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Advanced grid technologies are needed to realize FERC's standard market vision.
Fortnightly Magazine - October 1 2002

markets for electricity? Unfortunately, it is far from clear whether this pricing approach will be sufficient to ensure that timely grid upgrades are made. After all, FERC is missing a key card in its hand, transmission siting authority. The states' rights tradition in utility regulation dies hard. Western and Southern governors and regulators see the proposal as an infringement upon local control. The harsh Congressional reaction to the suggestion of federalizing eminent domain for power lines, put forth in May 2001 by the Cheney Energy Policy Task Force, suggests that any renewed push in this direction will be a non-starter unless and until the nation is in deep crisis.

The awkward split in transmission jurisdiction arising from our federal system is truly the Achilles' heel of the SMD proposal. FERC policies can send the right market signal to market participants as to where new resources are needed. But they offer no assurance that least-cost solutions will be implemented. Thus the rule carries the possible threat that it could backfire, exposing customers to sharply higher prices in congested areas without assuring them the means of relief. FERC cannot rely on locational marginal pricing alone as a fix. It is unlikely to be given siting authority, and with reliability margins worn through in many regions, the nation simply does not have the luxury of waiting out regulatory logjams on energy infrastructure.

The Role of New Technology

New grid technology can play a key role in resolving this quandary-serving the federal goal of robust regional markets, while protecting state interests in land use and environmental protection. New materials breakthroughs have yielded a number of strategies that offer the potential to improve, even multiply, power flows through existing pathways and facilities-without the large-scale environmental impacts associated with traditional grid expansion projects. For example:

  1. POWER FLOW CONTROLS. FACTS (Flexible AC Transmission System) technologies to gain control over power system flows have been available for several years. A wide range of tools is available within the FACTS family to enhance grid flexibility. Uptake of these technologies, however, has languished in an environment of investment and regulatory uncertainty.
  2. MODULAR FACTS. Modular-scale FACTS devices, employing advanced electronics and superconducting storage, are now being deployed on wide-area grids as a cost-effective source of targeted voltage support. The mobility of these systems protects against the risk of stranded investment. The reconfigurable, "just-in-time" approach to grid design enabled by this technology is well-suited to today's environment of uncertainty, in which plant additions and retirements are driven by unpredictable competitive dynamics.
  3. COMPOSITE-CORE CONDUCTORS. Advanced, low-sag composite-core conductors now being tested on power grids could be restrung from existing towers. The ability of these conductors to run at far hotter temperatures could significantly boost peak power flow capacity, offering a cost-efficient solution on corridors where maximum loadings are experienced for a relatively few hours per year.
  4. HIGH TEMPERATURE SUPERCONDUCTOR CABLES. Perhaps the most dramatic advance in grid operation could be enabled by the adoption of high-capacity, low-impedance cable based on high temperature superconductors. Recent studies suggest that the incorporation of even short lengths of HTS