Grid Strategies' Rob Gramlich Talks Energy Storage and Transmission

This episode is sponsored by EDF Renewables

Rob Gramlich, the founder and president of Grid Strategies, discusses the challenges faced by the US grid in accommodating increasing demand for renewable energy sources, including power demand growth, limited grid capacity, and constraints in the interconnection process. Rob highlights the importance of building transmission infrastructure and leveraging battery storage to ease grid stress during peak summer hours. Rob also shares his perspectives on the Inflation Reduction Act's impact on clean energy, including the significance of storage tax credits and the need for transmission cost allocation policies to develop the grid. Finally, Rob emphasizes the importance of maximizing clean energy sources and leveraging energy storage to provide value in the system.

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Transcript

(Note: This transcript was created using artificial intelligence. It has not been edited verbatim.)

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This episode of the Renewable Energy SmartPod is brought to you by EDF Renewables. EDF Renewables is a market leading independent power producer and service provider with more than 35 years of expertise in developing wind, solar, storage and EV charging systems. EDF Renewables - Energy innovation for the next generation. To learn more, visit EDF-RE.com. That website again is EDF-RE.com. Or just click on the link in today's show notes. 

Sean McMahon  - 00:47
What's up everyone, and welcome to another episode of the Renewable Energy SmartPod. I'm Sean McMahon. And today we're gonna be talking about batteries and the grid. Energy storage and transmission are always hot topics. But with the American Clean Power Association's brand new Recharge conference going on right now in Portland, Oregon. I figured it was a good time to shine a spotlight on those topics. To do just that. Today, I'm welcoming back to the show, Rob Gramlich, the founder and president of Grid Strategies. Rob was on this show back in 2021. And there are a few people who know more about the grid than Rob. So I wanted to bring him back to talk about not only how the grid continues to evolve, but how innovation in the battery sector is making an impact on grid optimization. 

This is one of two episodes we're doing this week about batteries and the grid. In case you missed it, be sure to check out my conversation with Chris Taylor, the CEO of GridStor. GridStor is a developer, an independent power producer that specializes in standalone energy storage. So Chris shared his insights on how batteries are helping utilities and businesses optimize their energy usage, while reaching their clean power goals. And since GridStor was just founded in 2022, Chris also shares some great stories about the things he knew he'd counter when building a startup and a few surprises that have popped up along the way. So give that episode a listen when you can. But for now, let's get things rolling with Rob Gramlich from grid strategies. 

Sean McMahon  - 02:34
Hello, everyone, and thank you for joining me today. I'd like to welcome back to the show Rob Gramlich, the founder and president of Grid Strategies. Rob, how you doing today?

Rob Gramlich  02:44
Good, John, great to be with you.

Sean McMahon  02:46
Yeah, it's wonderful to have you back. It's been a few years. So I figured it's time we reconnect. When it comes to the US grid. There's few people have more expertise than you. So let's start things off right here. What do you think are some of the biggest challenges the US grid is facing right now? Sure, well,

Rob Gramlich  03:00
you're trying to say that, but we're observing like a lot of people are a number of factors. Number one, power demand growth is up significantly. And at the same time, we sort of run out of the spare capacity on the the bulk power transmission system from, you know, in the, through the 80s and 90s, we built up a pretty robust grid, but then it hasn't expanded a lot. And now we're just trying to connect so many things on the supply side and the demand side to this constrained grid that we keep seeing all kinds of indicators of congestion and constraints, like the 2.6 terawatts of generation that stuck in the interconnection queues, as well as just hindrance of the movement of power from one region to the next, which is very helpful for reliability reasons, if you can move the power, but the grid constraints prevent that. So we have all that there have been some policy developments, we should talk about both legislative and at FERC. And, you know, we can get into that, for sure.

