The Value of Transmission
Transmission is a Valuable, Enabling Asset
Since 1941, Southwest Power Pool has been committed to ensuring the reliability of the North American bulk power grid. SPP’s success depends on a robust transmission infrastructure that is capable of transporting electricity from where it’s generated to where it’s most needed. Our members’ investments in the right transmission infrastructure pave the way for increased reliability and significant economic benefits to SPP’s stakeholders and their end-use customers.
Transmission Provides Economic Benefits
High voltage transmission infrastructure is a serious investment that provides significant returns. SPP’s 2021 Value of Transmission study examined $3.4 billion of new transmission projects our members placed in service between 2015 and 2019. The study found this new infrastructure will provide considerable dividends to our region over time. It will not only strengthen the reliability of our region, but also result in more than $27.2 billion in savings and benefits over the next 40 years: a benefit-cost ratio of 5.24
The Brattle Group independently assessed the 2021 study and called it the “best available industry practice” that “provides a more accurate and realistic estimate of the benefits provided by SPP-approved transmission projects.” The Brattle Group agreed with SPP’s assessment that the new study’s evaluation remains conservative, saying “the benefits of the 2021 Study may be underestimated.” Read their assessment.
Transmission Enables Access to Renewables
Transmission enables access to more environmentally friendly generation like wind, solar and hydroelectric power. As recently as 2007, wind comprised less than 1% of SPP’s generation mix. In 2021, wind was 35% of our total generation. We’re able to see these levels of renewable integration because of our members’ significant investment in transmission infrastructure. Our diverse fuel mix allows us to respond to a wide variety of operational circumstances: our members’ dispatchable coal and gas resources and our market-driven approach to integrating new energy have allowed SPP to incorporate renewables faster than any other regional organization.
Transmission is an Investment in the Future
Money spent on the transmission system in the SPP footprint will provide a return on investment. Our studies continue to prove the valuable benefits of new and upgraded transmission facilities. These benefits include adjusted production cost savings, access to diverse fuel types, improved market effectiveness, integration of renewable resources like wind and solar energy, reduced marginal losses and more. Conservatively estimated, most transmission projects pay for themselves in a matter of years and provide net benefits of up to hundreds of millions of dollars over their considerable life span.