Outdated Energy Grid Poses Existential Threat to the Renewable Revolution

Yves here. I’m in no position to assess the argument made is this piece, but I suspect readers will be able to provide assessments of the state not just of the US electrical grid, but also those of other energy hogs important countries.

By Irina Slav, a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. Originally published at OilPrice

  • Wind and solar energy are booming in the United States.
  • The country’s power grid, however, may not be ready for the transition.
  • America’s dated electric grid is in desperate need of upgrades to support new renewable energy operations.

Wind and solar energy in Texas are increasing rapidly and could soon replace coal pretty entirely, Fortune reported last month. There is only one catch, the article said: the grid isn’t ready for so much renewable energy.

A similar message came from the solar industry association recently. Developers were ready to start work on the massive buildup of renewable energy capacity required for the Biden administration’s goal of 100-percent net-zero electricity by 2035, the industry said. The grid, however, wasn’t ready to take it in.

“Quarter after quarter, our industry continues to break records with respect to diversifying our fuel supply and allowing our country to be energy-independent through renewables, but, unfortunately, the regulatory process and framework has not caught up,” the senior director of regulatory affairs and counsel at the Solar Energy Industries Association said in March.

The electric grid was developed for an energy system supplied predominantly by fossil fuel sources. The coal or gas-fired power plants generate electricity, which is then transmitted via transmission lines and substations to the end consumer. However, wind and solar installations do not work this way, Solar Power World noted in a report on the grid problems of America’s transition.

Wind and solar power installations do not produce power continuously, so it is difficult to maintain a constant flow of electricity across the grid with a lot of output from wind and solar farms—at least as it is designed now. This means that grid operators will need to upgrade. And this will cost a lot.

California, for instance, recently approved $3 billion in financing for a total of 23 projects targeting upgrades and expansion of the grid over the next ten years as the state’s renewable energy output grows. And that’s just one state.

Utilities in the United States are set to spend some $140 billion this year and next on reducing carbon emissions and upgrading the grid, the Wall Street Journal reported last week, citing research from the Edison Electric Institute. These investments are urgent, as the national grid becoming increasingly unreliable under the twin weight of aging infrastructure and the influx of wind and solar electricity.

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According to industry executives who talked to the WSJ, climate change is also adding urgency to the grid upgrade as extreme weather events, according to scientists, become more frequent and the grid is vulnerable to them.

“We have entered a historic period of transformation in the energy industry, especially in the electric industry,” the CEO of DTE Energy Co., Jerry Norcia, told the WSJ. “When we weigh the pace of investment, both in the transformation of our generation fleet as well as the investments we’re making in our grid, we’re looking very closely at how we finance that.”

The problem for the end consumer is that no matter how utilities finance the massive grid upgrade needed to make it more resilient and more accommodative of wind and solar, electricity bills are set to rise. And this is happening amid inflation rates last seen in the early 80s.

The scale of the challenge is truly stunning, and Texas is a prime example. Per the Fortune article, renewable power installations in different parts of the Lone Star State can generate power at different times. For instance, in the western part of the state, the wind is strongest during the night, while in the southern coastal area, it is strongest in the afternoon. To make the best of these resources, the state needs a grid that connects these parts directly.

This is the challenge that all other states face, too, and not only on a state level. California, for example, is a major importer of electricity, so the grid upgrade would need to be a national endeavor. President Biden’s infrastructure bill envisages $15 billion in spending on the upgrade of existing transmission lines and building new ones to accommodate wind and solar. Against the background of utilities’ forecast spending plans of over $100 billion annually, that amount looks minuscule.

The bill for the grid upgrade, then, would have to be footed by taxpayers. Utilities can only absorb so much additional cost, especially now when inflation, supply chain snags, and shortages of various kinds are already squeezing the business. What this means is that higher energy costs may be about to become a fixture of everyday life.

The pipeline of wind and solar projects in the U.S. is massive, per the Biden Administration’s energy transition plans. Some of these projects have had to be shelved due to the rising costs of raw materials but some will go through—especially with the current rates of government support. Things may change after the November elections, but until then, renewables remain a priority.

The higher costs of power generation from renewables will likely combine with the additional—and sizeable—spending that utilities are planning to make the grid more renewable-friendly to push electricity bills higher. Fossil fuel power generation won’t help balance bills, either. Gas and coal prices are through the roof amid a sharp increase in demand. However we look at it, electricity is going to get more expensive.

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  1. PlutoniumKun

    Unfortunately, this article conflates two separate issues with grids and renewables.

