Dive Brief:

• Building more interregional transmission capacity could reduce potential power outages during extreme weather while saving money, according to a study released Monday by the Natural Resources Defense Council.
• Increased transmission prevented about 2 million customers from Boston to Washington, D.C., from losing power during a simulated Polar Vortex in February 2035, saving $1 billion, according to modeling conducted by GE Energy for the environmental group.
• “This study shows the powerful value of interregional transmission in reducing costs and providing reliability in extreme events,” Ric O’Connell, GridLab executive director and a reviewer of the report, said in a statement. “We need to lower the barriers to getting this infrastructure in place in order to mitigate rising costs and more frequent extreme weather.”

Dive Insight:

The report comes as the Federal Energy Regulatory Commission and state utility regulators are considering the possible need to require increased transmission links between regions.

Their concerns are partly driven by Winter Storm Uri, a period of frigid weather in February 2021 that covered much of the central United States, knocking out power plants from Texas to Minnesota.

The Electric Reliability Council of Texas, largely cut off from neighboring grid systems to avoid FERC oversight, ordered days of rolling blackouts during which about 250 people died and more than $195 billion in property damage occurred.

Meanwhile, the Midcontinent Independent System Operator and the Southwest Power Pool, which also lost power plants during the cold snap, largely avoided planned blackouts because they were able to import power from other areas, according to a report by FERC and the North American Electricity Reliability Corp.

The NRDC report found that adding 87 GW of interregional transmission capacity in the Eastern Interconnection, which covers roughly the eastern two-thirds of the U.S. grid, would help avoid the power outages experienced in Texas under a simulated East Coast heat wave and a winter freeze.

Under the modeling, which GE said was conservative, increased interregional transfer capability would help prevent about 740,000 customers from losing their electricity from New York City to Washington, D.C., saving $875 million. 

The additional interregional transmission capacity would cost about $71 billion, but produce about $12 billion in net benefits, mainly from reduced generation costs, according to the analysis. Most of the new transmission capacity would be built in the PJM Interconnection and Southeastern Electric Reliability Council regions.

Increased interregional transmission would reduce annual power costs by about $3 billion to $4 billion by allowing lower cost electricity to reach more areas, GE said.

GE warned that only adding alternating current transmission capacity might still leave the East Coast grid vulnerable and that direct current transmission capacity may be more effective at helping maintain the grid’s stability.

GE noted its modeling assumes rational economic behavior and that the increased transmission capacity would be used to increase exports and imports across neighboring regions. Operating and planning limits could reduce the potential benefits from increased interregional transmission, according to the firm.

FERC plans a two-day technical conference in early December to consider whether the agency should require grid operators to be able to transfer minimum amounts of electricity between regions.