Sean McMahon  04:02
I do want to get into the cues and the policy stuff. But with regard to some of these challenges, what is it? What kind of impact is that having on the the build out of more renewables here in the US? Yeah,

Rob Gramlich  04:12
so you know, grid congestion, is definitely slowing down renewables, probably a little bit more for wind and solar, and batteries. But it affects all of them, just because, you know, the underlying root cause of the slow interconnection is limited grid capacity. And you have to do the grid operator has to do this very complicated analysis to figure out what network upgrades might be needed. Well, if we had a robust network, that that wouldn't be so hard, or take so long. So it really is a constraint. You know, the electrical equipment and supply chains is also a constraint. All of these things on the load side data centers and renewable generation need transformers and breakers and all that. And that's sort of related and it's just tough. For the project developers, right, they have to get through this very uncertain and long interconnection process. At the same time, they also have, you know, increasingly difficult local siting issues that are also unpredictable as you as you enter an area where you want to develop. And then and then add to that the procurement challenges also uncertain and long. So you got like, three separate things, and you gotta, you know, you gotta get a trifecta, you gotta, you gotta win in all three of those games to get a project built. So it's a challenging time.

Sean McMahon  05:32
And any of those three things that you think is, is either the biggest problem, or the easiest to solve.

Rob Gramlich  05:38
You know, none are easy, I do think interconnection is solvable. And to some extent, that's going to rely on building out that transmission infrastructure, which also is solvable. And I think we've gotten some good reason policies from FERC. That should help. But of course, it takes takes a while, but even there, you know, a lot of transmission can built in a two, three year timeframe, the ones that get on the news take 18 years, and those definitely exists. And that's a problem, we need to fix that. But there's also some speedier transmission that can get done. Okay,

Sean McMahon  06:10
and then we're talking a little about batteries right now, will kind of roll is the development of better technologies and battery is that kind of easing the pressure on some of these transmission keys for batteries

Rob Gramlich  06:20
are definitely coming on and making great contributions, you know, and their general reputation for helping out at a lot of points on the grid is definitely bearing out, they unfortunately, have to go through the interconnection queue like everybody else, right. So a lot of the, you know, the grid scale, the multi megawatt scale, connected to the transmission system have to connect and go through that process, just like wind and solar and gas and anything else. So you know, those are taking little little while. But there's also, I think, a lot of good opportunities in the transmission and the distribution system, those might be utility owned, where they can solve some near term problems, I do think you could connect a lot of renewable generation if you better integrate storage. And that storage is probably like storage as a transmission asset, really devoted to that purpose. But, you know, that gets needs to get into integrated with the utility or the RTO transmission plans. And you know, that's, that's, that's a that's a whole effort. But we're working on that here at grid strategies and some integrated resource planning processes.

Sean McMahon  07:27
So then getting back to the policymakers, right, you mentioned FERC earlier, and I know some of the, you know, some even states and regional levels are going in. So what are some of the highlights that have either been proposed or even been, you know, implemented in the past year or two?

