New hope for US power grid expansion as bill lands in Senate

Markham interviews Rob Gramlich of Grid Strategies in Washington, DC.

What is Energi Talks?

Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.

Markham: 00:04

Welcome to episode 336 of the energy talks podcast. I'm energy journalist, Markham Hislop. This episode is about the Energy Permitting Reform Act of 2024. Bipartisan legislation introduced by independent senator Joe Manchin of West Virginia and republican senator John Barrasso of Wyoming. The bill, if passed and signed into law, will speed up the approval and construction of new electricity sector infrastructure, like transmission lines.

Markham: 00:34

The legislation was praised by most clean energy groups including my guest, Rob Gramlich of Grid Strategies in Washington DC. So welcome to the Energy Talks, Rob.

Rob: 00:45

Thank you, Mark. I'm great to be here.

Markham: 00:47

Well, this is I mean, you know, the, the permitting process and the length of time it takes to get permits has been a hot topic of Tonbridge conversation for years now down in the US. What is it about this bill that looks like it's gonna break the the logjam?

Rob: 01:07

Sure. Well, it is truly a bipartisan bill. The teams for the senate energy committee, majority and minority, Republican and Democratic, teams worked together very closely over many months to hammer this out. And, of course, you know, any legislation is fraught these days. It's hard to pass even just bills keeping the government open, you know, or the debt ceiling type type bill.

Rob: 01:34

So I I don't wanna overstate any any bills probability, but, you know, there is a pathway potentially. I think the senate energy committee members are largely on board in principle with it. There are challenging issues for all of them. But I I could see where I could get through the Senate Energy Committee. And then, you know, the next thing would be, not so much full Senate action quickly or house action.

Rob: 02:02

The house is just very difficult to do anything in, but more likely just sort of quiet a quiet period. And then, lame duck is a period where a lot of things can get, get passed. They can get attached to must pass legislation. If there aren't, you know, if they're not a huge groundswell of opposition, then they can get attached. And with the right, you know, set of votes on the on the base bill, things can get through.

Rob: 02:30

So it's got a real shot.

Markham: 02:32

Is, the fact that, president Biden has announced that he won't run again and it looks, like, at this point anyway, senator, sorry, vice president Kamala Harris will be the the the democratic candidate. Does is that what makes this a lame duck period?

Rob: 02:49

No. I just think it's normal. You know, every 2 years, there's an election, and, it's very difficult in the months leading up to any election, especially a presidential year election to pass legislation. You know, people, you know, members running, they don't wanna do anything that upsets their base, and there's always something in any bill that upsets somebody. So it's just kind of that normal 4 year dynamic.

Rob: 03:14

And, that's why, you know, there's been a lot of important things passed in the, you know, November, December, early January period before the next congress starts.

Markham: 03:27

Now I I was looking over the bill, while I was reading an article about the bill in utility dives, which does a pretty good job on, on this kind of a a news story. And it's a alleged it looks like legislation with a a lot of, important issues that are addressed. Maybe you could give us an overview of the bill, please.

Rob: 03:47

Sure. Of course. I focus mostly on transmission. That's what I do. So there's a lot of language on transmission, but there is also language on, minerals, which, you know, are useful for clean energy, and on, some generation, like, geo thermal and hydro permitting, which are also important clean firm sources, of power.

Rob: 04:10

And but there's also Republicans, you know, wanted some changes that are relevant for fossil infrastructure. So this is the balance that every member is gonna have to say, well, does the good stuff I like outweigh the bad stuff I don't like? On the transmission part, which I can talk a lot about, it addresses what I call the 3 p's, planning, permitting, and paying. There's a heavy focus on the interregional type of transmission line, And that's, you know, that's the thing that hasn't been addressed by the Federal Energy Regulatory Commission, FERC FERC did as many of your listeners may know, issue an important milestone order 1920 on regional, which is intraregional transmission. They haven't acted on interregional.

