More transmission or more storage? Decarbonization in the context of hydro-rich Northeastern North America

Decarbonizing electric systems through the integration of large amounts of intermittent renewable energy complicates the balancing of demand and supply, increasing the value of storage. With the rapid expansion of short-term storage options such as batteries, flexible resources such as existing hydroelectric reservoir storage are often overlooked. Using a capacity expansion and dispatch model of the Northeastern North American power system, we draw lessons from the interconnection potential of Quebec’s large existing hydropower capacities. We find that reservoir-transmission coupling significantly decreases the cost of decarbonization, even when short-term storage costs are low, because it is used for both daily and seasonal balancing. Conversely, the value of short-term storage is compromised by the availability of reservoir-transmission coupling, even assuming high investment costs for transmission. We also describe the regional distribution of costs and benefits of storage and transmission and discuss implications for regional cooperation.