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NREL study shows potential for big savings from linking East, West power grids in US

22 November 2020 Kevin Adler

The US Department of Energy's National Renewable Energy Laboratory (NREL) released a long-delayed "Seams Study" that determines the nation could save as much as three times the money it would cost to better connect the nation's largely separate eastern and western grid systems, with benefits of more efficient generation dispatch overwhelming the costs of new transmission under most scenarios.

NREL's Interconnections Seam Study, released in October 2020, also found that much of the net savings that would flow from connecting the nation's three grid systems would come from expanded use of wind and solar and more efficient distribution of electricity across the nation. The study modeled 32 potential grid systems expanded between 2024 and 2038 to better connect the Eastern Interconnection and Western Interconnection, which are almost entirely separated along a line that runs north-south, roughly between west Texas and eastern Montana.

As it stands today, only about 1,320 MW of capacity is in place to connect the 700,000 MW of generating capacity in the Eastern Interconnection with the 250,000 MW of capacity in the Western Interconnection, according to the study.

All scenarios showed a positive benefit/cost (b/c) ratio, and nearly all were above 1.25, which the NREL researchers described as the utility industry's commonly used "threshold" to determine whether new transmission investment is justified.

Variables in the scenario included natural gas prices, transmission construction costs, the future rate of plant retirements, and whether the nation imposes a cost on carbon emissions, which one scenario modeled at $3 per ton in 2024 and increasing to $45 per ton in 2038.

The study modeled three types of transmission expansion: building out the nation's largely alternating current (AC) system at a cost of $42.6 billion; building a largely east-west, high-voltage direct current (HVDC) "macrogrid" at a cost of $48.2 billion; and a mid-range expansion of both AC and DC at a cost of $46.8 billion.

The lowest b/c ratio of 1.2 came from installation of an expensive HVDC macrogrid while natural gas prices remained fairly low, at around $4 per million Btus through 2038. Under that scenario it makes less sense to spend money on infrastructure to ship power long distances when gas plants could generate electricity locally at relatively low cost, NREL said.

The highest b/c ratio of 2.89 came from a scenario of mixed AC and HVDC expansion under a carbon-price scenario that makes long-haul transmission of renewable power comparatively less expensive.

"The study shows with increased intercontinental transmission that the system was able to balance generation and load with less total system installed capacity across each of the generation scenarios, due to load and generation diversity, and increased operating flexibility," the researchers said in a pre-publication article on the study.

In addition, the modeling found another benefit: new lines "would likely have high utilization during challenging operational periods throughout the year," NREL said.

In one scenario modeled in the report, NREL used expected demand and production on 15 April, and assessed activity in which "a cross-seam HVDC" was used to export wind from the Southwest Power Pool and Midcontinent Independent System Operator in the Eastern Interconnection to the Western Interconnection. But then wind power drops off on the morning of 16 April 16, and the flow direction reversed. "Rather than requiring SPP and MISO to deal with the down-ramp in wind on their own, cross-seam transmission allows lower-cost resources in the WI to help balance the loss of the wind power on the other side of the seam," it said.

As a secondary note, the study predicted that boosting connections between the Eastern and Western Interconnections would dramatically change where new generation would be built. Generally, wind deployment would shift farther east, and solar deployment would shift west.

The report itself has been involved in controversy, as the Center for Biological Diversity sued DOE in January 2020 to force its release, after obtaining emails that indicated DOE political appointees were unhappy that the report referenced the benefits of renewable power under a coordinated grid. Concurrent with announcing that the report soon will be available and providing the public summary of its details, DOE filed with the US District Court in Washington, D.C., the report "was only recently completed."

The article was written by Jeff Beattie, 'The Energy Daily,' on 11 October 2020.

Posted 22 November 2020 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit

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