The North American Electric Reliability Corporation (NERC) has released in long Term Reliability Assessment report highlighting the needs for the transmission grid. 
“The economic recession has essentially bought us a few years to address capacity and resource concerns across North America,” commented Mark Lauby, Director of Reliability Assessments and Performance Analysis at NERC. “But the ‘benefits’ of reduced demand growth are expected to be short lived. The time is now to address concerns like transmission siting, secure smart grid implementation, and the integration of renewable resources.”
The Recession buys Time not Solutions
Electricity demand growth is expected to be uneven across regions with some like ERCOT seeing record peak demand despite overall the peak demand forecast for 2009 decrease by four percent from forecasts projected in 2008.
Energy efficiency and demand response resources are expected to account for about 40,000 MW (or four percent) of the peaking resource portfolio by 2018, effectively offsetting peak demand growth by nearly five years. But efficiency and demand response are fickle and can be reversed quickly by changes in consumer behavior. A key portfolio risk question for every utility will be how to measure the sustainability of efficiency and demand response. As an aside the recent growth in market penetration for flat screen TVs ate up much of the energy efficiency gains from traditional appliances won over the preceding 20 years.
Over 260,000 MW of New Renewable Resources is included in NERC Forecasts. New renewable “nameplate” capacity is 96 percent wind (229,000 MW) and solar (20,000 MW). But only 38,000 MW of wind and 17,000 MW of solar are projected to be available at times of peak demand. NERC says integration of this volume of “energy-dominant” resources (or those resources predominately available during off-peak hours) will require significant changes to traditional planning and operating techniques to ensure reliability.
While Coal Market Share is Eroding, Coal is Not Going Away Soon
No surprise is the finding that by 2011 natural gas is projected to overtake coal as the dominant fuel source for peak capacity generation in North America. By 2018, natural gas is projected to account for 32 percent of the on-peak resource mix. Natural gas-fired generation is typically easier to site, has shorter construction times, and has lower carbon emissions than other types of traditional generation, making it an attractive option for utilities and independent power producers. Preference for the gas over the ten-year NERC forecast period, as installed, “nameplate” natural gas capacity is projected to increase 38 percent while coal is projected to increase by only six percent.
Renewables Integration now Ranks Even with Reliability as a Driver of new Transmission Need –
Over 11,000 miles of the total 32,000 miles of transmission (200 kV and above) proposed and projected in this report must be developed on time to ensure reliability over the next ten years. This will require entities to more than double the average number of transmission-miles constructed over any five-year period since 1990.
This will NOT happen as long as electric transmission siting remains fragmented across the states. In the 2001-2005 period only 3,000 miles of electric transmission lines were built of which ONLY 628 miles crossed state lines compared to over 13,000 miles of natural gas pipelines permitted by FERC and built in the same period.
US DOE is not sitting on the release of its National Interest Electric Transmission Corridor Report which was due to Congress last September. US DOE candidly says the delays are due to the need for clearance from the White House to release the report. This is code for there are some political sensitivities for members of Congress in this report that need massaging before we release it to the public. The bet is that US DOE will propose additional NIETC renewable energy corridors and seek to expand Federal involvement in speeding transmission construction.
The scalability and sustainability of renewable energy depends upon broad access to markets for remote renewable resources. Fragmentation undermines that goal as well as the achievement of state renewable portfolio standards and the quest for emissions reduction from clean energy resources.
The biggest impediment to the Nation’s policy goals of expanding the use of clean and renewable energy and reducing greenhouse gas emissions is the fragmented, balkanized and aging electric transmission grid. All the Smart Grid investment being poured into the system will be useless unless that technology can interconnect the new clean energy resources the market demands with the customers who want it.
Put it in perspective, during the same period from 2001 to 2005 the US built 13,000 miles of natural gas pipelines under FERC jurisdiction to meet the energy needs of our then growing economy but we only managed to build 3,000 miles of electric transmission under the fragmented jurisdiction of the states and only 628 miles of that crossed state lines.