Since last June when the Environmental Protection Agency (“EPA”) announced its proposed plan for achieving carbon emission reductions from power plants, much of the discussion has focused on the impact of the plan on coal plants and the possibility of widespread coal plant retirements. Now, with the release of the EPA’s final “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units” (the “Clean Power Plan” or “Plan”), stakeholders are largely focusing on how the Plan achieves its goal of reducing emissions using three different methods or “building blocks” that include replacing fossil generation with renewable power. Much of the current discussion and analysis of the Plan, however, overlooks the Plan’s impact on transmission reliability and the need for new transmission infrastructure to implement the Plan’s push for new sources of renewable power.
A significant area of concern with the proposed plan was its potential impact on transmission system reliability. The EPA sought to address reliability concerns by extending the initial compliance deadline from 2020 to 2022, requiring that state’s address system reliability in their implementation plans, giving states the ability to propose plan amendments to cover unanticipated reliability challenges, and including a “reliability safety valve” provision. But even with these safeguards, the Plan will pose reliability challenges for system operators and utilities. Fuel switching will impact transmission flow patterns, substation voltage, capacity, operation, and reliability. In its review of the proposed plan, the North American Electric Reliability Corporation (“NERC”) noted that “[e]ssential reliability services may be strained by the proposed plan.” NERC’s stated concern with the proposed plan still remains under the final Plan.
But maintaining system reliability is not the only transmission-related challenge posed by the Clean Power Plan. The Plan encourages early investment in renewable generation through the “Clean Power Incentive Program,” but it appears to overlook the fact that new transmission lines will be needed to move new renewable energy to local and regional markets. According to a study performed by ICF International, 1.5 billion to 2.5 billion dollars in new transmission investment will be required nationally under the Plan with much of this directed to new transmission projects.
And while the cost of new transmission projects is considerable, the greatest challenge may be time. It takes seven to fifteen years to plan, permit and build an EHV transmission line, with federal permitting and state siting processes often consuming more than half of the development timeline. For example, the SunZia Project, a 500 mile independent transmission project intended to bring wind energy from New Mexico to the Palo Verde Hub in Arizona, has been in regional planning since 2006. The line is not projected to be in operation until 2020 and it took SunZia over 6 years just to work through federal permitting issues. The TransWest Express Project, one of six transmission projects under development in Wyoming, is a 750 mile project intended to move wind power from Wyoming to California and other states. While TransWest had a final EIS published this year, the project has been in planning and permitting for 11 years and it is still years away from construction and operation.
Simply put, the development of new renewable energy resources, as envisioned by the Clean Power Plan, will require new transmission infrastructure. But building new transmission projects takes time. And with the timeline for planning, permitting, and constructing a new transmission line running seven to fifteen years, states and regions may be hard-pressed to meet the initial 2022 compliance deadline and later deadlines without immediate planning for transmission solutions.