Responding to
the new IEA report expressing the need for 50 million miles of new electricity
transmission needed to support the energy transition, energy analyst and guru Robert
Bryce said it is simply not possible for three main reasons: 1) not enough
labor, 2) not enough land, and 3) not enough materials and equipment. This is
assuming a push to add transmission quickly. Bryce has written before about the
shortage of electricity linemen, shortages in equipment like transformers and other
supply chain issues, public opposition around the world to wind, solar, and
transmission projects, and the resource intensity of power transmission expansion.
The report notes that we will have to add or refurbish about 50 million miles
of high-voltage transmission lines by 2040. Bryce notes that the amount of wire
required is enough to circle the world 2000 times. Currently, inflation and high
interest rates are slowing renewables and transmission projects. Regulatory and
jurisdictional disputes are also slowing projects. For all these reasons it is difficult
to fathom how we could double or even triple the amount of transmission as some
of the high percentage renewable energy models say we need to do. 2040 is about
6000 days away. That would mean 8333 miles of new or refurbished transmission
lines would be needed globally every single day to 2040. That is about one-third the circumference of the earth every single day. The odds of doing that
are low, probably nil.
The IEA report
Electricity Grids and Secure Energy Transitions does have some great
data about electricity transmission. I will go through the report below. All of the graphs below are from the report. The 1st graph below shows that
the cumulative grid length from 1971 to 2021 is about 78 million km or 48.5
million miles. Thus, to add an equivalent amount in 16.2 years, or double the
global grid length, would require tripling the rate of transmission expansion from
1971-2021 when the global grid length went from 21 million km to 78 million km.
IEA referred to the grid as the “weak link” of the energy transition.
The abstract of
the report highlights the focus on “grid infrastructure, connection queues,
the cost of
outages, grid congestion, generation curtailment, and
timelines for grid development.” Bottlenecks are already happening in some
places and are predicted to happen soon in others. I have written about such
bottlenecks in the Netherlands and other places in my post on power
grid adequacy. One goal of the IEA report is to analyze the risks of such
bottlenecks and grid inadequacy. One obvious result of slower expansion will be
that fossil fuels will be required in greater amounts and for longer times. The
executive summary notes that in order to stay on emissions reduction
trajectories through increased electrification, electrical consumption will
need to increase by 20% this decade compared to the last decade. This can’t be done
without massive grid expansion and upgrading. They also point out the need to double
system flexibility between 2022 and 2030 through leveraging distributed
resources, grid-enhancing technologies, demand response, and digitalized
battery storage. It is no secret that as the share of variable generation such
as wind and solar grows on grids the costs to integrate them rise. Transmission
expansion and upgrading are a big part of the cost of grid integration of these
renewables. They also highlight the need for better long-term planning since “new
grid infrastructure often takes five to 15 years to plan, permit and complete, compared
with one to five years for new renewables projects and less than two years for
new EV charging infrastructure.” This is one reason why interconnection
queues are full of wind and solar projects waiting to be integrated. They also
point out the need for secure supply chains and expansion of a skilled workforce
through reskilling and on-the-job training. They put the onus on policymakers
for the needed grid transformations. The following graph shows the main
components of grid systems.
One thing to
note is that with the exception of distribution system growth in India (which
resulted in needed increases in electricity access), transmission growth in
China, and both emerging economies such as Brazil, grids have not expanded
much in the past decade, especially in advanced economies where electricity
access is not an issue. The average growth over the past decade for advanced
economies is just 9%.
The graph
below shows that most investment in grid expansion has been by China and
advanced economies. As the graph shows, investment in advanced economies has
increased modestly, has remained steady in China, but has slowed in emerging
economies.
Materials and Supply Chain Constraints and Risks
Supply chains
are constrained by materials availability and cost. Different system components
require specific materials. HVDC cables can require less materials than AC lines.
Transformers require an abundance of steel. Almost half of the material by weight
of transformers is steel, 60% of which is grain-oriented electrical steel
(GOES) with specific magnetic properties and high permeability. The rest is
construction steel. GOES is also used in power generation and EV charging. It
also has different grades of quality with the high quality being most desirable
and in the least supply. This is an important aspect of the current shortage of
transformer availability that is affecting transmission expansion rates. There has
also been a shortage of needed semiconductors, although this is expected to
ease in 2024. One important question is - If these materials are in short
supply now how will they be supplied if grid expansion accelerates?
Aging Grids
Another aspect
of grids that needs to be addressed is basic aging. Much has been written about
the fragility of aging grids and how this increases outages, reliability, safety,
and other issues. Thus, in addition to grid expansion plans, utilities must
always consider basic maintenance and upgrade needs due to aging as well. Different
countries have different averages of grid component ages so the need for upgrades
due to aging varies. Japan, the U.S. and Europe have older grids in general. The
graph below shows some comparable lifespans for generation and grid equipment.
