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Advantages and disadvantages of wide-scale installation of new transmission lines in the United States

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By Venera N. Anderson

· 7 min read


The deployment of greenfield transmission lines is a widely-discussed topic in the U.S. climate sector since two-thirds of the country experiences a heightened risk of power shortages, and more than 2,000 GW of cleaner energy sources are waiting to be connected to the electric grid (Barnard, 2023). The investments into transmission buildout usually comprise 1) projects necessary to maintain local reliability, especially those to maintain/upgrade existing facilities, 2) expansion of the regional transmission system, which is developed through the regional transmission process with a focus on reliability, public policy, or economic needs, and 3) network upgrades, which are needed to satisfy long-term firm transmission service requests or interconnect planned generation (Liebman, 2022). 

Disadvantages of installation of new transmission lines

On the one hand, the costs/disadvantages of installation of greenfield transmission lines can seem overwhelming and may not be worth it in the short term. Clifford (2023) aptly describes the process of "building transmission in the U.S. is like herding cats." First, building of new transmission lines is lengthy and expensive. For example, according to the IEA (2023), typical approval and construction times for power lines are long. It is not unheard of for a single extra-high voltage overhead line (above 220kv) to take five to thirteen years to undergo permitting and construction (see graph) in advanced economies, such as, depending on the length of the transmission line or other factors. One specific project in Wyoming, the TransWest Express, took eighteen years and $3 billion to receive the buildout approval and commence construction (Barnard, 2023). It is important to note that significantly shorter lead times can be observed in China and India compared to advanced economies. In India, the government prioritizes the rapid development of inter and intra-state transmission capacity through national programs (i.e., Green Energy Corridor) supported by substantial investment. In China, centralized decision-making and the government's prioritization strategy, seeking to connect the eastern load centers with renewable energy-rich northern and western provinces through greenfield transmission lines, leads to a shorter lead time for transmission lines (IEA, 2023).

Second, other barriers, such as stakeholder opposition from surrounding communities and environmental groups (Barnard, 2023), potential contentious negotiations with landowners for acquiring land and right-of-way for greenfield transmission lines (Blaug & Nichols, 2023), and technical challenges for building transmission infrastructure (Konhstanm, 2023), make the wide-scale installation of such lines throughout the U.S. a problematic process. 

Screenshot 2023 12 18 175517

Advantages of installation of new transmission lines

On the other hand, the advantages/benefits of deploying new transmission lines are vast. According to the Lawrence Berkeley National Laboratory study "Empirical Estimates of Transmission Value using Locational Marginal Prices," these benefits can be put into three areas: 1) grid operations, 2) system planning, and 3) non-market benefits. First, the grid operations benefits are: a) mitigation of weather, load, and variable generation uncertainty, b) production costs congestion savings under normal and extreme conditions, and c) increased competition and market liquidity. Second, the system planning benefits represent a) deferred/avoided grid capacity investments, b) increased grid hardening/resilience, and c) allowing the development of new, low-cost power plants that otherwise might be precluded due to location constraints. Lastly, non-market benefits include a) improved utilization of transmission corridors, b) system-wide emissions reductions, and c) reduced costs of meeting public policy goals (Milstein et al., 2022). 

The Lawrence Berkeley National Laboratory report specifically focuses on congestion value, the "arbitrage value of linking two locations with different prices, including during more extreme grid conditions and high-value hours" (Milstein et al., 2022). The researchers found the overall value of a single transmission line crossing state or regional boundaries to be an average of $130 million over the decade, with interregional lines holding the higher value. The buildout of additional transmission can help fill the demand and lower the prices (Barnard, 2023). 

Another study shows that the economic benefits of building a greenfield transmission line outweigh the costs by over two times. For example, in the Midwest, a transmission project that costs around $10 million is projected to attract this region's 37 billion dollars during the next twenty years, bringing a substantial return on the regional investment (Bloom, 2022). Therefore, the findings from these studies represent the foundation for an argument that expanding new greenfield transmission reduces emissions, increases grid reliability, and boosts the economy. Such buildout, as an "infrastructural catalyst for the law of supply and demand," can facilitate a more competitive electricity market, which minimizes costs and maximizes efficiency (Barnard, 2023). 

Additional advantages of new greenfield transmission deployment include broader access to various types of renewable generation from different geographic locations throughout the country. For example, the electricity from the regions with high renewable generation can supplement the low-renewable generation areas, ensuring resource adequacy and reliability (Daley, 2022). The new transmission installation can help with the electrification at scale, significantly, of heat/cooling and transport (IRENA, 2019). Lastly, expanded transmission lines are critical to enabling national energy and climate goals as they scale up hydrogen production using electrolysis (IEA, 2023). 

How should the tradeoffs between transmission costs and benefits be navigated?

