one of the smartest people in this space. He's the founder and president of Grid Strategies, which does consulting on the power grid and particularly on transmission.

We cover what it means for the grid as well as the transmission issue itself. We talk about congestion costs, interconnection cues, all the messy interrelated problems that comprise this morass that we are in on the grid. We'll be back later in August with new episodes. But in the meantime, here's my conversation from last year with Rob. Rob, welcome. Great to be here. Thanks, Joe. I'm excited to have you and to talk about transmission.

So I think it'd be useful to start with maybe some historical context about transmission in the United States. What has our build rate on transmission been like over the years? Like how has it changed? Obviously there was a period of an enormous amount of transmission build out as we were first building out the backbone of the network, but like w you know, walk me through the kind of medium to long arc of transmission history here.

Yeah, sure. Yeah, let's do fifty years and fifty seconds here. So um Yeah, in like the seventies, uh there was a big transmission build out. You had remote uh big central station coal, mine mouth coal and other plants, and earlier prior to that you had the hydro connecting hydro. To loads and th those were the really the long distance transmission. And then the the rest was sort of connecting utility to utility. So we've got

You know, we the industry grew up with three thousand or so independent utilities. They were kind of balkanized little fiefdoms. And they would do their own generation, transmission, distribution. Then for reliability, they would get some connections between them, and that was our transmission. network um overlaid with uh occasional long distance uh hydro connections or coal connections and the occasional random uh Pacific DC intertie connecting the northwest to California.

Uh then for years we did nothing. The 70s, 80s, 90s, uh beginning of 2000s, barely any transmission built. Can I pause for a second there? Why why did we do nothing over that period? Is it cause we had built out what we needed and there wasn't demand, or was it actually bottlenecks?

Yeah, I mean largely, you know, you know, load growth had been up to seven percent a year, and then it was f relatively flat in those latter dec in those um latter decades of the last century. Um and we also um Uh uh you know, there was some excess generation capacity, so there wasn't a lot of build-out to connect new generation until right around the turn of the century and we had that big flood of natural gas, mainly combined cycle. uh entry and they didn't need a lot of transmission.

But we did have uh a little bit of an uptick in transmission then because the you know, we were trying to the nation was trying to support competitive power markets and we had restructuring. uh and there was when we restructured we found uh whoa there's a lot of congestion on the grid and congestion is harmful for markets and creates market power in local zones where generators have market power. So there was some build out then

in the early two thousands to remedy that. Um Uh and then uh the next phase was sort of two thousand eight to thirteen where there was a pretty significant build out, mainly wind energy driven. MISO multi multi value projects, people, your listeners probably heard about ERCOT, competitive renewable energy zones, Kres. Um taken together, those led to roughly four thousand miles of high voltage

Me meaning like three forty five KV and above. Um trend lines built in the year just in the year twenty thirteen, which had a been you know big was a big increase from prior years and you know, maybe a record going at least for a few decades. Uh but then after that build out it kind of died down again. Uh there's a variety of causes. Uh a lot of people attributed the unintended uh consequences of FERC order one thousand.

Uh but also, you know, solar came in and cheaper. So if you wanted to do the next slug of renewables, you could kind of do more local solar. You didn't have to do remote solar or wind. Uh and gas prices had dropped, uh right. So with the um shale gas, you could do local gas generation. So for the last decade there really wasn't much and and kinda now it's dried up to a trickle. Like we're down in the you know couple of hundred miles of high capacity, so less than ten percent of what we did.

a decade ago. And that's kind of where we are.

Yeah. And so it's I think what's interesting about that, you know, if you just take the sort of two periods that you described of of higher level build out in the seventies we built out a lot, a lot. And then and then it went dry. It sounds like you're saying it went dry after that largely because w there wasn't demand. Load growth had slowed down and you know, we had a excess generation. So that wasn't a necessarily a problem. It was just we didn't need a whole lot more at the time.

