Heads of world’s largest grids call for increased investment in infrastructure

The leaders of 16 of the world’s largest power grid operators are calling for more grid infrastructure investment across the globe to meet the increasing demands placed on transmission systems by unprecedented change in the electricity industry and the emerging challenges that change presents.

The chief executive officers stated their case in a two-page declaration released Nov. 11, which the group codified at its 2013 annual meeting in New York on Oct. 29 and 30.

“We all face reliability and operational challenges in a rapidly changing industry,” Terry Boston, president of GO15, said in a statement accompanying the declaration. “The specifics of those challenges may differ from nation to nation [and] sharing how each of us approaches these challenges helps all of us manage them more effectively.”

Boston cited issues such as how best to connect and integrate renewable generation that is intermittent and often located far from population centers, the retirement of conventional power plants and the rapid growth of electricity use in emerging economies.

Other challenges are arising from the transition to lower emissions generation and a changing fuel mix, as well as changes in technology, economic factors and consumer behavior, according to the group’s declaration. Those challenges require power grids to upgrade grid infrastructure, and to expand interconnections between power systems.

Power grids also face threats associated with terrorism, resulting in a growing requirement for increased grid resilience and critical infrastructure protection. Investment is also needed to develop the information technology systems and “smart” IT systems required for the monitoring and control of power flows under increasingly complex operational conditions, the group said.

Although it stopped short of naming the amount of money that needs to be spent on the modernization and upgrades the group agreed are needed, the declaration noted, “Such investment can be made possible through regulatory incentives favorable to the efficient development of new transmission.” Under that scenario, “transmission tariffs must cover both grid operational costs and investment financing to ensure the economic viability of power grid operators,” the group said.

The declaration also cited the need to shorten “the lengthy and complex process of obtaining rights-of-way and construction permits,” and that group members would continue to build relationships with policy makers and regulators, inform them of the challenges the industry faces, and provide them with inputs for developing energy policies and regulations that promote reliable and resilient power grids.

Formerly called the Very Large Power Grid Operators, GO15 comprises the PJM Interconnection and Midcontinent ISO in the United States, Brazil’s national grid operator ONS, Tokyo Electric Power Company (TEPCO), the Australian Energy Market Operator (AEMO), China Southern Power Grid, State Grid Corporation of China, National Grid UK, Belgium’s Elia Group, South African power utility Eskom, Korea Power Exchange, Power Grid Corporation of India, Spain’s Red Eléctrica de España, France’s Réseau de transport d’électricité, Russia’s SO-UPS, and Italian grid operator Terna. Together, the grid operators serve more than 3.4 billion people and are responsible for managing more than 1,800 GW of generation capacity.