Transmission Worth in 2023 - CleanTechnica - TechnoNews

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Market Information Reveals the Worth of Transmission Remained Excessive in Sure Places Regardless of Total Low Wholesale Electrical energy Costs

In 2023 extra electrical energy transmission would have offered probably the most worth for hyperlinks that crossed between grid interconnection areas in the US or crossed between system operator areas throughout the identical interconnection. The U.S. has three interconnection areas protecting the western U.S., the japanese U.S., and Texas. Added transmission worth is equal to lowered value. Many multi-interconnection or multi-region hyperlinks had values of larger than $20/MWh, or as much as $175 million/yr per 1 GW expanded transmission. The technical transient discusses import caveats about whole worth estimates. In distinction to those excessive worth hyperlinks, many hyperlinks inside areas, or between areas within the northeast, had comparatively low values in 2023, following the general decline in wholesale electrical energy costs in 2023 in contrast with 2021-2022. In our new technical transient, we analyze transmission worth throughout the contiguous United States. We additionally discover an instance of a singular worth of transmission that’s completely different from worth created by different options, akin to constructing native era sources — its skill to ship advantages to 2 areas and ease constraints resulting from a number of kinds of circumstances.

To be taught extra about transmission worth in 2023, see our technical transient right here.

Determine 1. Transmission worth was comparatively excessive for hyperlinks that cross between interconnection areas. The three interconnection areas are: the Western Interconnection, together with CAISO and far of the Non-Iso West, the Texas Interconnection, together with ERCOT, and the Japanese Interconnection together with the remaining areas proven. Numerous hyperlinks that cross between completely different system operators throughout the identical interconnection area additionally noticed comparatively excessive transmission worth.

Replace with market knowledge in 2023

Within the technical transient, we discover the potential worth, or equivalently, the potential financial savings, that new transmission may have offered in 2023. The evaluation differs from modeling approaches which are generally used to worth transmission, as it’s primarily based solely on the distinction in wholesale-market power costs between places. After we consult with ‘transmission value’ we’re referring to the worth of extra transmission as indicated by locational value arbitrage.

This evaluation builds on our previous analysis. For instance, see:

Key Findings for 2023

Within the technical transient we offer extra element describing these key factors:

Transmission worth correlates with common wholesale electrical energy costs, and thus the decline to wholesale electrical energy costs in 2023 versus 2022 meant that many hyperlinks noticed a decline in worth in 2023 (Determine 2). Nonetheless, a lot of interregional hyperlinks maintained values near or above $20/MWh, or equivalently, $175 million per GW of transmission capability per 12 months (Determine 1). This and all worth estimates are topic to caveats mentioned within the technical transient.
Areas that noticed the most important decline in transmission worth from 2022 to 2023 embody the northeast and mid-Atlantic, together with the PJM, NYISO, and ISO-NE footprints. Each declining pure fuel costs and the dearth of a climate occasion in 2023 much like winter storm Elliott led to this decline.
Hyperlinks between Texas and the Southwest had the best worth potential in 2023, peaking at larger than $60/MWh or $526 million per GW of latest transmission.
Differing regional circumstances drove the excessive worth potential for hyperlinks between Texas and Southwest, with excessive wintertime pure fuel costs within the southwest, however not Texas, driving transmission worth throughout the winter, and excessive electrical energy demand related to an unusually sizzling summer season in Texas driving transmission worth throughout the summer season (Determine 3).
Of notice is that although each Texas and the Southwest noticed file summer season warmth in 2023, circumstances had been completely different sufficient in every area that peak electrical energy costs occurred at completely different hours in every area (Determine 4). This mismatch in timing of excessive costs demonstrates a specific worth of transmission — even neighboring areas dealing with the identical large-scale heatwave could have variations within the hours of peak power want enabling transmission to scale back excessive costs in each areas.

**Determine 2. Transmission worth is very correlated with general power costs. 2023 transmission worth (bars) comply with the decline in costs (line) noticed final 12 months**. The common worth proven is calculated throughout the set of hyperlinks in Determine 1. Notice that the set of hyperlinks within the early years is smaller resulting from knowledge constraints.

unnamed 4 1 — **Determine 2. Transmission worth is very correlated with general power costs. 2023 transmission worth (bars) comply with the decline in costs (line) noticed final 12 months**. The common worth proven is calculated throughout the set of hyperlinks in Determine 1. Notice that the set of hyperlinks within the early years is smaller resulting from knowledge constraints.

**Determine 3. Transmission worth between western Texas (ERCOT) and the Southwest was pushed by completely different phenomenon relying on the month of the 12 months.** Blue bars present transmission worth for hours when costs had been increased in Arizona, maroon bars present worth for hours when costs had been increased in Texas. Within the wintertime, excessive pure fuel costs led to excessive electrical energy costs within the west (fuel costs had been excessive throughout the western U.S. however had been low in Texas) and this value distinction drove excessive transmission values within the early portion of 2023. Excessive summer season warmth in each Texas and the Southwest affected electrical energy costs in a different way in every area and drove excessive transmission values within the late summer season.

Determine 4. Differing circumstances in Texas and the Southwest meant that the actual hours of peak electrical energy want throughout summer season (as indicated by costs) had been completely different in every area — facilitating excessive transmission worth. For instance, within the left panel one can see that the highest 50 value hours on the western hub node in ERCOT throughout August 2023 corresponded to comparatively low-price hours in Arizona. Arizona costs in August averaged lower than the 2023 annual common, however the small variety of hours with costs above $100/MWh typically corresponded to low value hours in ERCOT (seen within the magnified portion of the precise panel).

Key Limitations

The technical transient describes essential caveats and key limitations to the evaluation, together with the implications of the ‘marginal’ worth calculations and extra context.

See extra in our technical transient at: https://emp.lbl.gov/publications/transmission-value-2023-market-data.

Acknowledgements

This work was funded by the U.S. Division of Vitality’s Workplace of Vitality Effectivity and Renewable Vitality underneath Contract No. DE-AC02-05CH11231. The authors are solely chargeable for any omissions or errors contained herein.

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E-mail from Lawrence Berkeley Nationwide Laboratory.

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