Rob Gramlich  07:41
Well, the main one, I think, is Federal Energy Regulatory Commission FERC, recent order 1920. That's on regional transmission planning and cost allocation. And the reason I think that's so important is that it requires long term transmission planning for multiple purposes that sort of recognize the reality of the evolving resource mix. And so you look at retirements and you look at at a generation in terms of quantities and location, and then you put together a transmission plan. And that proactive approach to do that, I think will allow much speedier integration of new resources, including renewables. And, you know, they're supposed to consider, you know, different technologies, storage and grid, enhancing technologies, advanced conductors, etc, in that process, so that's really great. Of course, a rule on a in the Federal Register doesn't by itself lead to projects, you have to implement that in the regions and forecast to go through the compliance and rehearing and all these other steps. But, but that's all, you know, in progress. And I think FERC did the right thing to issue a meaningful rule, they could have easily compromised and gotten a little bit more consensus but done something that was completely useless. But you know, one consequence of that is we have to work hard with a lot of state officials to try to persuade them why this is the you know, the right thing to do for their state, everything these days gets put in a partisan fray, we need to undo that. So that's, you know, some of the work going on. Anyway, so all of that you asked about, you know, where major initiatives that's the order 1920 A number of oil a few a few regions anyway, are doing quite a bit on transmission, miso did their long range transmission plan, tranche one, the first sort of round of that miso and SPP seem to be moving forward on what's called JT IQ, which is a, you know, it's like 50 Plus gigawatts of new renewables that can be connected, that kind of impact the miso PJM border. So that's some good joint RTO work and California so has some notable improvements with their regional transmission plans. They're doing kind of 20 year out planning and looking outside the state to get in some Idaho wind and New Mexico wind and solar to complement and then some offshore wind. So all of those, you know, the getting the diverse resource mix really helps to be able to integrate More and to contribute to resource adequacy, you know, to get a get a good, diverse, reliable overall supply. So those are some, those are some notable highlights. There's some, there's a few utilities out there that are doing some good things on grid enhancing technologies, national grids got a couple and telco in Vermont and ppl and Pennsylvania, it's kind of seemed somewhat random, which utilities decided to do that. But that's a longer story. I

Sean McMahon  10:27
gotcha. And then also recently, the Biden White House, in collaboration with I think it was 21 States announced a program to boost the adoption of grid enhancing technologies. What was your reaction to that?

Rob Gramlich  10:38
Yeah, that's very exciting, great to have White House support for advanced transmission technologies, not not a normal thing, not anything, actually, we've really seen before, that is really great, I had the opportunity to attend and speak at one of the two recent White House meetings on that where they gathered utilities and lots of others, they have 21 states kind of signed up to work on it, that could be helpful, of course, most transmission is really in federal jurisdiction. So states have certain things they can do. But that's, that'll be the next step is sort of like figure out how they can help and participate. And, and, you know, do the work. And of course, it's the the utilities are the ones who own the lines. And this has to work for the utilities, they they and only they get to say what technology gets put on their line. But there are a lot of utilities that are, you know, interested and doing some things on these technologies, and they have some lessons to share with other utilities. And that's, I think, part of this effort is to spread those practices. Yeah, anytime

Sean McMahon  11:43
that people are sharing knowledge, informations, generally a good thing and bringing it back to FERC. Is there anything they can do to boost grid enhancing technologies?

Rob Gramlich  11:52
Sure. So they did include, you know, some roll for grid enhancing technologies and high performance conductors in order 1920 for planning, but that's not really the best sort of way for them to get deployed, you know, a 20 plus year plan that's done every five years when these some of these gets can just be done in you know, two months. And the benefits can exceed the costs and, you know, six months payback or something less so the so that I think there is more than for can and should do one thing is line ratings, you know, generally a regulator has both carrots and sticks, they could do something that's a little bit more like a requirement on dynamic line ratings. And so I hear FERC, might do something, actually, this month in June of 2024, to get going more on that. So that would be really exciting. And then, you know, in more the carrot area, there's this little known section of the Federal Power Act, Section 219, v3, you can look it up, which is like, basically, Congress saying in 2005, FERC, you should put incentives in place for this exact need this operational technology, focus still never specifically implemented that. And I think there are some incentives, we we develop the Shared Savings proposal, so I think four could could finally do that. So little bit of carrots, a little bit of sticks, but there is a lot that I think the regulator of transmission could do in that area.