    There are two key issues with converting to renewables – one is the ability of the grid in the widest sense to handle the different loading requirements (in particular, more complex systems to deal with patterns of intermittency), the second is the grid pattern. In simple terms, a fossil fuel or nuclear grid involves big capacity lines from the big thermal plants to major urban areas, while renewables tend to favour more decentralised grids, with multiple lower capacity connections. There are exceptions of course, for example where you need a very high capacity line between a major wind/hydro/solar generating areas and the main area of demand.

    The US has both a very old, poorly maintained grid, and one based on connections between big thermal plants and its big urban areas. This isn’t necessarily all bad, as some big old coal plants are actually in pretty good areas for connecting to big solar plants. Likewise, defunct coastal power stations (usually nuclear or coal) are good points for connecting to off-shore wind. This is happening now in the Irish Sea, where the surplus grid capacity that was put in place in the 1960’s for the now closed Magnox Plants is being used for interconnections and connections to off-shore wind farms.

    A major benefit of renewables if the area is fairly sunny/windy is that you can match outputs to the local grid capacity. The renewable industry in general of course prefers to build big, but there are lots of benefits to spreading solar plants around, scaled to the level of the local grid.

    In short, you need to stop thinking of power generation and the grid as two different things. You need a plan that follows the overall investment life cycle for integrating renewables with the existing grid, and then upgrading the grid in tandem. You can’t put one before the other. And its not necessarily a situation of having to invest more in the grid. There is always investment in the grid, even if just upgrading and renewing systems – but it needs to be directed to the right places. Likewise, renewable investments need to be directed to those geographical areas where the grid can handle the loads, even if the area is not optimal for power generation.

    This means, of course, that converting to renewables is not really an issue of engineering or cost (we already know its the cheapest option in most circumstances). Its a political/legal/structural issue. You either plan for a grid based on renewables or you just let lots of different organisations/agencies/financial interests do their own thing.

    1. vao

      In short, you need to stop thinking of power generation and the grid as two different things.

      Does that mean that the EU, with its dogma of separating power generation and power grids amongst independent economic entities, is complicating matters re: the evolution of the whole power supply system?

      1. PlutoniumKun

        Yes, it was an enormous mistake – driven of course by neoliberalism. Only an undergrad economics student could possibly think that it made sense.

        Having said that, in Germany and elsewhere there is still good local control and co-ordination. Lots of countries went through the motions of separating them without going the whole way. Most countries have used grid control to ‘manage’ the private sector, with varying degrees of success.

        1. upstater

          Well, there is good local control of grid operations in the US also. Most every transmission owner has its own control center and balancing authority.

          The role of “independent system operators” for insuring market access to traders and generators is the problem. They dispatch generation supposedly in market order, but also facilitate sale of transmission rights in spot, day ahead and future markets.

          What happened is the planning and operations functions are essentially duplicated by the transmission owner and the ISO. The only reason for this costly duplication is for *markets* that lend themselves to manipulation.

          These is no reason that provision of electricity shouldn’t be either publicly owned or a strictly regulated monopoly. But markets…

    2. Steven

      You either plan for a grid based on renewables or you just let lots of different organisations/agencies/financial interests do their own thing.

      The method of choice for Arizona. (interests doing their own thing) It’s utilities love solar – as long as they own it. The sa(me goes for storage. Grids and grid management aren’t going away but utilities generating massive amounts of power from locations far removed from end-users needs to. I have to wonder if the emphasis on battery-based storage and the neglect of various gravity-based technologies doesn’t have a lot to do with utility rent-seeking. I’m guessing the most efficient and reliable grid is one composed of residential solar with residential or community-based storage.

      There are still a lot of people who would be delighted if they could find investments that paid even half the return guaranteed by Arizona’s Corporation Commission. I expects that’s true in a lot of other states as well.

      1. Louis Fyne

        the tech for reliable, large-scale, community-based storage (this has to be more than lithium-ion batteries like Tesla’s powerwall) does not exist and will not exist in the intermediate term, barring a Star Trek-type breakthrough in materials science.

        1. steven

          I’ve seen and am sure I can find more links to technologies like this – Gravity Energy Storage – that do not require “Star Trek-type breakthrough in materials science” All they require is getting away from the concept privately-owned utilities need to be able to derive economic rent in order for the technology to be viable.

          1. Tom Pfotzer

            Well said, Steven.

            The U.S. economy is optimized for rent extraction, not value creation.

            I expect I’ll be repeating that phrase many a time in the years to come.

