If all goes as planned, a virtual 1,000-megawatt power plant will "open" for business near Erie, Pa., in 2019. It would be just in time to help fill the void left by some of the coal-fired plants that are shuttered or scaled back in the PJM Interconnection in response to U.S. EPA's climate and environmental rules.
The power will originate not in Pennsylvania, but in Ontario, Canada, transmitted beneath Lake Erie on a billion-dollar, high-voltage direct-current (HVDC) power line.
The project, developed by a unit of Michigan-based ITC Holdings, illustrates the potential of DC transmission lines to address some of the challenges of EPA's proposed Clean Power Plan, experts say.
DC lines can connect energy-short parts of the grid with new, distant alternative power supplies from carbon-free or low-carbon generation. Most of the power for ITC's project will come from Ontario hydro dams.
"You're going to see power plants closing," said Terry Harvill, ITC's vice president for international and merchant development. "Here you have 1,000 megawatts of relatively clean power coming into the PJM market.
"I don't think it's a panacea," he said. "But we are helping to address the issues that are a result of the CPP. This is one solution."
High-voltage DC lines remain a rarity in the United States, although they are a growing part of power grid expansion abroad. The technology's unique qualities make it a particularly good strategic solution in expanding low-carbon power sources, as the CPP would require, said Massoud Amin, director of the University of Minnesota's Technical Leadership Institute, who has chaired smart grid panels for the Institute of Electrical and Electronics Engineers (IEEE).
"It can have a major role," Amin said in an interview.
The alternating-current (AC) technology that predominates on the interstate power grid made perfect sense for the grid's first century, Amin said. "But it is very difficult to command the electrons" to take a particular route, he said, and it is hard, as well, to maintain the precise conditions required to move power over the lines. "You have to keep your hands on the pulse of the system" second by second, he said.
HVDC is more like a switched network or a telephone line, he said, able to ramp delivery of power up and down between specific points on the grid. That makes DC lines suitable for delivering renewable power over long distances, for example. "It can be done. It's pretty straightforward," he said.
HVDC "functions like an extension cord," said Edward Krapels, founder and CEO of Anbaric Transmission, an independent transmission and microgrid developer. Its Neptune Cable and Hudson HVDC projects supply electricity from the Mid-Atlantic region to New York City.
Anbaric and National Grid are partnering to propose one of three HVDC proposals that are expected to compete for an anticipated power supply contract from the New England States Committee on Electricity to supply energy from northern Maine to Massachusetts.
The Anbaric/National Grid proposed Maine Green Line would deliver 1,000 MW of renewable energy -- onshore wind from Maine and hydropower from Canada -- to Massachusetts via submarine cable. The project could expand to 2,000 MW.
Now is the time to adapt the grid for clean energy, Krapels said. "To my delight, New England is finally getting around to calling for clean energy transmission," he said.
Anbaric's next portfolio will look for areas where coal plants will be phased out. "In some cases, clean energy can fit the bill, so we're looking at projects that can sort of do double duty -- replacing coal and providing clean energy," Krapels said.
"HVDC can help states meet the holes they're going to have, assuming the Obama plan is going to be carried out," Krapels said. About half of the states are candidates for these projects. "In some states, we're not even going to try. It's really a state to state," he said.
The Canadian option
Importing renewable power from Canada could be an attractive way for states to replace retiring coal plants and bring down total annual carbon dioxide emissions to comply with the Clean Power Plan.
But getting credit for those imports could be complicated. EPA's draft rule weighs a state's carbon intensity by looking at the power it generates within state borders, not at the power its residents consume.
That means the states generating wind and solar power -- rather than the states using it -- get to use it to meet their goals.
States that import power from producing states, or Canada, are waiting with bated breath to see whether EPA will answer their calls to give them credit for purchasing that cleaner power. In any case, EPA has said it won't allow double-counting, or let importing and exporting states take credit for the same power.
The Canadian Electricity Association, a contingent that represents the country's entire power industry, says EPA should explicitly award credit to states buying renewable power from Canada. CEA notes that state emissions base lines would be much higher if states had produced their own power, likely from higher-emitting fossil fuels, rather than buying it from Canada -- which gets most of its power from hydroelectricity.
