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Could poor transmission planning limit corporate renewable deals?

U.S. companies have more opportunities than ever to buy renewable energy directly from electric utilities, as the latter expand their wind and solar portfolios. That's the good news. The not-so-good news is that insufficient space on aging transmission lines could limit the corporate world's ability to procure more clean power in the future, according to a newly released report.

Last year, major U.S. corporations signed contracts to purchase 3,110 megawatts of solar and wind power — that was nearly double the amount that companies bought a year earlier, based on estimates from Rocky Mountain Institute’s Business Renewables Center.

Indeed, the commercial sector's hunger for renewables has grown significantly since 2013. Over the past four years, U.S. companies have signed deals to buy 9 gigawatts of renewables, enough to power 7.5 million homes. Many of those organizations plan to buy more clean energy in future years, while other businesses that haven’t yet bought renewables — either directly or through various power purchase agreements — plan to do so between now and 2025, according to GreenBiz research.

But those efforts could be severely hampered by a lack of space on existing transmission lines that crisscross the country and connect the regions that typically host wind and solar farms to companies in other states that want to buy and use the power, according to a report published this week by the Wind Energy Foundation (WEF).

Since 2013, U.S. companies have signed deals to buy 9 gigawatts of renewables, enough to power 7.5 million homes.
Companies could help avert this crisis by reaching out to state utility regulators and regional grid operators who make the decisions that allow new transmission projects to move forward. Some regional transmission organizations (RTOs) are unaware of the scale of future corporate renewable energy purchasing plans and are not ensuring that the capacity needed to support those future deals is in place, the report suggested.

"Any company aiming to buy renewable energy should engage in the transmission planning process," said David Gardiner, president of consulting firm David Gardiner and Associates, which conducted the research for WEF. "Access to the lowest-cost renewable resources depends on transmission, and corporate renewable energy buyers need to communicate their procurement goals to transmission planners."

The Renewable Energy Buyers Alliance, which represents more than 100 corporate clean-energy buyers and others involved in the clean power movement, has a goal to deploy 60 GW of new renewable energy by 2025. That's more than six times the solar and wind electricity capacity that companies have purchased in deals over the past four years.

The problem is getting all that wind and solar power out of the 15 states where most of the resources are to companies and consumers in other states who want the clean power. Those states are home to 88 percent of the country’s wind power potential and more than half its solar power resources, yet represent only 30 percent of the demand for those resources, according to the report. New transmission lines and upgrades of existing lines are needed to transport all that renewable energy to customers in other states. 

The windy, sunny states include Texas, Oklahoma, Iowa, Kansas, Colorado and New Mexico.

Right now, wind developers seek access to transmission networks for 142 GW of new wind power. What's more, new wind-generating facilities will require 10 million megawatt-miles of additional transmission capacity by 2030, according to an Energy Department report.

Developers will need help from renewable energy customers to push through requests for construction permits for those lines, according to the WEF.

General Motors and other companies are advocating for new transmission projects, including the Plains and Eastern Clean Line, which would ship renewables from Oklahoma to Mid-Atlantic states, and the Grain Belt Express, which will ship wind power from Kansas to Missouri, Illinois and other states. 

General Motors signed a 200-MW wind power purchase agreement in 2017 that will power all the company’s Ohio and Indiana factories. The automaker aims to use renewables for 100 percent of the power it uses by 2050.

"GM’s ability to access renewable energy is key to our decisions about where to expand new facilities," said Rob Threlkeld, GM’s global manager of renewable energy, in a statement. "Expanding and upgrading transmission is critical to help GM access low-cost renewable energy and meet our commitments."

Expanding and upgrading transmission is critical to help GM access low-cost renewable energy and meet commitments.
Electric utilities can be a resource for companies that are concerned about transmission capacity. This is because utilities control not just local distribution grids, but also chunks of what’s called the wholesale bulk transmission grid.

Many regulators have become more responsive to the push for more transmission, particularly as new projects add reliability and value to the larger electricity grid.

Not all state officials like to play ball, however. The Missouri Public Service Commission has twice refused to issue a permit to Ameren to build a transmission line in the state that would be part of a larger line called the Grain Belt Express. The $2.3 billion project would ship 4 GW of wind power from western Kansas to Missouri, Illinois and Indiana. The developers, Clean Line Energy Partners, are suing the commission in Missouri Supreme Court to obtain the development permit.

GM, General Mills, Kellogg's, Nestle, Proctor & Gamble, Target and Unilever and the members of the Missouri Industrial Energy Consumers support the Grain Belt Express transmission line as an important transportation hub that will enable them to buy and use more renewable energy. 

Utilities step up their renewables game

Utilities, meanwhile, are waking up to rising corporate demand for clean energy and are increasingly offering renewable energy at reasonable prices to their commercial customers.

Utilities in 19 states offer renewable energy buying options for commercial customers, according to the World Resources Institute. Fourteen more states have deregulated power markets, where businesses and consumers can choose their own electricity provider. That leaves just 17 states where monopoly utilities do not currently offer green energy programs for customers.

"Corporate buyers have become more active and utilities are anxious to respond," said Letha Tawney, director of utility innovation at WRI. "The next step is educating commissioners and commission staff," as well as groups such as the National Association of Regulatory Utility Commissioners, to ensure that new renewable energy deals move forward, she added.

The next step is educating commissioners and their staff.
Monopoly utilities in 13 states offer 17 renewable-energy purchasing options for commercial customers, according to data from WRI. Those states include Virginia, Colorado, North Carolina and Nevada.

In a recent example, Apple reached a deal with NV Energy, owned by Warren Buffett’s Berkshire Hathaway, to buy the electricity from a 50-MW solar farm in Reno, Nevada, to power the planned expansion of an Apple data center. The companies asked state regulators in November to approve their deal. The utility plans to sign a power purchase agreement with the plant owners and then transfer all the renewable energy credits to Apple.

Nevada voters in November 2016 approved a ballot measure to open the state’s retail power market to competition. The measure had received strong financial support from data center company Switch and the Las Vegas Sands casino operator, after those companies were dissatisfied with responses from NV Energy and the state Public Utilities Commission to their efforts to purchase renewable energy.

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