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					</table><p>Congestion costs in regional transmission organization (RTO) regions, excluding the California Independent System Operator (CAISO) region, amounted to $12.1 billion in 2022. Extrapolating these figures to include CAISO and the rest of the United States brings the total congestion costs to $20.8 billion, according to a report by power sector consulting firm <a href="https://gridstrategiesllc.com/" target="_blank" rel="noopener">Grid Strategies</a>.</p>
<p>The exponential growth in congestion costs is due to the frequent reliance on higher-cost thermal generators, as renewable energy sources are often curtailed due to insufficient transmission capacity. This trend is further exacerbated by increased system vulnerability to extreme weather, rising electricity demand, and the preference for clean energy sources often geographically distant from consumers.</p>
<p>Annual internal market congestion costs in the U.S. power sector have experienced significant growth in recent years, posing consumer challenges and highlighting the urgent need for transmission infrastructure upgrades.</p>
<p>Congestion costs, which occur when inadequate transmission capacity hinders the delivery of low-cost electricity generation, have nearly doubled from 2020 to 2021 and increased by approximately 56% from 2021 to 2022 across the RTOs and Independent System Operators (ISO). These entities serve around 58% of the country&#8217;s electricity load, making congestion costs a pressing issue affecting consumers.</p>
<p>While congestion data in non-RTO regions are not readily available, it can be assumed that congestion outside these transparent markets mirrors that within them. The price transparency and favorable transmission expansion policies in RTO regions tend to reduce congestion compared to non-RTO areas.</p>
<p><strong>Insufficient investments</strong></p>
<p>Increasing transmission capacity remains the most effective strategy to alleviate congestion. However, the investment in new large-scale, high-voltage transmission lines has been insufficient. This is despite the escalating need arising from heightened vulnerability to extreme weather events, growing electricity demand, and increased reliance on variable and clean energy sources far from consumers.</p>
<p>Additionally, the adoption of grid-enhancing technologies (GETs), such as dynamic line ratings, advanced power flow control, and topology optimization, which optimize existing grid infrastructure, has been limited among U.S. utilities.</p>
<p>Certain regions, such as New England, may experience minimal internal congestion but face significant congestion at interregional interfaces, such as the New York-New England connection. Inadequate regional and interregional transmission capacity is the root cause of congestion. It occurs when lower-cost generation cannot reach customers, forcing the dispatch of higher-cost alternatives and raising prices. The construction of new high-voltage transmission lines has considerably decreased since 2010, exacerbating congestion-related issues.</p>
<p>Volatility in fuel prices, particularly natural gas, and coal, contributes to high congestion, as cited by various RTO market monitor reports. Wholesale natural gas prices in the U.S. reached their highest level since 2008, increasing by over 53% from 2021. Transmission outages resulting from scheduled maintenance and upgrades, along with extreme weather events like Winter Storm Elliott in December 2022, have also substantially exacerbated congestion costs.</p>
<p><a href="https://www.lbl.gov/" target="_blank" rel="noopener">Lawrence Berkeley National Laboratory</a> found that regional and interregional transmission links are crucial in reducing congestion, with interregional links providing even greater benefits. Berkely Lab estimates that only 5% of hours contribute to 50% of transmission value, emphasizing the significant impact of extreme weather events on transmission systems. As extreme weather events have increased by 67% since 2000, the importance of interregional transfer capability and transmission infrastructure resilience continues to grow.</p>
<p>According to the Berkeley Lab, solar, storage, and wind projects <a href="https://www.mercomindia.com/renewables-awaiting-grid-connection-us" target="_blank" rel="noopener">accounted</a> for 95% of over 2 TW of all proposed generation capacity awaiting connection to the grid in the U.S. at the end of 2022.</p>
<p><a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1.png"><img decoding="async" loading="lazy" class="aligncenter wp-image-56497 " src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1.png" alt="Marginal value" width="786" height="518" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1.png 900w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-300x198.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-768x506.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-650x428.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-624x411.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-600x395.png 600w" sizes="(max-width: 786px) 100vw, 786px" /></a></p>
<p>While RTOs/ISOs mitigate congestion through security-constrained economic commitment and dispatch, transmission expansion planning does not consistently prioritize regional transmission congestion cost reduction. Furthermore, interregional congestion cost reduction opportunities are not adequately considered in RTO/ISO transmission planning. State and federal regulators have an opportunity to assign responsibility for congestion management.</p>
<p>Addressing congestion requires long-term investment in large-scale, high-voltage transmission lines, which can take over a decade to develop. However, given the issue&#8217;s urgency, short-term solutions such as GETs can increase transmission capacity on existing infrastructure, alleviating up to 40% or more of congestion. Medium-term strategies, such as reconductoring with advanced conductors, involve replacing traditional steel and wire cores with carbon and composite cores on existing towers and rights of way, enabling increased line capacity.</p>
