Understanding the transmission bottleneck

Gramlich’s fifty-year sketch is what makes the current stall legible. The 1970s saw a large buildout to reach remote coal and hydro, laid over a network that had grown up mostly connecting roughly 3,000 independent utilities to each other for reliability. Then came decades of almost nothing, which he treats as largely defensible: load growth had run as high as 7% a year and went flat, there was surplus generation, and the gas combined-cycle wave arriving around 2000 did not need much new wire. A second real buildout ran from about 2008 to 2013, driven by wind and by two deliberate regional programs, and peaked at roughly 4,000 miles of high-voltage line in 2013 alone. Then it died again, down to a couple of hundred miles a year, under a tenth of the peak. The causes he gives for that second stall are mixed: a federal rule whose unintended consequences often get the blame, but also cheap solar, which let developers build locally instead of hauling power from remote wind, and cheap shale gas, which did the same. The distinction that matters is that the first stall happened because nobody needed the capacity, while the second happened even though the need was visible.

The three problems he and Kann work through are really one problem seen from three angles, and the connecting idea is headroom. Congestion is what happens when the network cannot deliver from one point to another: the generator at the source gets a low price, the load at the far end pays a high one, and the gap is a cost split between them. Gramlich’s firm found those congestion costs doubled in a single year, 2020 to 2021, and he expects the curve to look like a hockey stick rather than a smooth slope, because once a line is at capacity there is nothing gradual about it. Interconnection is the same scarcity expressed as process. A new generator pays not only for its own connection but for the deeper network upgrades it triggers, which he likens to being billed for a road five miles away because your new house was the straw that broke the camel’s back. That was tolerable when the grid had slack and few projects triggered anything. Now almost every project triggers something, so developers drop out rather than pay, every dropout forces a restudy of everyone behind them, and the country’s small supply of transmission engineers spends its time on restudies instead of planning the network.

Which sets up his fix, and he is candid that it is almost too obvious: plan the regional network first for the generation mix you expect, build it, and let generators connect for a zonal fee rather than a bespoke study each. He points to Texas’s Competitive Renewable Energy Zones and the Midwest’s Multi-Value Projects as proof it works, and the mechanism he emphasizes is financial rather than engineering. Those programs forecast generation, retirements and demand on a ten to twenty year view, deliberately traded off remote generation against the cost of the transmission needed to reach it rather than maximizing wire, and then spread the cost across all the beneficiaries through a regional tariff. Capital was never scarce, he says; what is scarce is a way to earn your money back on a useful line. His shorthand is three barriers, planning, permitting and paying, and his weighting within it is clear. In the Midwest program 16 of 17 lines were permitted, a batting average he says the industry can live with, and he argues most long lines run through rural land where a landowner lease is the operative negotiation rather than a town-scale fight.

He is less optimistic about everything else. Cheaper partial remedies exist, including storage placed at both ends of a constraint so it behaves like a line, and grid-enhancing technologies that push more through existing wires, and he likes them, but he names the incentive problem plainly: utilities earn on capital in the rate base, and cheap solutions do not build rate base. He agrees with Kann that nothing short of new lines stops congestion from rising. On process he expects real but bounded improvement, with interconnection times perhaps falling from about four and a half years to three, and queues at least not getting worse, and nothing better than that until lines actually get built. The two positions he holds at once are the useful takeaway: this is not rocket science and the country has done it before, and none of the policy of the preceding few years has solved it, the promising proposals have not passed, and the problem is still getting worse.