Toward a physical Dodge City high voltage direct current (HVDC) electricity hub

Abstract

A physical Dodge City high voltage direct current (HVDC) electricity commodity hub would foster the kind of risk transfer that would invite the full participation of the financial industry in an interstate transmission system essential to the speedy development of renewable electricity and complementary storage technologies. Obstacles lie in the way of such a vision, however. Chief among them, paradoxically, is the administrative system that has evolved since the late 1990 s to promote regional electricity markets. That system abstracts from investment risk and the nation’s uneven geography of renewable resources. It lodges a kind of monopoly planning and scheduling power in a small group of bureaucratic centralized system operators that mimics a command economy in their own distinct regions, not the kind of market economy that has traditionally driven investment in US interstate energy infrastructure. And yet, in dealing with the vexing transmission constraints faced by the renewable generating sector (the “queue”), the Federal Energy Regulatory Commission (FERC) continues to pursue ever greater authority for those regional transmission organizations (RTOs). Such FERC action regarding its RTOs in 2022–23 represents a highly evident case of path dependency—a problem—that state or federal policy makers wishing to speed the entry of large-scale renewable generation, and complementary storage technologies, will have find a way either to confront directly or to work around.