Uh that that's fair. I mean those of us who are thinking, well, we need to continue the clean energy growth and we're you know, to decarbonize, we need to keep this going, you know, we were we're we were a small minority vo voice over the last decade. Well, but then but right. But so then around the two thousand eight, two thousand thirteen period, we I think this is what a lot of people forget now'cause we think about the situation we're in today, which we're gonna talk about, which is

which is not building much at all and clearly needing a lot more in the coming decades. And you sort of forget that actually we did build out quite a lot a decade ago. Um And but in this case, that dried up partially because maybe we didn't need it in an immediate sense. But this time I think there's less of an excuse because it was pretty clear we were going to need a lot more sometime in the near future, right?

Uh that's exactly right. I I completely agree. And uh the nice thing to um you know about the success of a decade ago is is that it it does show we can do this. Like a lot of people's first thought about transmission is, oh yeah, that's pretty important too, but it's impossible, so why waste our time? And I I strongly disagree with that because we we did it uh and and we know how to do it. Okay, so there's just a lot of threads to unravel with when it comes to transmission. I wanna

try to get a clear handle on what exactly is the problem. Why is it that we are struggling to build out more, but also not just build out. The way that I think about You could tell me if I'm missing something here, is that you've kind of got three interrelated challenges.

The first two having to do with the existing network and challenges that are presented on the existing network. And then the third being about expanding the network. So the the first two are congestion, transmission congestion on the on the existing grid, the second being Interconnection, getting new resources connected to the existing grid. And then the third, of course, is build out of the network. So let's talk through those one by one, starting with congestion.

How big a problem is congestion on the existing transmission network? How expensive is it? And for whom? Sure. Uh yeah, there are some current symptoms of uh limited transmission capacity and congestion and curtailment of um renewable projects um are among those. And congestion is basically when uh there is limited capacity to del to deliver from point A to point B on the network. Uh in wholesale power markets, that's often reflected by a higher price on the uh

Uh you know delivery, the uh endpoint side of of that and uh and a lower price on the source side. So the generator is getting a low price, the load is paying a high price. Um and uh that's a cost. That's a that's a cost, you know, split between the the the generation and the and the load. And we're seeing that rise. Uh it doubled. We just put out a grid strategies report saying it uh finding a doubled from uh twenty twenty to twenty twenty one and pretty soon we'll get twenty twenty two data.

Anecdotally I'm hearing from renewable generators that it's it's rising. Uh still more and and this is not surprising because it's kind of cyclical. After we built that uh slug of transmission ten years ago, we had had congestion and curtailment and then it declined significantly.

for about five years, uh, you know, because we kinda got ahead of the problem with transmission, but then, you know, we've been lagging on transmission development. So now um uh you know, the generation and load are catching up and then and now all of that of course on steroids with uh the EV and electrification incentives in

the Inflation Reduction Act and the Generation Incentives, we're gonna be, you know, putting a lot more both supply and demand on and we're gonna have a much more constrained grid. I think for a good five years and and then depending on how long it takes us to build transmission, uh it it could last longer.

Well yeah, I mean this is the broader point, right? Why is why is this like a existential challenge for decarbonisation? It's sort of exactly what you described. We are simultaneously going to be trying to build and just an enormous volume of new, largely renewables.

But new clean energy, uh, both because we need to decarbonize the grid and because the economics sort of look good in thanks in part to tax credits and the IRA. Uh so we're gonna be building out all this new generation. It happens to be the kind of generation that generally needs Uh it it's not gonna all be distributed.

And then and then we're gonna be adding, who knows how much more load, but we're gonna be adding load through electric vehicles, through heat pumps, through data centers, maybe through green hydrogen, maybe through direct air capture, right? We've got all these categories of load growth. So that world of, you know, flat load for that we've had for the past couple of decades are is is clearly in the past.