Navigating the tradeoffs between transmission costs and benefits needs to be a multi-dimensional comprehensive process involving the participation of all relevant stakeholders, including utilities, federal/state/local regulators, local communities, tribes, landowners, and environmental organizations. Although it is important to consider the benefits of a local carbon economy with new transmission, the stakeholders must also consider environmental impacts and the possibility of community disruption during such a massive buildout. For instance, the DOE (2023) indicates that independent experts estimate that the country needs to build new transmission lines by 60% by 2030 and may need to triple these transmission systems by 2050 to meet the U.S. growing clean electricity demands,

The interregional, regional, and local processes are not designed to choose optional paths for bringing the lowest-cost, cleaner energy resources into the market. Lieberman (2023) emphasizes the need for integrated and centrally coordinated transmission planning processes, which can select the most cost-effective transmission system deployment necessary to obtain the cleaner energy future described in states' energy plans. She stresses that such planning should provide an equitable cost-sharing methodology between the transmission owners and load, seize the full spectrum of benefits from cleaner energy resources, and show the possible interaction and the expected dispatch between energy resources. Innovative approaches similar to van den Bergh's evolutionary-technical theoretical perspective might also help balance the costs and benefits of the wide-scale transmission buildout. This perspective focuses on "maintaining co-evolutionary adaptive capacity in terms of knowledge and technology to react to uncertainties; fostering economic diversity of actors, sectors, and technologies'' (Zachary, 2014). Coevolution is "the proper perspective for thinking about governance for sustainable development" (Kemp et al., 2007, p.1). In conclusion, all stakeholders must come together to ensure that the planning and execution processes for new greenfield transmission lines include innovative approaches to unlock and propel the transmission potential to increase reliability, reduce emissions, and ensure the economic prosperity of all citizens across the country.

References

Barnard, C (2023, January 24). The secret economic benefits of transmission lines. RealClear Energy. https://www.realclearenergy.org/articles/2023/07/24/the_secret_economic_benefits_of_transmission_lines_968205.html

Bloom, A. et al. (2022, May). The value of increased HVDC capacity between Eastern and Western U.S. Grids: The Interconnections Seam Study," in IEEE Transactions on Power Systems, 37(3), pp. 1760-1769. doi: 10.1109/TPWRS.2021.3115092.

Clifford, C. (2023, February, 22). Why it’s so hard to build new transmission lines in the U.S. NBC News. https://www.cnbc.com/2023/02/21/why-its-so-hard-to-build-new-electrical-transmission-lines-in-the-us.html

Daley, F. (2022). Rapid transmission: A low carbon economy needs better transmission and distribution. Rapid Transition Alliance. https://rapidtransition.org/commentaries/rapid-transmission-a-low-carbon-economy-needs-better-transmission-and-distribution/

International Energy Agency (2023, October). Electricity grids and secure energy transitions. IEA. https://www.iea.org/reports/electricity-grids-and-secure-energy-transitions

IRENA (2019). Electrification with renewables. IRENA. https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/Jan/IRENA_RE-Electrification_SGCC_2019_preview.pdf

Kemp, R., Loorbach, D., and Rotmans, J. (2007). Transition management is a model for managing processes of co-evolution toward sustainable development. International Journal of Sustainable Development & World Ecology, 1-15. doi.org/10.1080/13504500709469709

Kohnstam, P. (2016, May). Transmission planning challenges. IEEE Smart Grid. https://smartgrid.ieee.org/bulletins/may-2016/transmission-planning-challenges

Lieberman, J. (2021, March). How transmission planning & cost allocation processes are inhibiting wind & solar development in SPP, MISO, & PJM. ACORE

https://acore.org/wp-content/uploads/2021/03/ACORE-Transmission-Planning-Flaws-in-SPP-MISO-and-PJM.pdf

Milstein, D., Wiser, R., Gorman, W., Jeong, S., Kim, J., Ancell (2022, August). Empirical estimates of transmission value using locational marginal prices. The Lawrence Berkeley National Laboratory. https://emp.lbl.gov/publications/empirical-estimates-transmission

The U.S. Department of Energy (DOE) (2023). Queued up…But in need of transmission. DOE. https://www.energy.gov/policy/queued-need-transmission

Zachary, D. S. (2014, June 12). On the sustainability of an activity. Scientific Reports 4, 5215. doi: 10.1038/srep05215

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About the author

Dr. Venera N. Anderson is a global strategy advisor and published author on sustainability and climate issues. She creates and implements innovative solutions that address the world’s most pressing issues, such as climate change, economic development, and humanitarian challenges. She is a member of the Harvard Business Review Advisory Council. Venera is a co-author of the "Touching Hydrogen Future" book (2nd edition). She is also an International Expert at Women in Green Hydrogen, a global network which strives to increase the visibility and amplify the voices of women working in the green hydrogen sector, and a Speaker at Tech Up for Women and the Wall Street Green Summit about her vision for coastal U.S. green hydrogen hubs.

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