Transmission: Not the Only Path to Green

 

7.20.10   Ralph Izzo, Chairman, President and Chief Executive Officer, PSEG

It is vital to continue investing in a strong transmission grid. Today, however, there is a debate about the role of transmission in moving energy in a new, green direction.

Clearly, transmission will have an important role in linking renewable resources to the grid. But this doesn't mean transmission is the only pathway to green, or necessarily the right one in all circumstances. For example, there are proposals to create a subsidized "electric transmission superhighway" costing tens of billions of dollars to bring wind power from the Midwest plains to the cities of the East Coast.

Midwest wind is a great resource, but not our only resource. It should compete on a level playing field with renewables elsewhere. Suggesting we should get our renewables from remote areas regardless of transmission costs is like saying if only we had access to free refrigerated freight trains, we should get our ice cubes from the North Pole.

Who pays to build the trains or lay the tracks? And wouldn't it be cheaper to make the ice locally?

All business owners know if they establish their factory at a distant location to keep production costs down, they have to weigh that against increased shipping costs. But, if taxpayers pay the "shipping costs" of renewable generation, we skew decisions away from locally based renewables that may have a lower total cost.

Moreover, there is no such thing as a "green" transmission line. Transmission lines carry all electrons, regardless of whether or not the generator is green. A new line gives a market advantage to any power plant fortunate enough to be close to it. A Midwest transmission build-out could have consequences that are hardly green - giving a new lease on life to antiquated coal plants, jeopardizing green economic development and jobs in regions such as the Northeast, and burdening many taxpayers who would not enjoy its ostensible benefits.

With so much of energy needing to be changed, it's important to avoid approaches that could prove excessively costly or even counter-productive. We owe this to our customers.

Renewable energy needs to be encouraged everywhere, and not only in one particular area or region. We will be on the road to doing this when we have a strong national renewable energy standard (RES) and a price on carbon. But we should leave it up to the creativity and entrepreneurial spirit of the American people to do the rest. This will help ensure that we get the most cost-effective solutions - whether from transmission or other resources.

No one knows exactly what will be the most successful clean-energy technologies of the year 2020, let alone 2050. By letting the market determine which are the best technologies and locations for renewable energy projects, our nation will be in a far better position to unleash innovation, drive down costs and build the world's leading green energy sector.

 

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