Facilitating Transmission Expansion to Support Efficient Decarbonization of the Electricity Sector

Abstract

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. However, achieving decarbonization targets in a cost-efficient manner will require significant investments in new intra-regional and interregional transmission capacity. In this paper, I identify and discuss potential reforms to reduce the numerous barriers to planning, building, compensating, and financing this transmission capacity. By comparing and contrasting U.S. and European responses to similar challenges, I provide suggestions for institutional, regulatory, planning, compensation and cost allocation policies that can reduce the barriers to efficient expansion of transmission capacity.