Regional Grid Interconnection, Meshed Offshore
Grids, and Digitalization
Interconnections
between regional grids have been the trend in recent years to help enhance both
reliability and renewables integration. It can also save considerably on costs
after initial investments. This involves more transmission lines, substations,
and frequency synchronization. The report notes a trend in Europe of meshed
offshore grids: “An emerging approach to regional interconnection is
using meshed HVDC offshore grids that link offshore assets to different
jurisdictions, allowing the grid connection of the generator also to act as an
interconnector. This is currently a European-driven concept, where projects
like offshore wind farms and energy islands are being connected to different
countries. Meshed offshore grids are expected to play a critical role in
European energy systems in the next 10 to 20 years.”
Renewables integration also increases the requirements
for digitalization of sensors, switches, controls, and other balancing methods.
Bi-directional flow will be required in more places and for longer distances. Digitalization
leads to responsive, reliable, and resilient grids. Digitalization can aid
system health assessment. Drones and satellites can help monitor power lines.
Cybersecurity and Outage Risks
Cybersecurity
is another very important issue. Hackers have long targeted vulnerable power
systems. The need for strong cybersecurity increases grid costs. Cybersecurity
events have more than doubled on power grids since 2016. Electrification and increasing
the size of grids also increases the target size for hackers.
Grid
vulnerability to outages due to weather has increased in the U.S. in recent
years. Types of outages are classified as three types: 1) equipment/technical, 2)
human-caused, and 3) nature-caused. Snow and ice storms, unseasonable cold snaps,
and heatwaves have all stressed regional grids in recent years leading to widespread
outages and even human injury and death in some cases. Better transmission
integration and expanded grids could alleviate some of those problems. Regional
grid interconnection can also help. It was not able to help in ERCOT’s 2021 outage
due to the lack of regional interconnection on the ERCOT system. It was expected
to help in California’s Summer 2020 outages by bringing in wind power from
Wyoming, but the heatwave was there as well and so was not able to offer much
help. Interestingly, in China and the E.U. there are significantly fewer power
outages than in India and the U.S. but emerging economies by far have the most
power outages. Power supply interruptions in the U.S. more than doubled between
2013 and 2021. The U.S. also suffered the most economic impact from outages in
2021 followed by China, Turkiye, and Australia.
Grid Congestion Risks and Transmission Losses
Along with the
increased number of projects and time periods of projects being stuck in
interconnection queues is the problem of grid congestion – times when supply outpaces
demand. This leads to renewables curtailment, which can be costly as available
power supply is simply lost. Additional costs in grid management to better reduce
congestion are also significant. Grid congestion and curtailment costs are
growing everywhere renewables are growing as it is a part of the hidden costs
of renewables. Technical curtailment for selected countries given in a graph in
the report seems to vary between 1% and 6% of renewables generation over the
past 3 years.
Technical grid
losses can be caused by a variety of factors including how geographically spread
out the grid is, population density, climate, grid planning, levels of
investment, share of renewables, and the structure of electricity demand. Higher
grid losses mean it takes more generation to provide the needed power than
would be the cases without the losses. According to the report the global average
is about 7.6% with emerging economies as high as 19%, Africa and Latin America
around 15%, the E.U. and Southeast Asia at 7%, the U.S. at 6%, Japan at 5%,
China at about 4% and South Korea closer to 3%. With Japan and South Korea, the
low percentages likely have much to do with country size and population
density.
Timelines and Needed Investment
Permitting and
construction times for grid expansion and upgrades are clearly a factor in
ability to expand and upgrade fast. As the 1st graph below shows,
the U.S. and the E.U. have much longer timelines than India and China for many
of these projects. This is due much to the more stringent regulatory frameworks,
environmental considerations, and more public engagement. It is also due to
government prioritization of these projects in China and India where central
planning is a key factor. These delays need to be reduced if the grid is to
expand anywhere near the levels required suggested in the report. The 2nd graph
below shows some typical causes of delay in permitting and construction.
The projected timelines
and costs for planned transmission investment in certain countries and regions
is shown in the graph below. While countries like India and China have expanded
their grids through government spending the IEA notes the advantages of
privatization on cost and performance. Privatization of grid expansion has
happened quite successfully in some emerging economies like Brazil. They also
note that new investment models are emerging.
Electricity
demand is driven by economic growth and electrification in advanced economies.
In emerging economies basic electricity access or expanded access is a major
driver. That is why demand forecasts show demand increasing much faster in emerging
economies. IEA modeling shows annual demand growth of 2.1% in advanced
economies vs. 3.1% in emerging economies. That may not seem like a lot of
difference but that growth over a period of 30 years results in nearly twice
the TWh. More electricity access also means more grid expansion.
