PJM puts transmission upgrades for onshore renewables and offshore wind at up to $3.2 billion

PJM puts transmission upgrades for onshore renewables and offshore wind at up to $3.2 billion

Energize Weekly, August 18, 2021

The PJM Interconnection – the nation’s largest grid operator – estimates that it will take between $2.2 billion and $3.2 billion in new transmission investments by 2035 to accommodate the system’s growing onshore and offshore renewable energy generation.

PJM’s report on transmission costs upgrades was done at the request of the Organization of PJM States, which represents regulators in the 13 Mid-Atlantic and Midwestern states served by the grid operator. PJM serves parts or all of those states.

The price tag for the addition of transmission lines and transformers varies depending on the scale of new renewable resources.

The study notes that 11 of the states – New Jersey, Pennsylvania, Virginia, Maryland, Delaware, North Carolina, Michigan, Indiana, Ohio and Illinois – and the District of Columbia have renewable energy portfolio standards requiring a portion of their electric generation to come from renewable sources.

Indiana has, for example, a 2025 target of 10 percent renewable generation, New Jersey a 2030 goal of 50 percent renewables and Virginia 100 percent renewable generation by 2050.

The grid could also face as many as nine offshore wind farms along the coasts of New Jersey, Delaware, Virginia, and North Carolina, with a total 17,000 megawatts (MW) of generating capacity.

The study did a range of scenarios and costs from one with six wind farms with 6,400 MW of capacity and a grid upgrade cost of $627 million to the more likely 12,00 MW to 17,000 MW scenarios costing $2.2 billion to $3.2 billion.

“Those numbers may seem large, and they are, but they’re surprisingly low given the scale of the buildout,” Tom Rutigliano, a senior advocate at the Natural Resource’s Defense Council’s Sustainable FERC program, said in a blog post.

“The estimated costs for transmission work out to only a few percent of the cost of the necessary solar and wind supply,” Rutigliano said.

The estimates include the costs of onshore transmission to integrate wind energy into the grid, but not the cost of lead generator lines or other offshore facilities, PJM said.

The study did not include a cost-benefit analysis, although it said would lead to a decrease in carbon dioxide emissions for the system, with a higher percentage emission decrease in the coastal states.

The transmission improvements would also make the grid more efficient in handling renewable generation. “Wind curtailment across PJM footprint decreases due to reliability transmission upgrades,” the study said.

“It’s great to see the PJM Interconnection – the nation’s largest grid operator – breaking the mold and starting work on transmission planning that plans for a cleaner, brighter future,” Rutigliano said.

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