So you add those two things together and there's sort of no way it doesn't result in more congestion unless you build out the network. But I just want to make sure I'm clear on a number that you stated. You found that congestion costs doubled from twenty twenty to twenty twenty one over one year. One year, doubled. Yep. That's sort of extraordinary. Was that

There is uh you know, there's a little bit of noise like you know, gas prices or th you know, a warm or cold winter thing, you know, different things can can affect that. But that is the trend. It is it is going up uh and and um we are kind of Hitting an inflection point. I mean I won't you know, when we look back in a few years, I I won't be surprised to see it look kinda like a hockey stick rather than a you know a smooth

uh uh upward line just because you kinda get to the capacity of the grid and then you're out. Like when you're out, you're out. And if there's no headroom, congestion costs uh go up very high pretty quickly. So absent, let's just assume for a second we don't build out sufficient new capacity to alleviate that congestion and we see that hockey stick, like what

What happens then? I guess the result the natural result of that is we kind of stop building new, new generation and at the same time retail prices shoot upward. Is that like the scenario you could picture? Ja. That's right. Consumers pay the cost. Um and uh renewable generators and their investors take a beating in in markets. Um we're seeing that now in some regions like SPP. There's a fair amount of curtailment in California. Uh some in Myso in the Midwest.

Um and uh it it's very hard for them, especially it's just hard to predict. Um the the prospective modeling is usually not very good because in reality the you know the lines are not all in service and There's a lot more congestion in reality or looking backwards than there usually is l in in prospective modeling. So it's very frustrating for investors in particular to um you know, estimate So that's that's uh you know likely likely what we'll see.

Has there been any movement toward alternative ways to alleviate congestion? For example, putting energy storage strategically placed on the transmission network to alleviate congestion? Does that have a prospect for you? Sure. Uh yeah. I think there are really important opportunities along those lines. Uh you know, not to mention also just I think um, you know, smaller

renewable generation sites and occasional distribution level connections and things like that. I think there's gonna have to be a a lot of sort of smart placement of projects that fit on little spots on the grid and everybody will be looking at the you know, the bulk power version of hosting capacity, you know, where where can you fit generation, but also, as you mentioned,

Uh storage as transmission could be very helpful. Essentially a battery on either end of a constraint can can function as a transmission line. And then there's a set of grid enhancing technologies like topology optimization, power flow control, dynamic line ratings that all can

uh deliver more over existing wires using, you know, monitoring and control technologies on the on the grid. And those are usually very quick to deploy and and much cheaper than other other options. So I I think there is a A great opportunity for those. The challenge, as you and your listeners know, is utility incentives on there. We love our utilities.

Our utilities love their capital in the rate base. They don't love quite so much cheap things that can solve problems without a lot of capital in the rate base. So that's the problem with uh grid enhancing technologies. Are you tired of overpaying for big name PR firms but not really knowing what they're delivering? Is your comms team wasting time reviewing lengthy messaging briefs and decks?

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Trillions of dollars are flowing into power plants, transmission lines, battery factories, data centers. But the future of energy isn't shaped by technology alone. It's shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, the capital platform for the clean economy. Join me for my brand new show, Critical Capital.

As I talk with people deploying capital, shaping policy, and building projects. Together we unpack how risk is priced, how incentives are structured, and how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcast. So we've got some things that have their challenges but can help to some degree to alleviate the

congestion problem, but not to solve it, I think, especially given how much new build is coming and how much new load is coming. There's sort of no there's no future where we don't have rising congestion costs overall in the absence of new transmission build out. Do you agree with that? Correct

Okay. All right. So congestion is problem number one. Now let's get to problem number two, which is interconnection. Uh and you hear a lot about this now. I I think this is to me, this is actually b fast becoming maybe the most immediate and acute. problem that we've got, which is the ability of a new source of generation or energy storage for that matter.

to connect to the grid is is taking longer and becoming more expensive. So can you put some context or some numbers to what it looks like to try to interconnect these days? Sure, a couple of numbers. So interconnection to the bulk power system used to take one or two years. Now it's over four years on on average. So it's more than doubled in terms of the the time frame of processing.