        2. Skip Intro

          Flow batteries would be well suited to fixed installations. I don’t think they require materials science breakthroughs. Using lithium in powerwalls is extravagantly dumb, since the weight / power density is much less important.

    3. disillusionized

      Then there is the output problem, in that renewables aren’t stable in output.
      Of course that isn’t solved by the grid, its solved by not building renewables, and instead building nuclear.

  2. Louis Fyne

    big topic ..couple stabs.

    1. Grid condition is highly regional variable..great to awful. gemerally regional grids are operated by a consortium of the area utilities. But when one utilityhas a disproportionate say on the operations/costs of the grid, costs get cut…see California.

    2. Taking about renewables hides the big problem: Demand!

    as the US is essentially a service economy, peak demand (summer 4p to 7p local, 7-8a, 5-6p winter) does not align neatly with solar or wind output.

    there is also the problem of 4am baseload demand….it is huge. the peak electricity used on a temperate day is only 20-25% more than the juice used at 4am. It takes a lot of electricity to run the hospitals, pump water, run refrigeration, run the warehouses

    1. Grumpy Engineer

      3. There was no discussion of the need for DC transmission stations, which are required for transmitting electricity long distances. These are complex and expensive facilities that introduce new potential failure modes into grid operations.

      4. There was no discussion of the need for energy storage facilities, which could easily total a hundred TWh. Given that the world produces a mere 0.5 TWh of batteries per year (with most of it aimed at EV applications), from where will this energy storage capacity come from?

      And the peak electricity used on a cold winter day is usually around 7am. Heat pumps are still running hard, and people start cooking breakfast and taking showers (which activates their water heaters). The sun is still nowhere to be seen. If there’s a high-pressure zone in the area calming winds… Hoo boy.

      1. Louis Fyne

        Yes. And to add…

        “the Grid” can mean lots of different things.

        There is the regional, interstate grid = largely good. There is the local, regional-metropolitan grid maintained by one’s local utility = good to awful

  3. upstater

    In Texas the Competitive Renewable Energy Zone (CREZ) is an example of long high voltage transmission (much of it at 345 kv) tying wind to load centers hundreds of miles away.

    Completed In 2013, The CREZ Transmission Project Transmits More Than 18.5 MW Of Electricity Across Texas. “The overall CREZ project consists of 3,500 miles of transmission lines capable of carrying 18,500 MW of electricity.

    Texas is its own interconnection and is state regulated which is a double edged sword; it was easier to develop CREZ for this reason but also resulted in the 2021 winter blackout.

    Outside of Texas it is far more difficult to tie wind to load centers. For example transmitting generation in the Great Plains to Chicago or the east. The best way is with high voltage DC transmission, but the costs are enormous. The US hasn’t built anything like that in 40-50 years, technical and construction expertise has to be redeveloped and the equipment is no longer manufactured here.

    Consider the Champlain Hudson Power Express is 300+ miles HVDC and underwater cable (avoid NIMBY problems with transmission towers) costing $4B. It will transfer 1200MW from Quebec to New York City, which is the equivalent output of a single nuclear plant and represents perhaps 10% of demand.

    Multiply that project by 100 on a national level just for transmission…

    1. Grumpy Engineer

      Hmmm… Current peak electrical demand is about 1TW, and that will certainly grow as we deploy more EVs and replace oil- and gas-fired furnaces with heat pumps. Add in disparate (and widely distributed) power sources and storage facilities, and I fear you won’t be multiplying the transmission costs by a factor of 100, but instead by 1000.

      I guess that’s my other major complaint about Biden’s “plan” here. He’s earmarked $15 billion for grid updates, but there’s no description of what we’d actually be buying with those dollars. How many miles of new HV AC transmission lines? New HVDC transmission lines? Underground lines? MV distribution lines? And how much will it take to get the grid to where we need it to be? Are the planned purchases enough, or will they fall grossly short? I suspect nobody in the White House actually knows.

      1. juno mas

        …to much specificity precludes members of Congress from creating “pork” for their states.

  4. Brick

    The average Electric vehicle will consume about 300kWh of electricity per month and probably has a peak flow of 7.2kW. This in effect increases consumption by 60% in the US. This basically means all transformers need to be replaced and most long distance cabling (5 million miles) needs increasing in load capacity. The average transformer takes 350k to replace. You also need to upgrade all 2500 HVT’s at a cost of $5,000,000 each. Just to stabilise and update the US grid at current loads it is estimated $5trillion needs to be spent. Providing charging points of EV’s in rural areas is going to take some expensive engineering as well.

