Integrated Grid More Important Than Ever

In the wake of President Trump’s inauguration, one thing has become very clear. If there is to be progress on climate change in America it will likely come from state, regional and international actions, not Washington, D.C. Given this new context, developing a regional electricity grid that brings clean energy to market more broadly, managed by a neutral system operator is more important than ever because even if federal policies favor fossil fuels, regional markets favor lowest marginal cost resources and that means renewable power.

We are actually well-positioned to continue to make progress on greenhouse gas reduction in the West. Due to congressional gridlock and coal-state litigation over administrative actions like the Clean Power Plan we already have a regional strategy on climate change. For the last several years a core of environmental, clean energy and consumer organizations have worked collectively to promote sub-federal efforts on climate and clean energy goals. Thus we have a firm foundation on which to build.

A number of western states, representing most of the electricity demand in the region, have progressive climate policies in place and have expressed determination to move forward, including California (which is now considering a proposal to expand and accelerate its clean energy goals, eliminating fossil fueled generation by 2045), Oregon, Washington, and Colorado. Nevada has committed to eliminating coal generation, has recently adopted new pro-renewable policies and is considering a proposal to expand its own renewable portfolio standard to 80% by 2040. Arizona has also sought to expand its use of renewable energy.

Even coal states like Utah, Wyoming and Montana have moved to develop their renewable energy resources, as they try to bolster their economies. Finding common ground with these states won’t be easy, but market trends away from coal are continuing, both domestically and globally, and finding a means to diversify coal-state economies will continue to be an urgent need. These economic forces will not be easily reversed by a Trump administration and they may form the grounds for progress on reforming the electricity grid and deploying large-scale renewable energy. But this common ground will only be found if the other western states—California in particular—agree to provide market opportunities for their clean energy.

Competition favors clean energy

That’s why we need a fully integrated western power grid to replace our current fragmented system where 38 different grid operators move electricity to homes and businesses across California and other Western states. This balkanized system means that renewable energy isn’t reaching its full potential in our western states. If the California Independent System Operator (CAISO) is integrated into a West-wide ISO with an independent board, open to all utilities and power plant operators, it will grow the clean energy market. We have a problem right now when California is throwing away clean energy from wind and solar plants while costlier fossil plants are operating elsewhere in the West, increasing utility customer costs and harmful carbon pollution.

But that’s fixable with an integrated grid. Instead of pitting conflicting state policies with each other, regionalization can provide economic benefits to all participating states. It provides a fair opportunity for all the states to develop their newer, cleaner renewable resources as demand for fossil fuels declines For states with climate policies, integration harnesses market forces that favor renewables because their low-to-zero marginal costs (fuel, operations and maintenance and regulatory compliance costs) attracts development interest and gives renewable energy sources an edge in the competitive market against conventional fuel sources like coal and gas. With an integrated, regional grid, state procurement policies will remain, but all western states can focus on ways to take advantage of declining energy costs while making the inevitable transition to cleaner resources.

And that would be good news for westerners, no matter what’s happening in Washington.

About the Authors

Carl Zichella

Director, Western Transmission

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