<p>Last June, the U.S. government <a href="https://www.mercomindia.com/us-doe-launches-i2x-initiative" target="_blank" rel="noopener">launched</a> the Interconnection Innovation e-Xchange initiative to connect more green energy to the country&#8217;s grid. The initiative is aimed at cutting the waiting period for clean energy sources in interconnection queues while lowering the grid connection rates.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/arjun-joshi/" class="vcard author" rel="author"><span class="fn">Arjun Joshi</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Arjun-Joshi-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Arjun Joshi,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/arjun-joshi/" target="_blank" rel="noopener">More articles from Arjun Joshi.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Arjun-Joshi-1.png" width="86" height="102" /><a href="https://mercomindia.com/author/arjun-joshi/" target="_blank" rel="noopener"><strong style="color: #00b451">Arjun Joshi</strong> </a>is a staff reporter at Mercom India. Before joining Mercom, he worked as a technical writer for enterprise resource software companies based in India and abroad. He holds a bachelor’s degree in Journalism, Psychology, and Optional English from Garden City University, Bangalore. <a href="https://mercomindia.com/author/arjun-joshi" target="_blank" rel="noopener">More articles from Arjun Joshi.</a></p>
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US Power Sector’s Total Congestion Costs Reaches $20.8 Billion in 2022

<p>Rooftop installations in India are well behind utility-scale installations. Only <a href="https://mercomindia.com/product/india-solar-project-tracker/" target="_blank" rel="noopener noreferrer">2 GW of rooftop solar</a> has been installed as of Q1 2018 out of the 40 GW by 2022 target set by the government. To meet the target and the deadline, approximately 9 GW must be installed every year.</p>
<p>Most rooftop installations mostly are happening in the government, commercial, and industrial sectors. The residential rooftop market is almost negligible. This fledgling sector has not yet enjoyed any ground-breaking support or progress in spite of some policy backing from the government of late. There is a lack of <a href="https://mercomindia.com/indias-rooftop-solar-financing-solutions/" target="_blank" rel="noopener noreferrer">viable financing options</a> for residential customers as well.</p>
<p>India’s rooftop solar to utility scale PV ratio is one of the lowest in the world. Approximately 90 percent of solar installations in Australia are in the rooftop sector, whereas China has 40 percent and Germany 30 percent.</p>
<p>In the light of these observations, Mercom’s news team got in touch with Kushagra Nandan, President of <a href="http://sunsource-energy.com/" target="_blank" rel="noopener noreferrer">SunSource Energy</a>, to discuss the various issues facing the rooftop sector.</p>
<p>Here are the edited excerpts from the interview:</p>
<p><strong>What </strong><strong>are the things that need to change for rooftop solar to become more attractive?</strong></p>
<p>India has a massive need for energy. The country added more rooftop solar power capacity in the last financial year than in the previous four years combined.  Here are some things that should be done to make rooftop solar more attractive:</p>
<ol>
<li style="list-style-type: none;">
<ol>
<li>Utilities need to understand that their primary role must switch from buyer and seller of electricity to enablers of prosumers</li>
<li>Independent System Operators must be carved out, based on current SLDC setups, with better interconnectivity between states</li>
<li>ERCs must start operating independently of utilities and should have a majority/strong representation from customers.</li>
<li>Customer representation must be given a regulatory basis.</li>
</ol>
</li>
</ol>
<p><strong> </strong><strong>What segments of rooftop are lucrative and why?</strong></p>
<p>Large customers have made rooftop solar the fastest growing segment in renewable energy in India. This has happened largely because rooftop solar power is now cheaper than commercial and industrial power in all major Indian states.</p>
<p>Today, most of the growth in the rooftop segment is driven by commercial and industrial users. The economics works for them even without net metering, given the fall in costs of installation and reduction in energy prices. On the other hand, the residential segment hasn’t taken off. The high upfront capital expenditure compared to commercial and industrial (C&amp;I) consumers, a lack of financing options, and cheaper grid electricity for residential consumers with low consumption currently make rooftop PV less attractive for residential consumers than their C&amp;I counterparts. Net metering is important for residential consumers as their panels create a lot of surplus power during the day when the households themselves draw less power.</p>
<p>For the next phase of solar market expansion, residential will be a major driver.</p>
<p><strong> </strong><strong>What states are best for rooftop installations right now?</strong></p>
<p>States that have various industries and large rooftops have a huge potential. Even residential is gradually picking up, particularly in states like Delhi, Haryana, Tamil Nadu among others partially driven by government mandates for promoting solar.</p>
<p><strong>What are some technical challenges you are facing? Ex: flat roof, small roof areas, etc.</strong></p>
<p>In India, the majority of the roofs are small to medium and there is an absence of structural drawings of existing roofs. The major challenge that we face is the structural analysis without existing drawings to ensure that the solar system will not have any adverse impact on a roof’s strength. Since generally no accurate data is available, a lot of time and effort goes into the analysis. Similarly, for the electrical analysis, a lot of due diligence is required to be done.  Also, a lot of time is spent explaining to the authorities including DISCOMs, which makes the procedure time-consuming.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/nitin/" class="vcard author" rel="author"><span class="fn">Nitin Kabeer</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><p><img class="alignleft wp-image-9822" src="https://mercomindia.com/wp-content/uploads/2018/04/nitin-2.png" alt="" width="99" height="105" /><span style="font-family: Calibri"><span style="color: #000000"><span>Nitin is a staff reporter at Mercomindia.com and writes on renewable energy and related sectors. Prior to Mercom, Nitin has worked for CNN IBN, India News, Agricultural Spectrum and Bureaucracy Today. He received his bachelor’s degree in Journalism &amp; Communication from Manipal Institute of Communication at Manipal University and Master’s degree in International Relations from Jindal School of International Affairs. <a href="https://mercomindia.com/author/nitin/">More articles from Nitin Kabeer</a></span></span></span></p>
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Interview:  Utilities Need to Enable Prosumers for Rooftop Solar to Flourish

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