Uh and the cost uh has more than doubled as well. It used to be in the hundred dollars a kilowatt range. Now it's probably over three hundred, sometimes up to well it's maybe, you know, two to three hundred and sometimes in places up to eight hundred or a thousand dollars.

uh a kilowatt. So uh and what's happening here is generators are asked to pay not just for sort of the driveway to connect to the grid, the gen tie generator tie line, but the deeper network upgrades that that um are needed for them to be fully deliverable.

And so if you if you think about, you know, building a you know a a a new house on the current, you know, road system, you pay for your driveway, but then you're also being asked to pay for like a a road that might be, you know, four blocks away or

five miles away and you might be the you know the straw that broke the camel's back, triggering the need for that upgrade. And so you're you're asked to pay for that, which Um you know, has some economic uh elegance to it, but uh it really makes no sense for the current resource mix because what you have to do is study each individual generator for that.

And then you assign, you you send the bill to that generator. That generator says, whoa, I'm I'm not going to pay for that upgrade that by the way benefits every generator after me and all my competitors. Uh so I'm gonna drop out of the queue. Okay, well now what happens. Now the system operator has to restudy everybody else in the queue because you dropped out.

uh and then there's this great shuffling. And now now the the nation's the limited set of transmission engineers are tied up doing endless studies and restudies rather than actually planning the transmission system. So it it's a it's a complete process disaster and and everybody's well aware of it at the regional transmission organizations and FERC and all that. And there's there's plenty of reform

efforts uh going on and and different varieties. We've got a lot of ideas we've proposed uh into that. But, you know, some of the ideas are are are just obvious because it we're the the problems are are so acute and and obviously flawed. That was gonna be one of my you sort of half answered one of my own.

Key questions, which has always been, I hear about the interconnection cues getting longer and longer and the timelines getting longer and the cost getting higher. But for me at least the like what what happens, what's causing all that is a bit of a black box. Maybe we could walk through like a more concrete imaginary example. So if I'm let's just say I'm trying to build a solar project somewhere and I want to connect it to the bulk power system. So I file my interconnection request.

What happens between that and then getting an approval. Yeah, well you file your interconnection request with the transmission provider, which could be a regional transmission organization or just a vertically integrated utility, either way, they study your project. And uh they're also studying, you know, scores of other projects that, you know, might be in a similar area, which uh just

stopping right there. That's very different from twenty years ago when when we at FERC, I worked for the chairman of FERC at the time. when we put these rules in place, all anybody was building was gas plants and you you know, you'd have like a very s you know, small, discrete set of gas plants and they'd be usually connecting to the high voltage grid and it it wasn't there just wasn't a lot to process. Then now you've got against you know dozens or scores of projects

Uh and they all interrelate to each other, whether some are assumed to be on or others, you know, not proceeding. Uh so you have this kind of complicated um uh set of uh conditions to to study Uh you know, i in theory you're supposed to just file your request, they tell you, okay, here's what it costs, here's the facility study and and uh and then you get that and you decide, okay, I'll proceed and then you pay them the money.

And uh you you connect and you get your uh your interconnection agreement, um, which is like a you know, uh in FERC approved tariffs in terms of what the agreement looks like and that's like a contract. Um the the problem is just the the complexity of these studies and restudies and how every project influences every other project. Um and uh to me the you know, and th this whole thing y used to be easier, simpler and cheaper.

when the grid had some headroom, right? Because there weren't projects that were the straw breaking the camel's back. Now like every project is breaking another camel's back. And so It's just it it's just kind of blown up into a completely unworkable process and so um

You know, we can talk about solutions, but um you know an obvious one if you're kind of looking at this thirty thousand foot level is to say, wait a minute, why are we trying to b actually build the regional network through a generator by generator, you know, serial interconnection process. Shouldn't we just build that network that we everybody knows needs to be built first and then You know, then it's simpler, easier, and cheaper for the generators to just connect.

