Congestion on the decarb superhighway
Transforming the grid to enable far higher penetration of renewables as well as increasing electrification of our economy is an enormous challenge (and opportunity). I’ve touched on this topic at various times in previous posts (distributed energy resources, cleaning Europe’s grid). Transmission infrastructure is now emerging as one of the gnarliest bottlenecks to decarbonisation, so I wanted to do a post fully dedicated to it. It is a huge topic, so I haven’t to be comprehensive here, but have liberally linked to further content throughout. My jumping off point was a top-notch Catalyst pod with Liza Reed. I also leaned heavily on an excellent series of posts fromat . There are many areas I didn’t manage to touch on here, but look forward to tackling in future posts.
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Transmission vs distribution: Transmission refers to movement of large amounts of power, generally over longer distances. Distribution refers to the movement of smaller amounts of power at a local level, i.e. the overhead lines you might see in your neighbourhood.
High voltage transmission: Transmission over long distances is done at much higher voltages to reduce energy losses. This is because, for a fixed amount of power, current decreases as voltage increases. If you think of the power as a flow of water through a pipe, the current is the volume of water in a given section of pipe and the voltage is the speed or pressure with which it moves through it. It is important to have a lower current because transmission losses are proportional to the square of the current. So, for a given level of power, if you increase the voltage by a factor of 10, you reduce the current also by a factor of 10 and therefore reduce the transmission losses by a factor of 100.
What are power cables made of? Mostly aluminium. Aluminium isn’t quite as conductive as copper, but it is much cheaper (roughly USD 2k / ton vs USD 8k per ton for copper at the moment). Power cables have a strong core, normally made of steel, which supports the cable and reduces sagging, whilst the power is transmitted through aluminium wires wrapped around the core. This construction is known as ACSR (aluminium conductor, steel reinforced) and has been around for 100 years. There are other combinations that use different composites for the core or slightly different forms of aluminium that may have higher strength at the expense of higher resistance.
Innovation in power cables: An exciting prospect is the development of higher capacity cables that would allow existing transmission lines to carry more power and therefore add grid capacity without having to navigate permitting for new lines. For example, TS Conductor has developed a cable with a carbon composite core that enables it to carry more aluminium to carry power and claims to reduce transmission losses by 35-50%. They have been backed by Breakthrough Energy Ventures and National Grid Partners. Lines could also be switched from AC to DC, often using existing wires and adding converters at either end to switch the current.
Interconnection challenges: As referenced a number of times before in this newsletter, getting connected to the grid is a major bottleneck for expansion of renewables. The definitive snapshot for the US is compiled by Berkeley Labs here. In the US, there are now more than 1TW of queued projects including 676GW of solar and 247GW of wind (77GW offshore). This is almost as much as the entire existing national generation nameplate capacity. Slightly less than a quarter of projects are making it from initial application through to operation. The queue length is causing bad incentives to put in a speculative application to hold a spot in the line, further complicating processing as it is harder for system operators to plan. Wind and solar projects approved coming online in 2020 (latest data) took 4-5 years to get there from initial application.
New technologies for more transmission: Technologies that allow us to use the existing grid more effectively are known as Grid Enhancing Technologies (“GETs”). This report from Brattle group suggests that GETs could double the amount of renewable electricity absorbed by the grid before building new transmission. Examples of companies in this space include Line Vision (which accurately assesses the amount of power that can be handled by lines, “dynamic line rating”, backed by Clean Energy Ventures and National Grid) and Smart Wires (which directs power down particular route, not just following the natural path of least resistance, “flexible alternating current transmission system”, now public, most recently backed by Lime Rock). The Federal Energy Regulatory Commission (“FERC”) is now considering rules that mandate that GETs are incorporated into transmission planning. Other technologies make new transmission better (e.g. high-voltage, direct current or “HVDC” lines) and there is also software like Pearl Street (backed by Powerhouse, Incite, and Volo Earth) that helps the modelling of new generation coming onto the grid, which is one of the interconnector bottleneck.
Undergrounding transmission: Putting AC power lines underground is challenging because the ground itself creates stability issues, meaning that it can only go 60-150km underground. DC doesn’t have these issues and the newest DC tech using something called “voltage source convergence” allows it to be more easily integrated with AC distribution. One option for accelerating the deployment of underground lines is to put them along existing highways where the ground which reduces permitting challenges, has inbuilt access, and anticipates road transport electrification. A study laying out this “NextGen Highway” concept available here. SOO Green is a 2.1GW HVDC project currently underway, connecting the MISO grid to Chicago and the eastern PJM grid utilising existing right of way along a rail way.
Storage As Transmission Asset (SATA): A form of grid balancing services that batteries can provide to the grid, by absorbing power from at times of congestion or dispatching when lines are under-utilised. SATA projects have many advantages in terms of speed to market, flexibility and cost. Germany is forging ahead and recently announced the world’s largest SATA project at 250MW. However there are challenges to this in the US where utilities are trying to secure a monopoly on SATA projects with all the incentive misalignment that is inherent to the utility model of fixed return on capex. More on that from Volts here.
Permitting reform: Essential if clean energy goals are going to be met. Senator Manchin’s permitting reform bill, which would have streamlined a lot of the process, didn’t get very far in its initial iteration, but he’s now working on slipstreaming it via another route. The challenge with the current set up in the US for long-distance transmission is that there is no federal authority for siting, but each state it passes through needs to approve it and there are multiple veto points. This stands in contrast to how gas pipelines are permitted where the federal government can forcibly acquire right of way through “eminent domain”.
High-temperature superconductors: Something of the holy grail and still some way out, “high-temperature” (here being a relative term) superconducting materials that are just that bit further away from absolute zero and radically reduce resistance and allow a lot of power to be transmitted at low voltage. The low temperatures have made deployment challenging, but just two weeks ago Veir (backed by BEV and Congruent Ventures) announced they were working with National Grid to demonstrate their technology. Another company working on this technology is Supernode, who also recently received funding as part of a consortium under EU’s SCARLET project, which is seeking to accelerate the development and commercialisation of the technology.