The Electricity Interstate: Part I
Achieving the goals of our new energy laws
Michigan’s newly minted energy laws (Public Acts 341 and 342) require achieving no less than a combination of 35% renewable energy and energy waste reduction by 2025. Electric Utilities like Warren Buffett’s MidAmerican Energy, which in 2017 is expected to generate over 60% of its electricity from wind farms, have some of the lowest electricity rates in the nation. At the same time, however, local communities in Michigan are voting down new wind projects making it difficult for electric utilities to reach their renewable energy goals and for ratepayers to enjoy low electricity rates. Another pathway to achieving these goals is to import renewable energy from outside the state. This requires more of a “systems thinking” approach to provide low cost, clean, and reliable energy solutions.
Systems thinking
The power grid, its generators and loads, are a “system” in which each component of the system interacts with the others and they are all interdependent. Systems thinking often results in strikingly different conclusions than one might normally expect when only looking at the individual parts of a system. In a well-designed system the whole can be greater than the sum of its parts. This makes it extremely effective in dealing with problems involving complex things, like electricity flows. Systems thinking in energy means we need to expand our view to take into account a much larger number of interactions, especially including interactions outside our state. It helps that Michigan is already part of the Midcontinent Independent System Operator (MISO), a 175,000 MW, 15-state regional electricity balancing system.
The benefits of a large electricity balancing system
A large electricity balancing system allows for the possibility of many different electricity supply options. It is the total supply and demand within the balancing system that really matters. With a large grid with strong interconnections variations often cancel themselves out. When needed, you can borrow electricity from another part of the electricity balancing system, which helps to smooth out supply side and demand side variability. It is also much easier to accommodate a larger percentage of variable generation within a large electricity balancing system. In order to more fully take advantage of this relationship with MISO, there needs to be more and stronger transmission ties into the western MISO states, where there is also a lot of cheap - and clean - electricity. Just compare Michigan’s electricity rates with states in EIA’s East and West North Central regions.
HVDC Transmission and the Electricity Interstate
According to the US Energy Information Administration (EIA), in 2016 transmission costs represented only about 11% of the price of electricity, while distribution costs are 32% and generation costs are 57%. The EIA also estimates that electricity transmission and distribution losses average only 4.7% of the electricity that is transmitted and distributed annually in the United States. A High Voltage Direct Current (HVDC) transmission link can transmit 2500 MW of power at 800KV over a distance of 500 miles with a loss of only 2.6%. For lines of about 375 miles and longer, HVDC is cheaper than AC technology. For underground or underwater lines >50 mi HVDC is also cheaper than AC technology.
Back in the 1950s, the US was connected haphazardly with narrow roads built by state and local governments. President Eisenhower predicted that cars would soon become ubiquitous so he hatched a plan for an ambitious expansion of the nation’s highways. These days we can predict that more low cost variable electricity generation is coming on-line, so why not invest in creating a new electricity interstate much like Eisenhower did to allow for more widespread and efficient car travel? This would provide Michigan ratepayers with access to a larger, cleaner, and more diversified electricity supply.