Understanding the Economic Effects of Electricity Infrastructure Delays

Key Insights from RFF's Report

Resources for the Future (RFF) recently published a report outlining the implications of delays in energy infrastructure buildout: Power Delayed: Economic Effects of Electricity Transmission and Generation Development Delays. RFF simulates the grid for 2032 and concludes that the U.S. needs more transmission and generation to meet electricity demands. The line of papers making this point (including FERC Order 1920) is almost as extensive as the generation interconnection queue itself.

Major Findings

The report highlights several key points:

• The costs of delays are significant, totaling approximately $50 billion. However, incumbent generation performs well in the short term through life extensions and scarcity pricing.

• Delays in energy infrastructure build-out stem from familiar issues: the interconnection queue, permitting challenges, supply chain bottlenecks, high interest rates, labor shortages, and a lack of regional coordination.

• The simulation excludes the 2023 EPA Good Neighbor Plan and 2024 EPA rules limiting CO₂ emissions for the model year 2032, acknowledging the new administration's influence.

• It simulates transmission delays (6% - $5 billion capital) and generation delays (4% of total 2032 capacity - 80 GW) from 2028 to 2032.

• Transmission delays hinder new generation across the board for wind, solar, and natural gas capacity expansion.

  
  

The Importance of Streamlining Energy Procurement

RFP Power is actively working with the industry to streamline and optimize the power procurement process. This is a crucial opportunity for improvements that will be necessary in the coming years. By enhancing the procurement process, we can better address the increasing demand for electricity and ensure reliable resource acquisition.

The Role of Load Serving Entities

Load Serving Entities (LSEs) play a vital role in this landscape. They are responsible for ensuring that electricity is available to meet consumer demand. As we face growing challenges in energy infrastructure, LSEs must adapt and innovate. They can leverage data-driven insights to make informed decisions about energy procurement.

Addressing Infrastructure Challenges

The challenges outlined in the RFF report require a concerted effort from all stakeholders. Addressing the interconnection queue and streamlining permitting processes are essential steps. Additionally, improving regional coordination can help mitigate delays caused by supply chain issues and labor shortages.

Future Outlook

Looking ahead, we must prioritize investments in both transmission and generation infrastructure. This will not only help meet the rising electricity demands but also support the transition to cleaner energy sources. By focusing on these areas, we can create a more resilient energy system.

In conclusion, the findings from RFF's report underscore the urgency of addressing energy infrastructure delays. As we navigate this complex landscape, we must work together to develop solutions that ensure a reliable and efficient energy future.

By embracing a streamlined, transparent, and data-driven process, we can position ourselves to meet the challenges ahead. Let's commit to making the necessary improvements in energy procurement and infrastructure development. Together, we can create a sustainable energy future.