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Paying for the Green Grid

Subsidies might not be the best solution for interconnecting renewables.

Fortnightly Magazine - April 2009

of construction to all of the available alternatives, the reasonable conclusion is that they should be built. Yet, project developers should be making these judgments, based on projected generating capacity, anticipated demand and cost and efficiencies of the facilities. There is no need for legislation that prejudges the result.

As proponents of the new transmission superhighway suggest, the nation’s experience with the interstate highway system provides an instructive example. The lessons learned, however, might not serve proponents’ position. Good work has been done over the years demonstrating that the nation’s commitment to the interstate highway system had the effect of crowding out other transit resources, undermining urban centers and contributing to suburban sprawl. 8 The U.S. experience in this respect has been compared unfavorably to the European one, in which mass transit between, and within, urban centers encouraged far better use of land resources, the preservation of strong urban centers, and not nearly so great a reliance on automobile travel. This experience gives rises to an inescapable conclusion: Subsidizing the interstate highway system foreclosed a range of alternatives that became uneconomical by comparison, and would have been more environmentally benign.

Cost socialization of the proposed electric grid build-out probably would have a similar effect. While the need to respond to an RES and carbon-control measures should engender a myriad of responses, some local and some centralized, the massive investment contemplated by transmission superhighway proponents leaves room for only one answer as a matter of economics, and a costly one at that. We can do better.

 

Endnotes

1. See www.awea.org (“Green Power Superhighways; Building a Path to America’s Clean Energy Future ”).

2. See mydocs.epri.com/docs/public/DiscussionPaper2007.pdf; and http://www.mckinsey.com/clientservice/ccsi/greenhousegas.asp.

3. Case No. 07-1651, 4th Cir., Feb. 18, 2009.

4. See Southern California Edison Co., 121 FERC _ 61,168 (2007).

5. 119 FERC _ 61,061 (2007); reh’g denied, 120 FERC _ 61,244 (2007).

6. 126 FERC _ 61,124 (2009).

7. See Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC 61, 227 at 61,745 (1999).

8. Dunn, J.A. Jr. Miles to Go European and American Transportation Policies , MIT Press, Cambridge, MA (1981); Jackson, K.T., Crabgrass Frontier: The Suburbanization of the United States , Oxford University Press, New York, N.Y.U. (1985); Muller, P.O. “Transportation and Urban Form: Stages in the Spatial Evolution of the American Metropolis.” In The Geography of Urban Transportation , 2nd ed, edited by S. Hanson, The Guilford Press, New York, NY (1995), pp. 26-52. For a good summary of this literature, see Schwager, D. “Consequences of the Development of the Interstate Highway System,” Federal Transit Administration, Transit Cooperative Research Program, August 1997, No. 2.

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