How close are we to getting that?
We are moving there pretty quickly in the sense that last year we put in 10,000 megawatts of new wind [turbines] in this country. The only country that did more was China, and they only did a little bit more than we did. I think we are still ahead of China in the total amount of wind we have in this country. We have about 35,000 megawatts of wind in this country. So, the wind development in this country is really driving [the] need to change the grid to a smarter, more intelligent, more efficient grid to allow for deliverability of those resources to the loads—and the more and more of those renewable resources that are put in the system, the faster it is going to be driven.
How tough is it to get new transmission put in though?
Well, it is tough, there is no question. The siting of transmission is a difficult issue. Nobody wants to put a transmission line in their backyard. The cost allocation—who is going to pay for the transmission—is not an easy issue either, and also we have in this country a split between how those two are done. The cost allocation for large transmission lines is done by us, by FERC. The siting is usually done by the states and in some instances, it is even done by the counties, so we have that disconnect that causes issues, which is unlike, for example, the natural gas system in this country. FERC sites the natural gas pipelines. We determine the cost allocations of those natural gas pipelines. We are sort of a one-stop shop. Whereas someone who is going to do a transmission line has to concern themselves with state siting and with cost allocation at the federal level and sort of split between the two, so that makes it more difficult. There are some bills in Congress now to try to alleviate those issues and give the federal government more siting authority—ultimately, sort of backstop authority—if the states can't move forward with the siting. But I think we can address those problems. I think they can be overcome, and I think we can build the transmission in this country that we need to develop the wind and the solar, the geothermal, and hydrokinetic systems—all those renewable systems that are available to us, and we have vast resources in this country.
How critical is this transformation of the grid to getting the amount of renewables we need to be on track to make significant cuts in greenhouse gas emissions, the kind of cuts that we need to forestall or minimize global climate change?
To get as many renewables as possible operating on the grid, these renewables are much different again in characteristic than the current generation mix in that we have primarily base-load plants that are operating over long periods of time that don't vary much, like a coal plant, for example. The wind system is going to vary throughout the day as is a solar system. So, because of the differences and also because of the fact that you have to stabilize the grid and keep it in frequency perfectly all the time, we are going to need ways to do that; and one of the ways to do that is to upgrade the grid and make it smarter. To make it smarter in ways that will allow consumers to ultimately be full participants in the grid, and that is going to be a big key. The big key is going to be allowing consumers to use their loads to actually make the grid more efficient and to also at the same time allow more renewables to be integrated in the grid.
You need something in the grid called "regulation service" which stabilizes the grid. As each little increment of load comes in you have an incremental supply that has got to come in to meet it so it is stabilized. Another way to do that would be if an incremental load came in, you need perhaps to drop a little increment of load from another place. You could do that. If you did that as opposed to put in supply, it would be the same. It would be equivalent to the grid but you could do it with somebody coming in and, say, turning off the defrost cycle on the refrigerator at a given time. If you had the communications and control equipment in that refrigerator the grid could signal and allow it to do it. As long as that refrigerator got defrosted at the end of the day, you, as a consumer, wouldn't care but ultimately the grid could operate more efficiently. You get more wind in the grid by doing that and at the end of the day; the consumer might get paid for allowing his refrigerator to do that. So you could ultimately have all that working together and make that operate in the way that you got to get much more wind into the grid, because you need those kinds of services. And if you didn't do that with the refrigerator you would have do that with the coal plant or combustion turbine running up and down, and doing that makes that unit run much more inefficiently. So if you can do that with the refrigerator or you can do that with a car battery they can actually operate as grid support, and they are doing that on a daily basis.