Dept. of Energy beefs up electricity transmission with new $60M

The U.S. Department of Energy has been generous in its support of smart grid efforts this year, granting $3.4 billion to utilities to transition to a cleaner, more efficient electrical grid, and backing companies of all sizes making components and energy management systems to change the way Americans use power. Today it is zeroing in on the transmission piece, announcing $60 million in stimulus funds for upgrading the country’s three major transmission grids.

The amount given may not seem like a lot, considering that the DOE handed out as much as $200 million in Smart Grid financing to individual utilities like Duke Energy. But it does demonstrate a more holistic government approach to the generation and distribution of power. Transmission is a major sticking point — power lines are expensive, much of the technology is antiquated, and there’s been controversy between some states over the movement of power across state lines. It’s clearly an area more deserving of attention.

Californians in particular care about these problems, because they receive much of their power, especially that generated from renewable sources, from out of state. This has allowed it to hold off on building capital intensive power plants, wind farms and solar arrays within its own borders.

Today’s announcement should also be good news for clean energy entrepreneurs. One of the big goals underpinning the transmission stimulus funds is to finally integrate renewable sources of energy on a large, national scale — bringing down the costs of using solar and wind power so that they can compete with coal and natural-gas fired generation. Companies like Silicon Valley-based Solyndra and SunPower and their investors should sit up and take note. This is the first time this issue has been tackled by the federal government across all three national grids.

As part of the funding announcement, the DOE says it has joined forces with the Federal Energy Regulatory Commission (FERC) to make the three interconnections, the Western, Eastern and Texas, sign a memorandum of understanding that they will work together on transmission planning and execution. The agencies responsible for managing these grids in turn say they will use the money to upgrade equipment and draw up plans for fast growth over the next several years.

So far, the various interconnections have been very separate. Adding new power plants to any one of them, or changing the routing of transmission line seriously impacts the entire system. So knitting the three together poses an enormous challenge. It could also have many advantages — including more streamlined delivery of renewable power from advantageous regions to where electricity is needed. For example, the American southwest is particularly well suited for solar power, whereas Idaho is not. However, giving communities in Idaho access to this energy would be a big step forward for the solar industry and for average utility customers. A real-world example of this is the Shepherd’s Flat wind farm slated to be built in Oregon, which will channel energy to customers of Southern California Edison.

One company working more seriously to unite the three interconnections is Tres Amigas. It wants to build a massive electric transmission station in New Mexico that could act as a hub for all three national grids. With an initial capacity of 5 gigawatts, it would route energy through underground superconductor pipelines equipped with AC/DC converters to provide seamless transmission between one region and the next. But before this can happen, Tres Amigas first needs to win FERC’s approval. The fact that the commission is in favor of the three interconnections working more closely is a good sign. It’s unclear whether the government’s new interest in transmission will impact the project.

Two agencies for each of the three interconnections received varying amounts of the stimulus money. Here’s how it broke down:

Eastern Interconnection Planning Collaborative — $16 million
Eastern Interconnection States’ Planning Council — $14 million

Western Electricity Coordinating Council — $14.5 million
Western Governors’ Association — $12 million

Electric Reliability Council of Texas — $2.5 million
Electric Reliability Council of Texas for work with state government agencies — $1 million

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