In other words, you would just say like, Okay, we're gonna build we're gonna build a line from from A to B Uh, and then now get get in line generators and we can fit, you know, a certain amount of capacity on this line and so we're gonna put everybody in up to this line and it's very straightforward, as opposed to the generators saying

Hey, I want to put a generator here. And then we do a million studies and restudies to determine the cost to each one of them of whatever the network build out is gonna have to look like. Exactly. It's almost too obvious. But that's yeah, that's the answer. Is proactively plan the grid first and then than plug in. Doesn't mean the generators pay zero. You know, they can pay some fee. Uh and that fee might be different in one zone of the grid versus another zone. But uh it

you know, there's much less generator specific analysis. Uh it's just, you know, that that is just kind of simple and done at the end. What is to stop us from doing it that way? Is it a FERC thing? Like you said, like you need FERC needs to Reform. Yeah. Yeah, so FERC has a uh nationwide uh notice of proposed rule out that actually might be finalized late

Spring here. And it does some of these things, uh, but it it doesn't uh it it doesn't kinda go the full distance. Again, the the root cause is the transmission capacity and you have to do that through transmission planning. So FERC also has a planning rule we can talk about. Um so either at the regional level or uh through FERC requirements, we we need to get to the transmission planning.

Um to really I've read that um I think the stat is that currently in interconnection queues in the United States, there is more renewable capacity sitting in the queue than there is total electricity generation capacity in the United States.

right now. What do you make of that? Is it is it the one of the results of this dynamic is that your incentive is just to put as much in the queue as you possibly can, hoping that something goes through. And so as a result, we have a bunch of Fluff in the queue or like what's going on? Yeah. Uh well y yes and yes and uh to be more specific, there's about two terawatts of generation in the queue. It's almost all wind solar and storage.

uh and there's uh only about a a terawatt and a quarter of generating capacity operating on the grid right now. So All generating capacity. Of all generating capacity on the on the grid. So um there's there's uh, you know, almost double.

And so is all of that really going to be connected? No. I mean a lot of the interconnected interconnection requests are are projects that you know a developer hopes they kinda get the the lucky um you know, spot on the grid where their interconnection cost is relatively low.

And they'll move forward to that project. But it's kind of a crapshoot. So, you know, you even if you plan on building one project, you might file six interconnection requests and just see what you get. So there is some fishing going on and uh you know developers hate it. Some of my clients in the, you know, the solar industry and the wind industry folks, they hate being called speculative projects, but um be you know, because they're they they're sort of criticized.

for that as if we should just ban speculation. But what are you what are you supposed to do if you're a developer of generation other than, you know, try to file some requests and see if you get a a better answer. Okay, so congestion getting worse quick. Interconnection already quite bad, also continuing to get worse. So the solution is planning and build out. Clearly build out. Um

W I mean I guess this is where the like everybody agrees we need to build out a ton of new transmission. Everybody agrees we're not doing it at the moment. So can you distill the challenges that we face in build out of new transmission? And also maybe in comparison to, as you've said, we've gone through periods not that long in our history where we have built out a lot of new transmission. So what changed?

Sure. So I think it's helpful again to refer back to uh like what success looks like. When we did it well, what how did we do that? So in the Urcott Kres example and the Uh MISO multi value projects.

I'm gonna I'm gonna define that acronym. So that's the clean renewable energy zones. That was the ERCA and ERCA so this is right. This was a Texas because Texas has its own grid and gets to do things its own way, Texas created the Kres I don't know what to call it, program, uh, which results in a bunch of transmission buildup. That's right. The radical progressives in Texas in the two thousand eight time frame passed a law for that. Actually an interesting um

uh, you know, political alignment between uh very conservative West Tex Texas ranchers uh and the environmental community. Um but anyway, uh in Texas and in the upper Midwest, uh we

W did a couple things. We proactively planned for the future generation mix. Like people actually kind of sat down and said, okay, we expect about this much new generation to come on and about this much retirement, and here's where they are on the grid, and here's the demand we expect and in the Midwest there were a bunch of renewable portfolio standards that utilities needed to meet.