Sean McMahon  13:20
I love it, when you go deep, deep into the policy, they're citing, you know, section, this and that. That's incredible. You know, getting back to advancements in battery and energy storage. I've seen headlines recently where states like California, Texas, they've made investments in energy storage, and early returns are the perhaps it's paid off, you know, avoiding blackouts, things like that. So what's your reaction to that? And then where do you see that going to see other states kind of following suit? You know, what do you see from your perspective? Yeah,

Rob Gramlich  13:48
absolutely. Well, one of the use cases, among many for storage is sort of peak load, like, especially peak summer, you know, hot afternoon and evening power. So PV through the daylight hours and charging the batteries during, you know, while the sun's up and then discharging the batteries in the evening, when you're when it's still hot, you're still using the air conditioning, but you don't have the solar power. So you're essentially extending the solar power. And that's a important use case all through Texas, southwest California. And they are getting very extreme heat waves, right. And Texas, I think deployed three gigawatts of battery storage in the last year. And that's going to help them a lot along with six gigawatts of solar PV and about 10 gigawatts total. So they've had about that's about a 10% increase in their total capacity in the state. And that's, you know, that's almost aligned with the amount of load growth they have because they have low growth from all the sources people are talking about. It's all happening in Texas, but I really think through this hot summer, we're gonna see solar and storage really come through again, just like it has the last few years in California. All right. A few years ago, California was kind of short on capacity. I think they just they got behind on resource adequacy. And they've been catching up mainly through batteries and NPV. And the combination has really been helping them get through these summer heat waves in California kind of goes all the way through like September because they, you know, when they run out of hydro coming from the northwest, they they have, they still have some dicey situations in September, but solar and storage have really been helping a lot. So again, that's just one use case. There's a bunch of use cases for batteries. But that's that's obviously a very important one.

Sean McMahon  15:35
We'll be right back. 

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Sean McMahon
Okay, and then I touched on earlier about, you know, will advancements and battery kind of ease the strain on the grid or ease the pressure to get all this transmission built out? Because, you know, I hear about how much transmission we need to add and what needs to be upgraded. And it just seems like almost an, you know, unbelievable task that needs to be performed. And so I'm wondering if you know, even at the residential level that, you know, stepping away from your utility scale for a second, but at the residential level, is there a way where batteries will be able to kind of relieve the pressure on the grid itself to a, I guess we'll say, measurable amount, right? I know, in the big picture of things, you know, me having battery in my house doesn't matter. But do you think that the sum total will will have an impact? Or is it still going to be utility scale stuff through and through,

Rob Gramlich  16:48
I look at all those sources as complimentary, ultimately, like, you know, let's think about an 80%, renewable and storage portfolio, you're gonna have some geothermal, some hydro, some large scale solar, some onsite local, solar, some remote wind, and some probably some very remote wind and some offshore wind, and all of those things are producing at different times. Right. And that's why we need to move the power around, because to get to that level of penetration, you need all those things. And, you know, if you just did one of them, then their value to the system would decline, right? Everybody, every resource that conventional and renewable has declining marginal value once you get high penetration. So that's why you need all those things. And they're all part of the portfolio. So they don't really, in the long run, they don't, they're not really alternatives. In the short run, we are seeing in some integrated resource planning analyses where you do a really deep dive with a given utility, where, you know, transmission could enable a lot of renewables. But there's sort of a debate, like where the utility might say, well, that's going to take too long, therefore, I need to rate base, this new gas plant. And if you look at that, we're seeing you could deploy batteries to get through like to sort of resolve the contingency that you might otherwise be worried about, that enables that, you know, the renewables to serve the need that's been identified in the process. So I think there are some short term opportunities where the transmission just ain't gonna happen in X years, but the storage could and it could, you know, get you through at least through that period, and then you know, then you have the battery on the system, and you can do a lot of things with it longer term, once you get it, get it connected.

