WIRES gathers the latest transmission data, reports, and news to help keep our members up to date on the latest industry trends.
A new primer from WIRES on Transmission Formula Rates (TFRs). This comprehensive overview prepared by London Economics International explores what TFRs are, describes how FERC applies such rates; and assesses in an objective manner the positive...
As we seek to build the grid of the future, discussions and debate about improving transmission planning has become a central topic, with an emphasis on regional and interregional transmission planning. With this new report from Charles River Associates (CRA), WIRES...
London Economics International LLC (LEI) conducted this in-depth analysis for WIRES to illustrate the economic benefit of transmission investment in terms of GDP and job creation as a means of stimulating the U.S. economy, and as a potential public policy tool to...
Princeton University’s Zero Lab REPEAT Project The report assesses the role of electricity transmission in enabling the full emissions reduction potential of the Inflation Reduction Act (IRA). Previously, REPEAT Project estimated that IRA could cut U.S. greenhouse gas...
Competitive Transmission: Experience To-Date Shows Order No. 1000 Solicitations Fail to Show Benefits
As the power grid continues to transition to one that is increasingly reliant on intermittent resources to meet demand for clean power, the role of transmission in delivering the output from these renewable resources has never been more critical. Over a decade ago,...
An estimated 70 percent of transmission and distribution lines are well into the second half of their 50-year life expectancy, and some lower voltage components are even over 100 years old. The report finds that reconductoring and rebuilding existing transmission...
The Importance of Transmission
The electric transmission grid is a critical component of our country’s infrastructure, reliably delivering power to our homes and businesses. It is foundational to our country’s economic vitality, security, and quality of life.
The North American grid is one of the most complex and successful national infrastructure assets. When viewed as a whole, it is one of the largest and most interconnected machines on Earth.
Clean Grid: Access to Clean Energy Resources
As the U.S. pursues ambitious climate goals the need to connect often remotely located clean generation resources to load centers has become a priority. Study after study, including those by WIRES, have demonstrated that investment in transmission is not keeping pace with the rapid growth in renewable energy generation, and that transmission infrastructure will need to increase exponentially in order to meet America’s decarbonization objectives.
Over the years, WIRES has contributed many important analyses that highlight the imperative for rapidly building much needed transmission.
In the 2020 WIRES report, Informing the Transmission Discussion, ScottMadden evaluated the need for transmission in various regions, and predicted that without the strategic and timely expansion of transmission infrastructure, the ability of many states to meet their clean energy mandates by 2030 would be in jeopardy.
Additional demands on the grid will occur as large sectors of the economy shift to electrification. A WIRES 2019 Brattle Group report estimated that to meet clean energy goals and cost effectively accommodate the move to electrified transportation and heating would require $30–$90 billion in incremental transmission investments in the U.S. by 2030 and an additional $200–$600 billion investment required between 2030 and 2050.
Princeton University’s comprehensive Net-Zero America report presents various models on the need for transmission, the most ambitious calling for a tripling of transmission mileage. Following the passage of the landmark Infrastructure Reduction Act (IRA), the Princeton’s Zero Lab shared an analysis of the importance of transmission to achieving the IRA’s full carbon reduction benefits called Transmission is Key to Unlocking the Full Potential of the Inflation Reduction Act.
In a recent call to action, Bill Gates clearly emphasized that “transmission is key to our clean energy future.”
Grid Reliability and Resilience
We depend on the grid to not just power our homes and businesses, but to power nearly every facet of our economy. Reliability is key to the smooth operation of our daily lives and livelihoods.
Despite the essential role of the grid, many of its critical infrastructure components have surpassed their original life expectancy, and in some cases are more than a century old. The American Society of Civil Engineers (ASCE ) prepares an infrastructure report card every 4 years, and its 2021 report it gave the energy infrastructure a C- grade. While this is up from its alarming grade of a D- in 2017, there is still more progress to be made to improve the grid to meet the needs – and the realities – of the future.
Power interruptions are costly. A DOE Smart Grid Report estimated that “power outages and interruptions cost Americans at least $150 billion each year — about $500 for every man, woman and child.”
Compounding the reliability and resilience challenge are more frequent and severe weather events and multiplying physical and cyber threats. The grid of yesterday was not designed to address the multitude of threats we are experiencing today.
Our grid must be modernized to withstand these system shocks and to recover quickly. New transmission lines are on average 55 percent more energy efficient than those being replaced. Each new or replacement project allows for modern engineering, updated safety standards and new technologies to be introduced improving reliability, resilience and threat response.
This is a system-wide challenge. To develop a robust grid that can ensure reliability, resilience and transition us to a cleaner, greener future we need all types of transmission to be built. Interregional, regional as well as local transmission projects add value in different ways. Each are essential to a modern grid. An analogy can be drawn with our national road network where local byways and off ramps that serve interstate and regional highways provide a beneficial role in providing good quality transportation access.
Upgrading and modernizing the transmission grid proactively and in anticipation of future needs is a cost-effective way to help secure America’s energy future – and it could save consumers billions of dollars each year. Investments made now to improve the grid will save money later, giving us an electricity supply that is affordable, efficient, clean, and reliable
Economic Development and Consumer Savings
In addition to transmission’s many primary benefits, transmission projects are also economic drivers, contributing significantly to GDP and job creation.
The recent WIRES Repowering America report looked at the economic benefits of $83 billion in planned transmission projects around the country. The study found that the construction phase of this infrastructure investment would add $42 billion to GDP, create approximately 442,000 well-paying jobs, and boost direct local spending by nearly $39 billion cumulatively.
The economic benefits were not limited to the construction phase. The report also found that in the longer term over the transmission assets’ lifecycle, the operations and maintenance of the transmission infrastructure would provide an annual GDP increase of $1.6 billion and create around 9,000 permanent jobs.
Additionally, transmission investment helps to unlock opportunity for new large-scale, renewable generation facilities which are typically located in remote regions. The economic benefits conferred on these host communities include property tax payments from the land used by the renewable generation facilities and in some cases, royalties paid to landowners. The revenue collected by the local communities is often used to assist critical local programs such as education, healthcare, emergency services and improvement of local transportation infrastructure.
Consumers also benefit from reduced power prices, as transmission enables access to lower cost, clean energy generation. Addressing issues like grid congestion and improving capacity sharing between regions also delivers benefits to consumers as well as economic benefits.
Another analysis, How Does Electric Transmission Benefit You, found that an Eastern Interconnect sample line designed to increase capacity between two regional markets delivered broad benefits to the economy, workers and consumers in the 3-4 years leading up to the project and in the first 15 years of operation, including:
- 4,200 jobs added annually
- GDP increased by $710M
- $275 million in savings per year for consumers on electricity costs
Transmission is foundational to the smooth operation of our electrified economy, while delivering many additional economic and consumer benefits. It is critical for national energy security and a priority for a decarbonized future.
To upgrade, expand and integrate this essential infrastructure to achieve the grid of the future requires a monumental effort, analogous to a “moonshot effort” as Larry Gasteiger, WIRES’ Executive Director, is often quoted saying, and “time is of the essence.”