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Facilitating Transmission Expansion to Support Efficient Decarbonization of the Electricity Sector

Paul L. Joskow

June 2021

Many governments, electric utilities, and large electricity consumers have committed to deep decarbonization of the electricity sector by 2050 or earlier. Over at least the next 30 years, achieving decarbonization targets will require replacing most fossil-fueled generators with zero carbon wind and solar generation along with energy storage to manage intermittency. The best wind and solar resources are located in geographic areas that are often far from the locations of the legacy stock of generating plants and their supporting transmission infrastructure. Many studies have found that achieving decarbonization targets in a cost-efficient manner will require significant investments in new intra-regional and interregional transmission capacity. However, there are numerous barriers to planning, building, compensating, and financing this transmission capacity. They go beyond “NIMBY” opposition. These barriers are identified and potential reforms to reducing them are discussed here. The focus is on the U.S. and Europe. Comparing and contrasting U.S. and European responses to similar challenges yields suggestions for institutional, regulatory, planning, compensation and cost allocation policies that can reduce the barriers to efficient expansion of transmission capacity.

Key words: electricity, transmission, decarbonization, wind generation, solar generation, regulation

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