Sean McMahon  18:41
Okay, I'm glad to hear perspective on that. Because I've always been kind of curious, just, you know, it seems like transmission, like I said, it's just almost impossible to get done for political technology, all kinds of reasons. Well,

Rob Gramlich  18:54
like, can I just respond to that? Because, yeah, it's easy to get that perception. But you know, it was only 10 years ago, we built a ton of transmission and connected, you know, half of the current wind industry, like, literally half of the current wind industry wouldn't exist, had we not done that. And we did it, you know, we we had, you know, my first project I worked on at the American Wind Energy Association in 2005. We went down and worked with folks in Texas on the competitive renewable energy zone transmission plan, and, you know, they've had, you know, a couple dozen gigawatts connected directly for that and then we went to miso. The multivalue projects did the same thing. There. I mean, this is the RTOS themselves, do the planning and the utilities are involved and you know, we were just one one part of it SPP did a lot California did. And now you know, New York is connecting. So I'm from upstate, so, you know, you can build transmission. You just you know, that's where the first quarter 1920 helps. You really got to do it proactively and long term because it takes a while and you can permit it It's never easy. It's harder for transmission than just about anything else. But it doesn't mean you can't, you can't do it.

Sean McMahon  20:05
So what do you think stands in the way right now? I mean, I don't mean to come at you with like a skeptical perspective. But yeah, I mean, lots lots changed in the last 10 years.

Rob Gramlich  20:13
Again, we had, we had a pretty simple formula 10 years ago, and we just stopped planning, pretty much every region, maybe with the exception of California stopped doing that long term planning for 10 years, we took our eye off the ball, arguably, without low growth, and with low gas prices. And when you could do a bunch of solar without wind, then over the last 10 years, you could keep growing renewables without much transmission. And you could keep, you know, meeting load. You know, now we're at a point where the solar needs transmission, also. And, you know, we ran out of headroom, and, you know, we needed a diverse supply, we need to connect new areas. And so that's it's just, you know, it's proactive planning for multiple purposes, in a holistic sort of multipurpose framework, doing it scenario basis, the sort of simple transmission methods that now FERC said, Well, that's not rocket science. Let's just make sure everybody does that. So that's sort of 1920. Right there.

Sean McMahon  21:19
And speaking of policy, I want to shift to a topic that's always very popular on the show. And that's the inflation Reduction Act speaking specifically to say batteries and grid optimization, you know, what's the biggest impact the IRA has had in those areas?

Rob Gramlich  21:34
Well, absolutely. I mean, the storage tax credit that so many people worked on for so many years, obviously got in there, it was a key part of it. So that's great to have a standalone storage tax credit. And of course, the long term extension of the tax credits for wind, solar and storage is really huge. So it's a big discount for any utility or energy buyer who wants clean energy or wants any kind of energy. Now, the renewables are very cheap. So that, that helps a great deal, and it helps the business a lot. And it helps grid planners a lot to grid planners used to tell us in the wind industry, that well, how can I plan for you if your PTC is gonna go away next year? And we didn't have I didn't have a great answer for that. Now we do, you know, these credits are there for the for the long term, you know, at least we till we reach, you know, carbon goals that are pretty aggressive. So that's going to help a lot. I think the industry has a lot more certainty, a lot of utilities are very much on board with this. And utilities and various businesses are already telling Congress, both sides of the aisle, hey, you got to keep this in place. Whatever happens in November? You know, I think that I think that's, you know, basically going to happen, I think it's largely going to stay in place, there might be some items here or there that get clipped, but generally, it's very strong, and it's really going to help help drive clean energy.

Sean McMahon  22:58
Are there any aspects of the IRA that are perhaps underperforming that surprised you,

Rob Gramlich  23:03
I will say on transmission, it didn't do a lot. And on an eye, if you take IgA, the bipartisan infrastructure law and Ira together, they really didn't do much for transmission. And yet, it's my own view that if you had done only transmission, and nothing else, you would get a massive amount of you would get more carbon reduction than if you had done what it did. In other words, it's the grid, that's the major constraint. And the laws didn't didn't really address the grid. Now, there's a lot of reasons for that. It's not like the administration wasn't trying or different groups, advocacy groups weren't trying, just kind of didn't get over the finish line. And so you know, we have to look to others always another day, right. So who knows, maybe there will be some type of tax legislation next year and 2025, I'm pretty sure under under at least a few political scenarios, so we can hopefully go back and get that tax credit for transmission that got dropped out. And

Sean McMahon  24:01
that segues to my next question for you. And I think you might have already answered it, but I'm gonna give you a chance here. If you could take a magic wand and just change one thing about the US grid right now. What would it be?

