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Energy abundance policy manager Kenneth Sercy just published a new commentary highlighting how high-voltage transmission infrastructure enhances electric power market efficiency and thereby drives down customer costs. The piece delves into how the power grid operates, provides a brief description of U.S. grid history, and evidence from power sector modeling studies to illustrate the vital role of transmission in promoting market competition and enabling technological innovation.
Transmission lines allow grid operators to run the lowest-cost power plants by serving as the physical platform where power plants compete to provide electricity to customers. On an annual and decadal timeline, a strong transmission grid creates space for new technologies and firms to enter the market and compete by plugging into the grid. This dynamic has helped diversify the U.S. electricity generation mix in recent years.
Importantly, Sercy’s commentary highlights quantitative research results showing how high-voltage transmission brings greater market efficiencies across various possible future generation mixes. For example, in one recent study that modeled future transmission expansion, $12 billion of grid infrastructure investment brought $15 billion in operational cost savings, for a net savings of $3 billion, even assuming modest shifts in the generation mix over the coming decades. Many modeling studies underscore transmission’s potential for delivering benefits to society through electric bill savings, including the versatility of transmission’s value across various future scenarios. |