Uh so they said, okay, well, based on that ten or twenty year outlook, what is the most efficient grid? And then they kind of did this co-optimization or just this determination of, well, uh we don't wanna pay for You know. Tons of transmission more than we need to get all the remote generation.

you know, because it might be better to have some local generation. So there was kind of a sweet spot of the amount of local versus remote generation and balancing the cost of transmission. So then they did that and then they assigned the cost to all the beneficiaries across all the the states, all of Texas in that case and in the uh midwest according to all the beneficiaries there. So that relatively broad allocation of costs was also critical

uh to getting it done. Ultimately you gotta you gotta get the money back. There's no there's never been a shortage of investment capital for this. business, but there's a shortage of ways to get your money back when you build useful lines. So uh in the Midwest well, both Texas and the Midwest you have this regional tariff because of the I independent system operator or regional transmission organization. So

You can uh plan through that process and then you can get the money back. And if you can plan and get the money back,

uh then you're most of the way there. Uh the other challenge is permitting. I like to talk about the three Ps of transmission barriers, planning, permitting, and paying. So we talked about the planning and the paying, and then of course permitting Uh is hard but in that in these cases uh the they got the permits. Like they're never easy. It takes it's a while, it takes, you know, a lot of studies.

But in that MISO Midwest case, sixteen out of seventeen of the lines got permitted and we can live with that kind of batting average. Right? If you have a well planned line and then you have these independent uh expert um RTO executives go to the planning uh CPCN proceeding in a state and say, here's why this line is needed. You know, not every line will get permitted, but most of them will. So I I think that's solvable. We can certainly talk about permitting legislation and ways to improve the

the process. But um uh you know, it's not uh it's just not the case that w we you can't build anything. I f I think if you do the planning permitting and and paying well we can we can do that and again we've we did it before. Where does local opposition fit in? Is that in the permitting bucket in your mind? I mean, I as I think about, you know, hi these stories in the past of like Clean Line, for example, and trying to build all

all this transmission that was that was such a big challenge. I think of local opposition ending up being one of the major and that sort of bleeding up into politics and permitting and a bunch of other stuff being one of the death knells for some of those lines. So i is that How do you how big a problem do you think of that as being?

Yeah, it's a challenge. I mean a lot of these lines are are really out in rural areas and if you can get the landowners to agree with their lease payment then you can get the lease agreement. And you know, you can string together contiguous plots of land to um to build the line. So th there's a lot certainly on the developer uh to do in terms of uh, you know, where to route the line, which you know, how to work with the communities. Uh one uh

Little provision we got into the Inflation Reduction Act is this uh seven hundred sixty million dollar program for uh kind of local community economic development, sort of hosting uh, you know, benefits for um counties or local communities. So Um that's uh uh you know Policies like that can can help. Certainly outreach, early outreach by developers is is critical. Um but, you know, by and large these lines are not going near many people. Um it's not like, you know

LNG facilities in, you know, towns. Uh it's it's a it's a different type of siting process.

Okay, so stepping back. Do you is your sense of where we are? I mean, I don't know. I'm torn between two things that you're saying. On one hand, if you just look at the dynamic at play sort of immediately today, it looks like it's it's bad and getting worse. you know, congestion's bad and getting worse, interconnection's bad and getting worse. We're not building much new capacity as it stands today. And then we have all these examples of

you know, projects taking fifteen years to get permitted and built and that kind of thing. So you could easily make a case that like a semi apocalyptic case that this the transmission ends up being the thing that holds back the energy transition above all other things. Um, but it also sounds like you're saying uh one, these problems are not insurmountable and two, there is some

progress being made at FERC, there's possible permitting reform, there's some, you know, thoughts around new planning. So, you know, where are you on the um everything is fine to everything is screwed access at the moment? Yeah, I'm in the sort of this is not rocket science.

Damn it, we should do this now. And oh, we were so close getting some really good stuff in the hundred and seventeenth Congress. Uh there really wasn't very much uh for transmission in the Inflation Reduction Act or uh bipartisan infrastructure law. And at FERC, the drama there, um, very unfortunately, is that uh Chairman Rich Glick, who had these great initiatives uh that were, in my opinion, extremely well designed to ta and tailor to the problem.

