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Electric Transmission Upgrades Yield Billions In Benefits

Upgrading electric transmission lines can result in billions of dollars in benefits according to a new study published by the Southwest Power Pool.

sun and transmission lines - flickr Dennis WilkinsonSpecifically, upgrades to electric transmission lines in the Southwest Power Pool (SPP) region between 2012 to 2014 resulted in more than $240 million fuel cost savings during the first year alone, and could yield benefits exceeding $16.6 billion over 40 years.

The Value of Transmission report published by the Southwest Power Pool, which supplies electricity to 14 states across the central US, analyzed the value provided by 348 transmission upgrades that required capital investment of almost $3.4 billion. Beyond the initial fuel cost savings, the authors of the report also quantified other benefits that stem from transmission upgrades — such as reliability and resource adequacy, generation capacity cost savings, reduced transmission losses, increased wheeling revenues. On top of that, the report also noted the policy benefits that stem from more optimal wind development facilitated by upgrades to aging transmission lines.

“Transmission does more than just keep the lights on,” said Nick Brown, president and CEO of SPP. “It’s an enabling resource that paves the way for numerous benefits to our stakeholders and their customers. A modernized transmission system increases reliability, reduces costs by providing access to a wholesale energy market and effectively integrates wind and other renewable energy to the grid.”

Transmission upgrades, especially in America, where the existing transmission infrastructure is aging and, in some places, failing, are vital for renewable energy development. With the inherently intermittent nature of renewable energy generation such as wind, solar, and hydroelectric, transmission lines need to be upgraded to deal with a less-consistent flow of electricity. This is especially the case as the development of renewable energy continues to grow at great speeds — the SPP’s percentage of renewable energy contributing to its overall energy mix has grown from 1% at the end of 2007 to 13% in 2015.

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