Rob: 04:56

And, you know, probably their legal authority is, you know, a little bit weaker in the interregional space. And in this kind of post, you know, Chevron era and, you know, major questions doctrine, legal era, sure helps to have some specific direction and guidance from congress for agencies like FERC to act. So I do think the, you know, the policies are well crafted, and I I do think they'll help get a lot of transmission built.

Markham: 05:26

Now this part of it is fascinating to me as a Canadian, Rob, because, we're just now starting to see Canadian utilities respond to the issue of increasing generation. We saw BC Hydro, release its 10 year capital plan 3, 4 months ago, and they're talking about transmission inside the province, because they and they think they're probably by 2050, they're gonna have to increase generation by 2 or 3 times, on and on and on. So most of the provinces are just beginning to grapple with this. Transmission is not being discussed in only in a very minor way, and the thing that is absolutely not being discussed is interprovincial transmission. And so the fact that the US is now putting together not only regional transmission and with with regional markets and all of the supporting infrastructure, but interregional.

Markham: 06:27

And everything I've talked to or, you know, when I talk to experts about this, they say, look. If we're gonna go to intermittent renewables, you need to be able to trade electricity over over very, very large markets and so that you can shift electricity around amongst, you know, those who have surplus, those who who need it. And I I under I see the the the rationale here. And my question for you is, do the Republicans see the rationale?

Rob: 06:58

So very good questions. The Canadian need, I think, is similar to the need in the US and other, countries and continents of this interregional transmission. I, you know, I do hope Canadians look at this as, hopefully, some inspiration. We probably need to get past just being a bill and to, you know, farther along. And, you know, you can also look at Europe.

Rob: 07:23

They have, you know, their their association. And so we've and the EU are involved in interregional, transmission requirements. There's a, you know, sort of a minimum transfer capacity type of requirement all around Europe now. They're building up all kinds of what they are calling interconnectors between countries. And, so that's just really important.

Rob: 07:46

You look at a, you know, a continent like Europe where, you know, they've got a more rapid energy transition because they're trying to get off Putin's gas. Right? So they're trying to electrify, and so they got low growth and they've got electrification going in spades and in a regional transmission is critical to that. So from an energy security and load growth standpoint, it is really important. It's never easy.

Rob: 08:11

It's not easy in the US, not easy in Canada. But I, you know, I I do hope it proceeds. And then you asked at the end also about If the Republicans are on board with this. Republicans are on board. You know, I do think, privately, they do see the need, especially as, like, low growth driven.

Rob: 08:31

You know, they'd much rather have things like data centers and the AI that's being used in data centers be based and, you know, housed in data centers in North America versus China or unfriendly countries. And they see that the grid is basically constrained, probably the generation and the transmission. And so I think they privately see this is a real need. You know, reliability, they care about resilience, they care about from severe weather, low growth and economic development, they really care about. And so I think that is starting to change the, the view of transmission for Republicans on the hill.

Markham: 09:12

I wrote a column last week, and I, accessed a number of sources, including speeches from people like Janet Yellen and, Gina Raimondo. And the point of it was that the energy transition in the US and to a large extent in China is being driven by, national security and geopolitical ambitions. And and, you know, the US has made it very clear that it doesn't want to be vulnerable to China, China supply Chinese supply lines, supply chains. And so the build out of transmission and other infrastructure to support more generation, is it being sold or debated as a geopolitical and national security issue?

Rob: 10:00

It it is to some extent. You know, it's a little bit of a a new, you know, interest group coming into the picture, but I do think there are very important national security related groups that have realized, oh, wait a minute. You know, we need to get more. We gotta exploit this major domestic power source. There are major national security implications, not the least of which is just powering military bases.

Rob: 10:26

I mean, microgrids are great, but they don't power the entire, base or the community around it from which all the employees come to actually make the base function. So they need, military bases as well as, you know, from, you know, again, data centers and other sensitive facilities. Chip manufacturing, they want that here. They use a lot of power. And then just, of They want that here.

