Congestion Costs Double From 2020 To 2021

WEB Congestion Costs Rise Sharply in 2021

Congestion Costs Double from 2020 to 2021

WEB Congestion costs, which are incurred when available least-cost energy cannot be delivered to some loads because transmission facilities do not have sufficient capacity, rose sharply in 2021. According to a recent report by the U.S. Department of Energy, congestion costs doubled from 2020 to 2021, reaching their highest level in a decade.

Factors Contributing to Rising Congestion Costs

Several factors contributed to the increase in congestion costs in 2021, including:

• Increased demand for electricity
• Aging and inadequate transmission infrastructure
• Increased use of renewable energy sources, which can be intermittent and unpredictable
• Extreme weather events, which can damage transmission lines and disrupt power flows

The increase in congestion costs is a major concern for policymakers and grid operators, as it can lead to higher electricity prices and reduced reliability. In addition, congestion costs can discourage investment in new renewable energy projects, which can help to reduce emissions and mitigate climate change.

Efforts to Reduce Congestion Costs

Several initiatives are underway to reduce congestion costs, including:

• Investing in new and upgraded transmission infrastructure
• Developing and implementing new market mechanisms to manage congestion
• Encouraging the use of distributed energy resources, such as rooftop solar and energy storage
• Promoting demand response programs, which allow consumers to reduce their electricity usage during peak periods

By taking these steps, policymakers and grid operators can help to reduce congestion costs, improve the reliability of the electric grid, and promote the transition to a clean energy future.