Energy Dept. Pours Billions into Power Grids but Warns It’s Not Enough

The Energy Department on Monday announced $1.3 billion to help build three large power lines across six states, part of a new gusher of money from Washington to upgrade America’s electric grids so they can handle more wind and solar power and better tolerate extreme weather.

But officials warned that money won’t be enough. In a major report published the same day, the Energy Department said that the nation’s vast network of transmission lines may need to expand by two-thirds or more by 2035 to meet President Biden’s goals to power the country with clean energy.

That would help slash carbon dioxide emitted by gas and coal-fired electric plants — pollution that is heating the planet. But it would require hundreds of billions of dollars in investment and a frenzied pace of construction. “We need to seriously build out transmission,” Energy Secretary Jennifer Granholm said.

There is no single grid. The nation’s electric system is divided into a patchwork of regions, each overseen by different operators. But many face similar challenges.

A major one is that there isn’t enough transmission capacity to carry power from far-flung wind and solar farms to population centers. Many regions are at risk of blackouts during heat waves or powerful storms, which are expected to worsen with climate change. Aging infrastructure needs to be replaced.

The Energy Department’s report, the National Transmission Needs Study, looks at which places would benefit from new or expanded power lines. For example, customers in parts of Wisconsin and Michigan pay high prices because local grids are too congested to bring in cheaper power from elsewhere. The Mid-Atlantic’s grid is vulnerable to electricity shortfalls during winter storms because it lacks sufficient capacity to import power from its neighbors.

But there are major barriers to grid expansion. While the study found that new transmission capacity between different regional grids would have large benefits, hardly any such projects have been built in recent decades, since they can require approval from more than one state or jurisdiction, leading to disagreements over who should pay.

The federal government has limited authority to direct grid planning, in contrast to the way it oversaw the Interstate Highway System. Some regions, like Texas and the Southeast, have resisted expanding transmission ties with their neighbors. And some utilities are wary of new long-distance lines that might undercut their local monopolies.

The Biden administration wants to use the limited tools at its disposal. As part of the bipartisan infrastructure law in 2021, Congress approved more than $20 billion to upgrade America’s power grids. The Energy Department has started sending much of that money out the door in recent weeks.

As part of Monday’s announcement, the agency will negotiate a commitment to buy capacity from three proposed transmission projects: a 748-megawatt power line carrying renewable energy from New Mexico to Arizona, a 1,200-megawatt line bringing Canadian hydropower to Vermont and New Hampshire and a 1,500-megawatt line linking Utah and Nevada.

By acting as an initial customer, the agency hopes to give developers confidence to move forward with these projects. The government would later sell its rights to private customers and replenish its funds, so that it could help other grid proposals.

“This is an extremely promising program,” said Rob Gramlich, president of the consulting group Grid Strategies. He noted that many transmission projects are plagued by a “chicken or egg” problem: Developers won’t build power lines to windy or sunny regions until there are customers, but renewable projects won’t get built until after the lines are in place.

Still, Mr. Gramlich said, the agency’s $2.5 billion program to alleviate this issue can only support “a very small set of lines.”

Separately, the Department of Energy this month announced $3.5 billion in grants for 58 different projects to harden power lines against extreme weather, integrate batteries and electric vehicles into local grids and expand capacity for wind and solar power. That included $464 million for an effort to connect two large regional grids in the Midwest and Great Plains.

Together, those projects could help increase U.S. renewable energy capacity by 10 percent, Ms. Granholm said.

The agency has also offered $300 million to help states, tribes and local governments improve their permitting processes for power lines. Some recent projects, like the SunZia line in New Mexico, have spent more than a decade trying to acquire permits.

Other, more contentious moves may be forthcoming. Congress has given federal regulators authority to override objections from states for certain power lines deemed to be in the national interest. The Biden administration has yet to wield this power, though it said the study released Monday could help identify potential projects.

A truly enormous grid expansion might require further action from Congress, such as a bill floated by Democrats to require greater grid connectivity between regions. But some utilities and Republicans have criticized that proposal.

In the meantime, technology might help. New types of sensors and software can help utilities send more power through existing lines without the need for costly upgrades, said Julia Selker, executive director of the WATT Coalition, which advocates for so-called grid-enhancing technologies. But most utilities have yet to adopt these tools.

“We’ll still need a big build-out in transmission, but these are technologies that can be deployed in a year or less,” Ms. Selker said. “That’s a huge help while we’re waiting several years to build large new transmission lines.”