    To even out renewable power supply it is estimated that 6000GWh of battery storage are required in the US to smooth electricity delivery. Building this capacity even over 30 years pushes up the price of lithium batteries and electric vehicles.

    It should be pretty obvious that current plans are not going to work. This is why some countries (Germany, Chile) are slowly working on extending the Grid to households. It works out cheaper to provide cost support for household solar and wind with households having their own energy storage. Unfortunately energy providers and politicians really don’t like this answer.

    1. Grumpy Engineer

      Only 6000GWh (a.k.a 6TWh)? That seems optimistic. But alas, determining how much storage we’d need for a mostly renewable grid seems to be an exceptionally difficult topic of study. And the answers vary a LOT. I’ve seen estimates as low as 1TWh (which I flat-out don’t find credible) to as high as 546TWh (which came from Standford University professor Mark Jacobson’s infamous “100% WWS” paper).

      The number I trust the most is the 100TWh value that came from the guys at Energy Matters, as they did the best job of explaining where their assumptions about supply variability came from. [They specifically scaled up lengthy production histories from actual wind and solar systems.] Other guys (like the authors of the NREL paper) seem to emphasize “typical” when making assumptions about future variability, and I fear they omit the occasional episodes of really unfavorable weather that could cause widespread outages if left unaddressed. And still others (like Jacobson) don’t include any charts or hard description about supply variability at all.

      But who’s actually right? It’s hard to say.

      1. disillusionized

        The more important questions are, what is current storage?
        The US has about 250 gwh worth of storage, a factor 400 is required to reach 100 twh.

        1. drumlin woodchuckles

          The less we need to use, the less we would need to store.

          How down can we shift? How “down” can we “power”?

          Since the establishment won’t power-down, can smaller green-rebel groups of people drive Power Down in their own areas? Even if only in their evolving post-consumption deconsumption conservation lifestyles?

  5. Louis Fyne

    the biggest problem with “the grid” is that:

    1. it is highly intricate and complicated;
    2. planning/implementation of plans take years-decades;
    3. it is vital but not “sexy” (compare to showing off a taxpayer-subsidized Tesla in your driveway).

    Given the “American way of doing things,” American politicians, interest groups, and citizenry do not have the patience or will or smarts to plan infrastructure in a rational, efficient, utilitarian way.

    America will continue to see patchwork and suboptimal efforts to incorporate “greener” electricity.

    don’t hold your breath. things will only get fixed after a breakdown, not before.

  6. Susan the other

    Thinking about the “grid” is beyond me. My fallback is that every building and house and car and truck should have its own power generator and a storage system. Windmills run pumps directly don’t they? Mill ponds run mill wheels. This whole integrated grid stuff sounds delusional. And also the thought occurs: Does large industrial renewable energy generation diminish the effects of global warming? Does a big solar farm, by preventing the sun from hitting the ground, lessen significant heat accumulation? Does a wind forest tame otherwise destructive storms? And how much is too much? If civilization requires large renewable energy factories, operating constantly because they are so absurdly inefficient, will we deplete the weather itself? Gravity is more renewable than weather. Etc.

  7. Tim

    I think I’m going to stick with my ICE car longer than originally planned. I can’t afford to be stuck with rolling blackouts and stratospheric electricity prices, especially while gas prices plummet due to loss of demand.

    The only other option is my own solar with battery storage.

    The transition will happen, but it will be painful!

    1. Peerke

      We put solar on the roof last year and are in the process of adding batteries primarily for demand smoothing but also since we have an EV. However, we have no estimated delivery date from the installer 3 months since we gave them the deposit. There are none to be had apparently. Obviously every battery cell can be sold many times over.

  8. Randall Flagg

    The one thing I rarely read about in all the discussions of alternative power generation is the generation of power from the forces of the tides moving in and out. Low tides to high tides back to low, a cycle that repeats itself day in, day out, under cover of darkness, even during the worst storms, it’s never intermittent. And probably a hundred reasons that it has it’s own set of insurmountable problems. Though there has to be some locations on this Earth where it would work just fine with the proper engineering.

    1. solarjay

      There are very very few locations around the world with the correct physical attributes to harness the tides. The bay of Fundy is a classic that does work, its a location that allows the focusing of the water energy to be harnessed via turbines.

      However tidal power is in the harshest environment on the planet: salt water, fast moving water, electricity, moving parts.
      It will provide a nitch energy source, but not one large enough to make any real global difference.

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