Rob: 10:45

They use a lot of power. And then it just, of course, exploring domestic versus, you know, as opposed to relying on foreign resources. So it is coming out. So groups like CSIS, a center for, oh, boy, security I forget what it mean, but it's a long standing, well respected, sort of right leaning think tank, national security think tank here in Washington, and they've been very strong for transmission. And there are other groups like that doing the same.

Markham: 11:12

Now one of the headlines we've seen in the last, year in particular is the amount of solar that's being built in the US. And we're seeing some more of the, some of the the the offshore wind in particular that had been canceled is coming back on stream. And to what extent is this bill and the concern over, transmission now, being driven by the fact that the US is going to, really significant amounts of solar gonna be constructed over the next 5, 10 years?

Rob: 11:44

Yeah. Well, the solar industry is very active in promoting transmission now. There are a lot of projects. You know, we have 2.6 terawatts of, generation projects tied up in interconnection queues. Solar is the biggest of those.

Rob: 12:01

And so, they are an active interest in this discussion. Of course, you know, politically, when you get on the hill, it tends to be the Democrats who care more about solar and clean energy development as a driver. But, you know, not not only them. You know, Republicans are not anti solar. They're a little bit more sort of, you know, playing the political leverage game of, well, if you want transmission for clean energy, I'm gonna withhold my support until I get something that's top of my priority list.

Rob: 12:31

And so, you know, that's kinda what's going on and that, you know, that posturing takes place until they finally, you know, get real, like they've just done to kinda sit down and hammer out a bipartisan deal. Now, again, we only have 2 senators who are, so far supporting this, and there's a long way to go, but that's, you know, hopefully, we're we're getting there.

Markham: 12:53

Rob, on behalf of Canadians everywhere, we're shocked shocked that congress is horse trading. Yeah. That's right. We've never seen that before. Rick, I'm, this is an issue that's come up in many conversations, of late, and that is, planners being required to consider advanced conductors and reconductoring to maximize existing infrastructure and rights of way.

Markham: 13:18

And your focus is on transmission. How important do you think reconductoring is to this conversation?

Rob: 13:26

Yeah. I think it's very important. I've been thrilled to see it really, come center stage just over the last year. There is a, you know, physical opportunity to, replace a lot of old transmission cables that are 50, 60 years old with, much higher capacity, better performing, more resilient, cables that don't sag when they're hot and, can withstand more weather situations, and just deliver more power. We've got, limited limited rights of way.

Rob: 14:02

They're very scarce and dear. And if we can deliver twice as much power as we can with advanced conductors over those same rights of way, what a what a deal. You know, nobody when when you get into transmission permitting, policymakers do not, you know, like to get involved in in things that can lead to, you know, uncomfortable conversations with communities. And so the more you can do over existing rights away, everybody likes that. So, there's definitely a a role in this bill for that as there is in the FERC orders recently.

Rob: 14:39

You know, I my my hope is that there's so much interest now that we're only gonna be constrained by our manufacturing capacity because there's only, you know, limited set of manufacturers of these types of cables, and they can only expand so fast. So it is it is very hot right now. I I hope they you know, it's pursued to the maximum extent as our capacity is to build it out. I was, talking to, well, I was interviewing a group, a company

Markham: 15:08

that no. I take that back. It was a US Energy Association technical briefing. That's where it was. And one of the participants on the industry side headed up a company that makes the, the new lines, and his were made out of, out of graphite.

Markham: 15:26

And then they had some fancy the connectors, and the the devices that attach to the cables to the to the towers were made of a some super strong alloy that you know? Where I'm going with this, Rob, is that I've seen some experts speculating about the role of innovation like this in helping the US catch up to China or maybe leapfrog over China. And just given that we're having this conversation, what what's your general take on that, on the the amount the role that innovation will play in the next 5, 10, 15 years for the US as it chases China for clean energy leadership?