Needed
investment for grid expansion and upgrade (in addition to needed grid replacement
due to aging) is massive according to the IEA. It is daunting. According to
announced pledges according to the IEA the needed investment in renewables deployment
and grids will be around $41 trillion to 2050. I wonder if that considers all
the particulars of inflation and cost variability of materials. It is not a total
cost since it just includes pledges. The first graph below shows that about $1.1
trillion was spent in 2022 on power plants (which accounted for about $770
billion), grids, and batteries. Now some of that spending on power plants was
on fossil fuel, nuclear, and hydroelectric plants. If we assume that fewer of
those will be built in the future with more being replaced by wind and solar
that would inflate the future costs even more. In any case, it is quite a lot
of money and quite daunting.
Risks of Grid Delays
The risk of
delays in grid expansion includes a slower energy transition, which many of us
have been arguing is a more sensible approach anyway, longer lifespans of fossil
fuels on the grids, which keep them more reliable and resilient, and of course,
the perceived climate impact risks. Slowed grid expansion would also slow
renewables deployment and keep projects in queues for longer periods. IEA has an
announced pledges case and a grid delay case for power source shares on the
grid. In the announced pledges case, they have the share of natural gas on the
grid starting to drop as soon as 2025. I don’t think that is feasible at all
and there is no indication that gas is about to be replaced by wind and solar. In
the grid delay case, they have natural gas maxing and plateauing in the late
2020’s before dropping then rising again to 2050. The rise in that case seems
to be related to gas replacing coal instead of renewables. In any case, these projections
don’t seem realistic to me in light of the fact that both gas and coal have
been steady or increasing on grids in several parts of the world. Overall, to
2023 coal has been plateauing but gas has actually been increasing. To have
both begin dropping strongly beginning in a year or two does not seem likely in
light of current and projected market demand for both. The IEA’s policy
recommendations amount to a pep talk about the need to accelerate as well as to
quickly mitigate all the risks to that acceleration, many of which have
persisted beyond previous recommendations. The more realistic approach is the
grid delay scenario which in itself will be considerably difficult to achieve.
I think the IEA is again being aspirational in their scenarios. I agree with
Robert Bryce that it won’t happen. However, I do think the world will make some
progress toward it. Soon enough at current trajectories, renewables will begin
to cover all of the energy demand growth. Only then can we begin to talk about
replacing fossil fuels. In the meantime, it is still smart and sensible to rely
on relative decarbonization methods that have worked such as replacing coal
plants with natural gas plants and expanding the decarbonization of natural gas
as much as we can through piecemeal methods like CCS, hydrogen, efficiency, sCO2
power cycles, RNG, and methane leak mitigation.
U.S. Dept. of Energy’s Grid Resilience and
Innovation Partnerships (GRIP): $3.5 billion in Awards Announced
The DOE announced
on October 18, 2023, that it would award $3.5 billion in funding to 58 power grid
projects in 44 states. Additional private and local investment is expected to
bring the total investment up to $8 billion. Energy Secretary Jennifer Granholm
called it “the largest ever investment in America’s grid.” Individual
grants range from $1 million to $464 million. DOE noted that more than half of
U.S. transmission lines and power transformers were installed before 1970 which
increases the grid’s vulnerability to outages. $10.5 billion was made available
to the Grid Deployment Office through the Bipartisan Infrastructure Bill. Granholm
noted that the funding will help enable 35GW of new renewables capacity, thus increasing
existing capacity by about 10% by 2030. The MISO (midcontinent) and SPP (southwest)
regions, wind and solar powerhouses respectively, got the biggest grants.
Projects to mitigate wildfire damage and storm damage received hundreds of
millions. Disadvantaged communities were prioritized for funding. Other
projects receiving grants include wildlife mitigation, microgrid development, climate
adaptation, battery-based resiliency, rebuilds and replacements, HVDC, distributed
energy management, digital automation, grid hardening, community energy, thermal
electrification, solar congestion management, rural resilience and modernization,
analytics and control, synchronous condenser conversion technology, and interconnection
queue study and portfolio management. Each project is listed on DOE’s website
with a link to the particulars.
References:
Electric
grids could be the ‘weak link’ of clean energy transition, IEA warns. Robert
Walton. Utility Dive. October 18, 2023. Electric
grids could be the ‘weak link’ of clean energy transition, IEA warns | Utility
Dive
Electricity
Grids and Secure Energy Transitions. International Energy Agency. October 2023.
Electricity
Grids and Secure Energy Transitions (windows.net)
DOE
announces ‘largest-ever investment in America’s grid,’ giving $3.5B across 44
states. Robert Walton. Utility Dive. October 19. 2023. DOE
announces ‘largest-ever investment in America’s grid,’ giving $3.5B across 44
states | Utility Dive
Grid
Resilience and Innovation Partnerships (GRIP) Program Projects. U.S. Dept. of
Energy. October 18, 2023. Grid
Resilience and Innovation Partnerships (GRIP) Program Projects | Department of
Energy
The
IEA’s 50-Million-Mile Pipe Dream. Robert Bryce. LinkedIn. (24)
Activity | Robert Bryce | LinkedIn
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