That’s a nearly 42% year-over-year increase in congestion costs, a recent Grid Strategies report found. It isn’t a brand-new phenomenon: These expenses have spiked since 2021. Why? Demand outpacing the transmission buildout, extreme weather, and high natural gas prices.
PJM fared the worst: Last year, grid congestion cost the RTO $3.2B. “Part of it is a failure to adopt pretty simple solutions to the problem,” Julia Selker, Grid Strategies’s director of policy and strategy, told us. If PJM were to incorporate topology optimization, for example, it could cut day-ahead congestion costs by up to half, according to a NewGrid analysis.
The planning pickle: Operators are used to planning a decade or more ahead. This leaves out shorter-term solutions, like grid enhancement tech. “We need a process for that to happen on a more immediate scale as well,” Selker said.
One way to cut costs? Build more storage, which could help reduce the need for infrastructure upgrades and lower peak pricing. Scaling storage over the next 5-10 years could yield over $250B in customer savings, a study by the Energy Storage Coalition found. That averages out to over $1K per US ratepayer.