The Edison Electric Institute and the American Public Power Association, as well as environmental protection groups, including the Sierra Club, Earthjustice and the Natural Resources Defense Council, have urged EPA to consider imports of new renewable power from Canada as state compliance methods as long as certain conditions are met, according to an analysis of comments by CEA.
Complicating the issue further, a number of states currently count Canadian hydropower in their renewable portfolio standards -- meaning they might have to recalculate the emissions reduction values of those programs to submit them to EPA as compliance methods.
"There are all these pre-existing structures that now have to be fit into the Clean Power Plan framework," said Joe Kruger, a consultant who represented CEA at a panel discussion last month at the conference of the National Association of Regulatory Utility Commissioners.
Kruger, who has worked at the White House Council on Environmental Quality and EPA, said Minnesota and Wisconsin, and states on the border in the Northeast, including Maine and New York, are likely to want to take advantage of Canadian power.
Confronting the status quo
Where power industry critics of EPA's proposed Clean Power Plan warn of potential reliability problems and disruptions to the status quo due to anticipated coal power plant closings, merchant transmission developers like ITC are going to see opportunities, according to ICF International, a consulting firm. Merchants are in business to challenge the status quo.
Kiran Kumaraswamy, ICF senior manager, said the changes that would be triggered by the CPP could create new incentives for entrepreneurial transmission projects. "Providing the flexibility for the broader systems to accommodate different types of generation units could be a significant value driver for projects," he said.
"Forward-thinking entities could potentially propose new projects that will help maintain and enhance reliability in the face of changing generation and power flow patterns," ICF said in a briefing last week.
As a DC project by an independent transmission developer, the Lake Erie line skirts political battles over allocating project costs among ratepayers in several states -- a policy debate that has flared around big interstate AC projects.
"This is a merchant project, versus one all customers will be asked to pay for," Harvill said. "Since it's a DC line, it's functioning very much like a generator."
An HVDC line entering a smaller market than the Pennsylvania-Ohio section of PJM could push in so much new energy, it could jar the market. While the Lake Erie line's 1,000 MW of power would make a dent in an estimated 7,600 MW of existing plant retirements expected in PJM because of the Clean Power Plan, it would amount to a very small part of PJM's current installed generation capacity of around 190,000 MW.
"We don't anticipate even 1,000 megawatts having that dramatic an effect on the market price in PJM to where it would collapse the market," Harvill said.
ITC will have to satisfy environmental, siting and construction requirements of Canadian and U.S. authorities, but finding a path for the line is a tamer challenge that most land transmission line projects face. "Not in my backyard" doesn't have the same impact for a submarine connection as it does over land-based lines. Once approvals are in, the line should take just two years to construct, ITC says, another plus, given the concerns over tight proposed deadlines in the CPP schedule.
The Tres Amigas project in New Mexico is a precedent-breaking plan to link the eastern and western North American power grids with the independent grid operating in most of Texas, through an HVDC network.
Phillip Harris, Tres Amigas' chief executive, says the project has clear applications for meeting the Clean Power Plan, providing a market-based exchange for solar, wind and geothermal energy across the three separate grid borders. Connecting the three systems has posed particularly difficult regulatory challenges, but Tres Amigas hopes to line up a wind farm as an "anchor tenant" soon.
The value of HVDC projects goes further than the Clean Power Plan, Harris added.
"We have an aging, very sophisticated, high maintenance, interconnected AC system," Harris said. "To meet the needs of the future, we have to make that system more robust. Fast-acting HVDC devices can do that.
"We face a status quo conundrum," he said. "Those that have a commercial or political advantage in the status quo will use every tool in their power to not change it. With the new ideas, the new technologies, the burden of proof is on the innovator."
As more distributed energy enters the system, the presence of fast-acting DC systems becomes even more important, Harris said. "We have to have an 'and' solution, not either-or. Bring in the clean generation, bring in the demand response, and a much more sophisticated, fast-acting transmission system so the nation can handle the changes that are coming.
"Unfortunately, we don't have a single way to enable that vision. There is no national overview for the North American grid," Harris said.