In a new analysis, researchers at the National Renewable Energy Laboratory argue that the creation of Interregional Renewable Energy Zones could represent “some of the low-hanging fruit on the path to decarbonizing the nation’s electricity sector.”
The NREL researchers said the white paper, Interregional Renewable Energy Zones, “provides reason to believe that well-planned IREZ transmission pathways can yield benefits that are greater than their costs.” Generation cost savings alone, they said, “would likely be enough” to offset the cost of interregional transmission in most cases, and “evidence also points to additional resource adequacy benefits from many corridors.”
The paper conceives of an IREZ as an area comprising a high concentration of low-cost developable renewable energy. The transmission path in an IREZ would cover a long distance and would include a hub that would serve as a collection point on the bulk power system to which renewable energy plants built in the IREZ can easily connect in order to serve major load centers.
In its analysis, NREL assumed that states would lead the decision whether to develop an IREZ corridor, and transmission planning entities would respond to state guidance.
NREL also assumed that development of each IREZ corridor would be independent of other IREZ corridors, but states affected by the same IREZ corridor could collaborate on selecting the most cost-effective transmission option and on setting principles for cost allocation and landowner compensation.
NREL’s first step in identifying an IREZ corridor was to identify the best clusters of wind and solar potential in each transmission planning region. The criteria was a least cost of energy of less than $20 per megawatt hour for undeveloped wind resources and an LCOE of less than $24/MWh for undeveloped solar resources. Additionally, a qualifying zone had to contain at least 4 gigawatts of prime resource potential.
In the final stages of its analysis, the researchers, in some cases, combined preliminary zones because two zones represented the same wind or solar regime or the boundary between the regions carried little importance for a long-distance interregional transmission line. The researchers also combined zones in the same state that were close to one another.
In some cases — zones in Montana, North Dakota, South Dakota, and Iowa, for example — the researchers aggregated zones with smaller amounts of wind and solar resources to meet the 4-GW minimum threshold. And all of the zones in the Electric Reliability Council of Texas that passed the screening for prime resources were combined into a single IREZ.
In its final screening, the NREL researchers came up with 19 IREZs, 18 hubs plus ERCOT. Most of the IREZs are primarily wind. Five are solar, and one, New Mexico, has prime wind and solar resources. The Pueblo Southwest IREZ has the largest amount of solar potential with an LCOE less than $24/MWh and a considerable amount that is less than $23/MWh, NREL said.
The NREL researchers noted that the renewable energy zone model began in Texas two decades ago, and lessons from the Texas experience informed development of the IREZ model used in the study.
And while renewable energy zones have proven successful for the cost-effective regional development of clean energy, the NREL researchers acknowledged that there are few examples of interregional transmission for renewables because those projects face “significant hurdles” due to institutional bias toward local and regional projects. In addition, regulated entities that control the transmission planning process are averse to regulatory risk, “leading them to favor solutions for which there is a known precedent for cost recovery,” NREL said.
