The Brattle Group’s Johannes Pfeifenberger and Delphine Hou completed an analysis that was released today estimating the necessary transmission infrastructure investments in the United States and Canada through 2030 and the associated employment and economic benefits resulting from that investment.
The study was commissioned by WIRES (Working group for Investment in Reliable and Economic electric Systems), a non-profit trade association that promotes investment in electric transmission and progressive state and federal policies toward that end. The analysis finds that transmission investment in the United States will likely range from $12 to $16 billion annually through 2030, assuming current barriers to planning, permitting, and cost recovery of regional transmission projects can be overcome. This level of investment is estimated to stimulate $30 to $40 billion in annual economic activity (sales and resales of goods and services) and support 150,000 to 200,000 full-time jobs each year over the 20-year period. The study also identified C$45 billion in planned Canadian transmission investments through 2030, averaging C$5 billion annually over the next several years. This level of Canadian investment will support between 20,000 and 50,000 full-time jobs annually. Once operational, the expanded transmission infrastructure will also enable additional economic activity, such as the construction of renewable generation projects, which is estimated to support an additional 130,000 to 250,000 full-time jobs in the U.S. during each year of the projected 20-year renewable generation construction effort. In addition to these employment and economic stimulus benefits from constructing the facilities and manufacturing equipment, the study finds that strengthening the transmission grid will provide other important benefits, including:
- Reduced transmission losses, production cost savings, enhanced wholesale power market competition and liquidity, and associated wholesale power price reductions;
- The economic value of increased reliability, insurance against high-cost outcomes under extreme market conditions, and increased flexibility of grid operations;
- Generation investment cost savings and access to lower-cost renewable generation;
- Reduced emissions and fossil fuel consumption; and
- Economic benefits from increased federal, state, and local tax income.
The operations-phase benefits of an enhanced transmission grid tend to be widespread geographically, diverse in their effects on individual market participants, occur over long periods of time (i.e., several decades), and, as is demonstrated with several examples in the analysis, more than offset the rate impacts of investment cost recovery. The study is available for downloaded on the WIRES website or by following the link below.
Johannes Pfeifenberger|Delphine Hou