Policy-Driven Transmission Expansion in the United States: Implications for Costs, Emissions, and Reliability

The declining cost of wind and solar power has transformed the energy landscape. As these technologies become economically viable, interregional transmission is increasingly important since the best renewable resources are often far from demand centers. However, U.S. interregional transmission deployment has been slow. Multiple bills in Congress aim to address this issue. This study evaluates these proposals and compares policy-driven transmission expansion to a cost-optimal approach using the GenX capacity expansion model. The analysis focuses on four key areas: interregional transmission builds, system cost savings, grid reliability during extreme weather, and climate benefits. Results show that current proposals increase interregional transmission by 68%, but new transmission placement differs from the cost-optimal scenario. The least-cost solution concentrates builds in the Central U.S., while policy-driven expansion distributes them across regions. As a result, the cost-optimal approach yields $1.52 billion (1.13%) more savings and reduces CO ₂ emissions by 28.6 million metric tons (3.65%) more compared to policy-driven expansion. These cost differences grow under a 95% CO ₂ reduction mandate. However, proposed policies improve reliability during extreme events by enabling more regional electricity exchange. In contrast, concentrating transmission in specific areas limits imports elsewhere. The study highlights key trade-offs to inform transmission policy decisions. JEL : H23, Q58, L51