Rob: 16:13

Sure. Well, of course, you know, we start from a place where we have utilities who, unfortunately, are not really known for their innovation. And, you know, there's a couple structural reasons for that. One is obviously reliability is job 1. And, you know, you you got thousands of utility employees who need to make everything work, and they know certain technologies, and they don't know about other technologies.

Rob: 16:41

And they you know, there's a there's a lot of inertia there, in terms of, you know, resistance to doing things in different ways, number 1. And, you know, number 2, they don't always have the incentives that, suggest, you know, let's deploy certain technologies. That's true for some of the, like, the grid enhancing technologies, which are more the operational type. They don't really add to the utility rate base. You know, and then you have state regulators who are looking over every cost.

Rob: 17:09

And, you know, for advanced conductors, if you have to pay a little more, even if you get twice the performance, that's, you know, that comes under scrutiny. So it's just a very difficult industry to get a lot of innovation in. That said, there are some good utilities who are leading the way. We've seen PPL in Pennsylvania and a few other states do dynamic lane ratings. We've seen National Grid in a few places do a few technologies, including, you know, power flow control.

Rob: 17:38

We're seeing some in, the MISO area look at topology optimization, and we're seeing some advanced conductors. AEP did a line. They even, like, reconductor the line in Texas, hot. Like, you know, they didn't even have to take it out of service. So they're you know, we're we're looking for some utility leadership, and and, hopefully, those utilities explaining to their peers how how all these technologies can be deployed reliably?

Markham: 18:07

One of the, issues that comes up all the time developing new infrastructure is nimbyism, and that's true everywhere. Right? It's true in Canada. It's true in the US. What role is I mean, are we just stuck with this?

Markham: 18:22

Is is that there's gonna be local opposition and it's gonna slow things down? Or are there any provisions in this bill that will help grid planners and utilities and so on overcome the opposition from NIMBYs?

Rob: 18:40

NIMBYism is certainly widespread. I do think some things that can help are you know, number 1, that that raising the general awareness that our, you know, our our our energy transition depends on some transmission and a lot of, you know, wind and solar storage, you know, projects, that that does help. Certainly, I know here in the US with congress when when at least with the Democrats 3 or 4 years ago when they did this kind of as a house select committee on the climate crisis, and they did this sort of congressional review of all the things needed to decarbonize. Transmission showed up as a very high priority, and literally every single democrat in our congress supports transmission generally with some, you know, obviously, some details matter, but that's basically the case. And so, you know, if they find good reasons, and as I said before, Republicans are coming back around.

Rob: 19:48

Republicans were strongly supportive 20 years ago, and they're coming back around now because of load growth. So I think if, you know and that's policymakers. The general public also, similarly, I think they're starting to see more in the news and different places that, oh, you know, we have this clean energy transition, and we can get good, reliable, affordable, clean energy. We're just gonna have to, you know, deal with some infrastructure. You know, I think that helps.

Rob: 20:12

And then, you know, policy does help streamlining things like this permitting bill right now. It doesn't really it doesn't really change any fundamental environmental, threshold or, you know, standard. It's all process. Okay? And so if there's a way to achieve and meet that environmental standard with less, you know, just more efficient process, then that's, you know, that's what most policymakers wanna do, and hopefully, we'll get some reforms along those lines.

Markham: 20:44

Within this bill is a goal of permitting 50 gigawatts of renewable projects on federal land by 2030 and 30 gigawatts of offshore wind. How important is that?

Rob: 20:57

I I do think that's helpful for the agencies that are involved in that. For example, Department of Interior, and there's a, you know, a bureau that deals with offshore wind here. And they, you know, they have to issue these leases, and, it it sort of helps to have a, you know, have a goal of here's what you gotta do. Now if one particular location is really not suitable, fine. But proactively look for other other places, you know, to, to put those gigawatts.

