Optimal transmission expansion modestly reduces decarbonization costs of U.S. electricity

Abstract

Major government studies and policy reports project that substantial expansion of interregional transmission will be needed to integrate clean energy and ensure reliability in decarbonized power systems. Using the open-source Switch capacity expansion model with detailed representation of existing U.S. generation and transmission infrastructure, solar, wind, and storage resources, and hourly operations, we evaluate the role of interregional transmission across least-cost, carbon-priced, and zero-emissions scenarios for 2050. An optimal nationwide plan would more than triple interregional transmission capacity, yet this reduces the cost of a zero emissions system by only 7% relative to relying on existing interregional transmission, as storage, solar and wind siting, and nuclear generation serve as close substitutes. Regional cost and rent effects vary, with transmission generally favoring wind and hydrogen resources over solar and batteries. Sensitivity analysis shows diminishing returns: one-fifth of the benefits of full expansion can be achieved with one-twelfth of the added capacity, while cost reductions for batteries and hydrogen provide comparable or greater system savings than interregional transmission. Upgrading existing interregional corridors with advanced conductors roughly doubling capacity per link at half the cost of new builds reduces system costs by only 1.6%, suggesting that reconductoring benefits are modest and that realizing their full potential likely requires pairing with new connections on key corridors or complementary reductions in battery costs. These results suggest that while substantial transmission expansion is economically justified, a diverse set of flexibility resources can substitute for large-scale grid build out, and the relative value of transmission is highly contingent on technological and cost developments.