Uh, he is no longer there, uh uh for reasons outside of electricity policy. And so now we're in kind of never never land at FERC. We have these potentially great actions, but we don't know if they will pass, uh, and we don't know if maybe they'll just pass a weak form of them. Um and either, you know, with or without strong FERC rules, uh inevitably the regional consensus is going to be important. So having governors

involved in this and supportive of a build out of transmission in their regions is very helpful. Usually they care a lot more about economic development, uh whereas the the regulators might be just sort of bean counting whether one rate payer benefits by this much or that ratepayer. So getting broad policy support in the regions is a uh is a need and an and an opportunity.

Uh and that's hard work. We don't necessarily have that yet. I d you know, there are some encouraging signs in different regions about utilities starting to look outside their footprints and figure maybe they'll get involved in transmission. So there are some signs of hope, but I I do think we've got a big problem on our hands. It is getting worse. and uh none of the policy actions over the last two or three years

solve the problem. Like there's proposals and pro you know, promising proposals, but they're they're not they haven't passed and they're not in place. So we got a lot of work to do.

congestion costs and interconnection costs and timelines get so bad. Like if it becomes even worse and we don't build out enough in the near term, will it be unavoidable that we'll need to do some kind of massive reform, or could we just continue into oblivion?

Well I I do think uh reforms are happening at the regional level on interconnection and the FERC reform rule making is likely to proceed regardless of new commissioners coming just because like that one was actually passed on a the proposal was passed on a bipartisan five zero vote at first So it's sort of those process reforms are less controversial than the how do you build that, build out the grid. So I I think we'll get process reforms.

both from FERC and at the regional level that will improve the situation uh to some extent. So hopefully that four and a half year, you know, average time, you know, will shrink, maybe to maybe to three, uh, but, you know, I don't I don't expect it to solve the problem um you know more than that until we get transmission built. But I also don't expect the the queues to get even worse than they are. I think the there are a lot of activities to improve the uh the the queue processing issue.

This is wild prognostication, but one thing I think about a lot. So in the I remember in the um In the modeling immediately after uh the IRA passed, the the repeat project, Jesse Jenkins' project, estimated that by around the end of this decade. We were going to be building out over a hundred gigawatts per year of solar alone in the United States, not to mention all the wind and the batteries and all this other kind of stuff. And uh and and I think

you know, economically that seems like it's right. Um, but my question and and I know they model this in too, but like the my big question has been like, how are we going to interconnect all this stuff? Do you think it's possible or likely, I guess? that we are going to get to that point that quickly. We have to have the grid and Jesse's project also said that I think eighty percent of the inflation reduction act

uh carbon reductions uh will be lost if we don't build out the grid. And so I I think uh all the modeling is is showing the grid really is the the constraint. If it wasn't before Yeah, IRA it it is now and so you know we really have to get busy on uh on building out the grid.

All right, Rob, I feel like I have a somewhat better handle on exactly what's inside that black box of transmission at the moment, but I appreciate you walking me through it and uh hopefully we'll see some progress. We can have you back on and talk about it. Well, great. And we need more talented, you know, help. Uh need more folks uh working on this. There's plenty of work.

work uh in this in this area. So um, you know, look look me up and uh you know, there's there's organizations that are working on this, a lot of good people, a lot of good NGOs and associations, et cetera. So I hope uh hope folks get uh Get uh interested and fall in love with the grid. Rob Gramlik is the founder and president of Grid Strategies.

This show is a co-production of Postscript Media and Canary Media. You can head over to Canarymedia.com for links to today's topics. Postscript is supported by Prelude Ventures, a venture capital firm that partners with entrepreneurs to address climate change across a range of sectors

Including advanced energy, food and ag, transportation and logistics, advanced materials and manufacturing, and advanced computing. This episode was produced by Daniel Waldorf, mixing by Roy Campanella and Sean Marquand, theme song by Sean Marquand. I'm Shale Khan, and this is Catalyst.