The Latest Market Data Show that the Potential Savings of New Electric Transmission was Higher Last Year than at Any Point in the Last Decade
Abstract
In 2022, additional transmission could have reduced electric system costs by more than in any year from 2012 through 2021. Generally high electricity prices coupled with extreme weather events and other factors helped drive the high value for transmission. Transmission congestion-relief values were high in many regions in 2022, with a number of interregional links reaching $200 to $300 million per 1000 MW of transmission capacity (or $23 to $34 per MWh). Additionally, wholesale pricing patterns during winter storm Elliott at the end of 2022 illustrate the role of transmission in helping manage periods of grid stress. In this factsheet, we analyze the latest data and describe what energy pricing patterns tell us about the state of the U.S. power market and the possible value of additional transmission infrastructure.