Well-Planned Electric Transmission Saves Customer Costs: Improved Transmission Planning Is Key to the Transition to a Carbon Constrained Future

Abstract:

Excerpt for the Executive Summary
The electric power industry is transforming rapidly due to low natural gas prices, technological changes, dramatic cost reductions in renewable generation, and increasingly ambitious environmental policy goals and consumer preferences. The Environmental Protection Agency’s (EPA’s) Clean Power Plan (CPP) is perhaps the most visible and heavily-debated regulatory mandate in this trend toward an environmentally-constrained electricity industry. Much of the industry’s discussion about CPP and related environmental objectives has focused on energy efficiency, reducing coal-fired generation, and adding more renewable generation. This whitepaper complements those discussions by showing how a well-planned transmission system can help meet environmental objectives at lower overall costs, saving customers tens of billions of dollars compared to a system that is primarily planned to focus on more immediate needs to meet reliability requirements. The current uncertainties over CPP implementation are not likely to change the ongoing trend toward a clean power future, given that both market forces and policy preferences for cleaner energy sources are pushing in the same direction: natural gas prices currently are projected to remain relatively low for the foreseeable future, the costs of various renewable energy technologies continue to decrease, and customer preferences are evolving toward having more control over the their energy usage, including the energy source. Furthermore, many states, towns, corporations, and consumers are pursuing their goal of reducing emissions from electricity generation, independently of federal and state regulations. Such trends will invariably shift the country’s generation mix from coal to natural gas and renewable resources, with necessary upgrades to the nation’s transmission grid.