Transmission investment: Good for the economy, good for smart grid?

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Quick Take: What The Brattle Group report summarized below says about the benefits of major investments in transmission infrastructure is certainly true. But it's going to be an incredible challenge to actually get it built in light of the obstacles that steadfastly remain in its way. The regulatory and policy climate in the U.S. has yet to change for the better as far as transmission is concerned – and the looming threat of prolonged litigation isn't going away either. – Jesse Berst

A new analysis conducted by The Brattle Group for the transmission advocacy organization WIRES says annual investment in new transmission facilities could soon hit $12 billion to $16 billion in the U.S., bringing with it the potential for $30 billion to $40 billion in new annual economic activity. The report also says that level of investment could support 150,000 to 200,000 new fulltime jobs annually over the next 20 years.

Such investment also will be essential for developing and connecting more of the remote sources of renewable energy and smoothing out the variable output of those energy sources, according to a news article in RenewablesBiz.

But obstacles remain. The report also cites "regulatory risk" as an impediment to large-scale investment. And uncertainty over policy at both the state and federal levels is expected to stall the energy industry for some time.

But WIRES President Jolly Hayden, VP of transmission development for NextEra Energy Resources, quoted in the news article, sees room for optimism. "This report provides strong evidence that meeting the grid's challenges – including delivery of power from remote renewable generation to load centers far away – is good for the economy and will help create jobs. Strengthening the transmission grid will also address major reliability issues, reduce production costs, enhance competition for customers in wholesale power markets, contribute to fuel diversity, and help reduce wholesale power prices. Brattle's analysis should give policy makers confidence that the benefits will exceed the costs.

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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Read the complete Brattle Group report

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