Brattle Economists Identify Transmission Needs and Discuss Solutions to Improve Transmission Planning in a New Report Coauthored with Grid Strategies
Prepared by The Brattle Group and Grid Strategies
With the country’s current electric power transmission system infrastructure nearing the end of its useful life and a diverse set of 21st century transmission needs arising, the US has reached a critical juncture that requires improvements in transmission planning.
A new report prepared with Grid Strategies and filed in the Advance Notice of Proposal Rulemaking (ANOPR) of the Federal Energy Regulatory Commission (FERC) identifies proven practices that can improve transmission planning to address 21st century needs through more reliable and cost effective solutions.
Key takeaways include:
- Current planning practices fail to identify cost-effective solutions for 21st century needs. For example, PJM’s own studies show that onshore interconnection costs for offshore wind generation under the current interconnection study approach ($6.4 billion for 15.5 GW of offshore wind) are about double the onshore interconnection costs associated with a proactive evaluation of all existing offshore wind commitments ($3.2 billion for 17 GW).
- There is significant industry experience with better planning frameworks that go largely unused.
- The industry’s historical structure, regulations, and set of incentives cause under-planning and under-investment in the type of regional and interregional transmission that is needed to reliably and cost-effectively integrate new resources, meet public policy objectives, and serve customer loads.
- Transmission costs may grow, but added, well-planned transmission presents a more cost-effective solution that reduces system-wide electricity costs.
- New public policies and regulatory guidance are needed to implement the identified proven planning processes to achieve more efficient results.
The report, “Transmission Planning for the 21st Century: Proven Practices that Increase Value and Reduce Costs,” is authored by Brattle Principals Johannes Pfeifenberger and John Tsoukalis; Senior Associate Michael Hagerty; Associate Dr. Kasparas Spokas; and Rob Gramlich, Michael Goggin, Jay Caspary, and Jesse Schneider of Grid Strategies.