Here Is What Is Really Strangling the Energy Transition
For generations, tobacco was the king of crops in the region known as the Carolina Sandhills, the best way to coax cash out of the sandy soil. But the long decline of smoking in America idled many tobacco fields, and now farmers are eyeing a new crop.
Instead of converting sunshine into bright-leaf tobacco, some of them want to convert it into electricity. This sunny region of the east-central Carolinas is an excellent place to build solar farms, with its plentiful land, sparse population, gentle terrain and need for economic development.
But the farmers, and the solar developers who are looking to cut deals with them, are stuck. The power lines running through the Sandhills region and a larger area of the Carolinas surrounding it are too small and antiquated to move solar power to the booming cities and factories where it is needed.
The situation is a microcosm of a large and growing problem.
Huge backlogs of renewable energy projects have built up around the world as developers are refused permission to pump their power into the grid. The projects go on waiting lists that can now stretch for years, and many ultimately drop off when the delays become intolerable. In the United States, enough renewable energy projects are backlogged right now to achieve a largely clean electric grid by 2030. But without urgent action, most are unlikely to get built.
You may have heard about the need for huge, continent-spanning power lines, operating at 500,000 volts or higher, that can carry enormous amounts of renewable energy from one region of North America to another. That need is real, and likely to become acute by the 2030s, but it is not what we are talking about here.
Instead, we are talking about the smaller, more local power lines running through state-designated transmission corridors. These lines, which you see strung alongside interstates and highways across America, generally transmit power at 115,000 to 230,000 volts.
In most places, the wires were designed decades ago and are just not fat enough to carry more electricity from solar and wind projects. Unless these lines are upgraded with new wires, connecting too many wind or solar farms could cause the cables to overheat, leading to power outages.
The problem is relatively easy to fix. The public rarely objects when old electric cables are swapped out for new ones along existing corridors. But the new technology does require investment, and that is the nub of the issue.
Electrical utilities have been caught flat-footed by the falling costs and rapid growth of renewable energy. They simply failed to get ahead of the wave and upgrade their wires, and the state governments that oversee the power business neglected to hold them accountable.
The same problem is erupting in other countries for many of the same reasons. In Germany, for instance, delays in grid development have prevented wind farms in the north from powering the industrial south, at a time when renewable energy is badly needed to offset the loss of Russian gas.
In the Carolinas, Duke Energy, which operates two of the region’s largest utilities, has finally come to recognize the need for upgrades. As a first step to tackle the problem, it wants to spend $560 million revamping power lines in a region it calls the “red zone,” which includes the Sandhills and much of the surrounding coastal plain in the Carolinas.
Unfortunately, state government lawyers charged with representing the public interest in matters involving North Carolina’s utilities fought that effort for several years, citing the cost, until relenting earlier this year. It is certainly fair to ask who should pay for such upgrades, given that solar developers and landholders stand to benefit.
But the energy transition benefits everyone, not least by helping to limit catastrophic changes in the climate. Moreover, a big build-out of renewable energy is likely to save the public money. Wind and solar projects do not require fuel to operate, whereas gas-fired power plants do, exposing electricity customers to the kinds of price spikes we are seeing right now.
We think it is reasonable to spread the costs of transmission improvements among all electric customers, as Texas did a decade ago, when it built major new power lines to move clean energy to market. Instead, power companies are often trying to charge these upgrade costs entirely to the developers of wind and solar projects, ignoring the broad benefits.
One of America’s most successful projects in the 20th century was the construction of the Interstate Highway System. Imagine if President Eisenhower had said: “We’ll eventually build a transcontinental highway system, but only to the extent that trucking companies can raise the funds among themselves to cover the upfront costs.” We’d still be fighting about it today. Instead, by spreading the costs across society, the Eisenhower administration got it done, to the enormous economic benefit of the entire United States.
Duke’s proposal to solve the congestion in the red zone is before North Carolina regulators now, and they could make a decision later this month. But beyond the Carolinas, a major push is needed all over the country. Discussions are underway among federal regulators about how they can help, but states often exercise more control over the power grid than Washington does.
In the near term, state governments need to treat this situation as the emergency it is. They already know where some of the worst bottlenecks are; the state commissions that regulate utilities should order rapid upgrades to resolve those. Unless states do this, they are at risk of losing out on the investment and tax revenue that new renewable energy projects will bring, not to mention the federal construction subsidies contained in the new climate law Congress passed this year. (Readers should note that we both work for companies that invest in the energy transition and would thus benefit commercially from a change in state policy.)
Beyond that, we think new procedures are required to make sure utilities stay ahead of the evolving needs of the grid, instead of constantly playing catch-up. One possibility would be to transfer planning responsibility for grid upgrades into the hands of independent technical committees empowered by states to consider the interests of all parties. Other solutions are possible, as long as they embody the critical need: planning far enough ahead to prevent big bottlenecks.
The public can help, too. In every state, a public utility commission is charged with regulating the power business, and for too long the decisions of these bodies have flown under the radar. As the climate crisis worsens and our goals for limiting the damage slip farther out of reach, citizens need to show up and make clear to the utilities and their regulators that they want action now.
Justin Gillis is a director at Generation Investment Management, a co-author of “The Big Fix: 7 Practical Steps to Save Our Planet” and a former environmental reporter for The Times. Tyler H. Norris served as a special adviser at the Energy Department in the Obama administration and is now a vice president for development at Cypress Creek Renewables, a national developer of solar farms.
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