Rob Gramlich  24:14
Yeah, well, that would be that would be a great Christmas present. If we could just make transmission, you know, cheaper to the ratepayers, the problem in the electric industry. I always describe the transmission problems as three P's planning, permitting, paying, and the paying part is like, Okay, if there's 5040 or 50 significant utilities in the western US and, you know, over 100 in the eastern like, which one is supposed to pay how much for a given line that might cross it doesn't have them. There's so many beneficiaries across such a wide area. How are you supposed to allocate those costs? There's not you know, there's there's not a clear correct answer. The you know, the policies are beneficiary pays, but it's just so hard to do. It's a public good ever Nobody benefits. So it's so hard to get people to voluntarily pay. So, you know, for cost allocation policies are important. But if we could just take, you know, 30% of the problem off the table with a 30%, investment tax credit for transmission, it would just go a lot easier, that would be a lot better. So that would be a really, really good one that would help. Congress is working on permitting reform, you know, that's, that's, that's also important. We might see a bill any day now a draft bill from the Senate Energy Committee, and they've been talking a lot about inter regional transmission, which is really important. And, by the way, it was not included in the FERC order 1920, which was intra regional. So you know, some type of permitting reform that speeds up all these processes, and addresses inter regional transmission in some way, that'd be, that'd be really helpful, of course, that you know, that that that fits, you know, the tax credit would help with that type of transmission, as well. So these are all related. But, you know, I really think, you know, for the long term, maximizing clean energy, that would be the the main thing, you know, in keeping, of course, the tax credits in place from the IRA, for solar storage, wind and others, I'm

Sean McMahon  26:14
going to bring you back to energy storage, and just ask you, do you have any bold predictions for the role energy storage will play in the renewables landscape in, say, five years,

Rob Gramlich  26:25
I think it'll be very large and multi multipurpose, you know, the main use, that we talked about a little before is kind of the, you know, the time shifting on the hot summer afternoons, and that's a major resource adequacy benefit, and there's a lot of value a lot of economic value that is there, and that, you know, the the batteries will get paid for, depending on the market structure. So that's really important. I do think, you know, there's a lot of more localized uses on the distribution system, you know, some more, you know, bolstering the resilience at the local level, integrating Evie batteries, by the way, the batteries that are sitting in my driveway, right now, I'd love to have ways to bring them to bear getting into the kind of the virtual power plant area of of work. And, you know, and then just, you know, energy and ancillary services, markets, various RTO products, I think batteries will find some, some benefit there. A lot of the large buyers are looking for power, you know, not just sort of national Rex, but like trying to match their the actual timing of their output. So, you know, storage, various types of storage will be certainly very valuable there. And, you know, if you talk to any system planner, they will, they will say, Look, we need longer duration storage. So I think the industry has, you know, heard that message from system planners, and they're working on longer storage, of course, if we make just the normal lithium ion batteries super cheap, even, you know, if we keep making them more cheap, he just, you know, stacked three, four hour batteries, you get 12 hours. So, they will, you know, there will be value in the system, I'm quite confident that the, during the hours when the wind and solar are not producing, there will be higher wholesale market prices. And so anybody any type of storage that can be there, you know, charge up when the, you know, when the sun is shining, and then discharge at those other times there will be value in the market. I'm pretty confident.

Sean McMahon  28:25
Well, you just made the perfect market case for more energy storage, I guess. So. I think we'll wrap things up there. So, Rob, I really appreciate your time.

Rob Gramlich  28:33
Great. Sean, great to be with you.

Sean McMahon  28:37
Well, that's our show for today. But before we get out of here, I want to say one final thank you to the exclusive sponsor of today's episode. EDF Renewables. 

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