Markham: 21:30

The, there's also the addition of federal geothermal lease sales. And I think, geothermal has popped back up on the radar in Western Canada, if not the rest of Canada. And a lot of it has to do with a company called Ever techno, Ever Technologies out of Calgary, which is advanced geothermal, and, you know, they basically took oil sands drilling technology, figured out how to drill a kilometer or 2 down into the rock where it's hot and put the tubes down there, join them, and make a big radiator or a series of radiators. And their their first commercial project is in, is in Germany. But it's raised the question that the the extent to which we, the western provinces could have dispatchable clean energy at a reasonable price.

Markham: 22:27

And I can't help but think that the US would be a big market for that. And is that kind of what this bill is to try to grease the skids a little bit for for for this advanced geothermal?

Rob: 22:42

Absolutely. Geothermal is a very exciting and, you know, sort of front running technology for this category of power that's now sort of taken hold in the at least in the US power sector called clean firm. So there's a recognition you need so called firm power, something that's there for the extended multi day wind lows and solar lows, you know, which solar would probably be in the winter or just a cloudy, you know, period. And, you know, as a recognition that can happen, you need other sources that are gonna be around more steadily. And so and, you know, long term, if we're gonna decarbonize, that's we need to move from firm to clean firm.

Rob: 23:27

And a lot of gas, of course, provides the firm now. And so, there is a lot of interest in that product. I can't say our market structures and market designs are, you know, super well suited yet for all the resources. Essentially, it's those resource resources are selling a different product from what wind and solar are selling, and we need to sort of have that type of sophistication in our procurement from utilities and and things like that. So there are more things to be done structurally.

Rob: 23:59

But in terms of permitting, I think the idea of this bill is to, you know, significantly speed up the permitting of these geothermal wells. Rob, let's close out

Markham: 24:10

the interview with kind of a a big overview question, and, my impression is that over the past, oh, we're gonna say 2 years, maybe it's 3 years, but we'll say 2 years, that the American recognition of the importance of shifting to, to clean electricity, has shot through the roof in the US, and there's a lot I mean, you know, I've been interviewing you for a while now, and we've talked about how the the infrastructure and markets and so on are are being reengineered to to accept all of this, but the pace seems to have really picked up in the last 2 years. The amount of investment that's being committed has picked up in the last 2 years. And where do you see all of this going over the next 2 to 5 years?

Rob: 24:58

Sure. Yeah. Well, I I do I agree we're on that trajectory. A few years ago, it was kind of these large energy buyers, the data centers, and the Walmarts, and the GM, and the others with corporate goals to really accelerate their buying. That's still a factor now, but then we also had the inflation reduction act that significantly, supported wind, solar, and storage, made all of those resources very cheap so utilities can really pursue them.

Rob: 25:25

And, of course, we have the technology advancement and lower costs, particularly from, PV and and storage, battery storage. So it's, it's really taking off. There's every single utility is talking about a lot of wind solar storage, and most of them are talking about, significant transmission, as well. And that's a change just in the last few years. So I I think that will continue.

Rob: 25:51

I think the inflation reduction act is the biggest single thing there. Obviously, it's a it's a federal law. Federal laws can be changed by future congress and president. I I think it's pretty safe politically. A lot of the investment, maybe 3 quarters happens to be in Republican held districts, which sure helps for, you know, maintaining support and a and a potential Republican, controlled Congress and White House.

Rob: 26:17

So I, you know, I think those things will continue. Costs, you know, usually come down. We get hiccups like interest rates are frustrating for our particularly for offshore wind and very capital cost heavy things. And one hopes they'll come down and one hopes supply chains, you know, clear up, but then, you know, there's certain minerals and materials that that get scarce. We have a huge shortage of just electrical equipment, switches, breakers, transformers.

Rob: 26:47

One hopes those will clear up. But there's, gonna be strong demand for all those things. So, you know, you can't can't be assured they will remain cheap or we won't have future hiccups. But, you know, barring those cost hiccups, I I do think the trends are very strongly positive for clean energy growth here.

Markham: 27:07

Well, Rob, thank you very much. Really appreciate this, and we'll look forward to our next chat.

Rob: 27:12

Alright. Thanks, Mark.