By Mark Jaffe, EUCI energy writer
The Southwest Power Pool (SPP) – serving all or part of 14 states from Texas to North Dakota – will need as much as $263 billion in new generation and transmission through 2050 to support a peak demand projected to rise 40% to 80%.
Those investments can be made without significant rate increases due to the growing load and especially if federal tax credits remain available, according to an analysis done for SPP by the Brattle Group.
“In scenarios without tax credits, region-wide investments are around $80 billion lower over the next 25 years and SPP’s average generation and transmission costs are about $10/MWh [megawatt-hour] higher,” in 2023 dollars, the analysis said.
The Brattle report was presented to an SPP planning task force March 18. The study gave a broad estimate for the necessary investments ranging from $88 billion to $263 billion, depending upon various projections of load growth and mixes of generating assets.
That level of investment will require an average expenditure of $3 billion to $7 billion a year through 2030 – a 20% to 50% increase compared to annual spending for the past 10 years – and then rise to $7 billion to $25 billion a year between 2030 and 2050.
This includes a 50% to 170% annual increase in transmission investment.
“Two primary factors drive the need for more transmission infrastructure in an electrified future: (1) connecting additional renewable generation resources to serve the total energy demand; and (2) ensuring that the electricity system remains reliable with increasing peak demands,” the report said.
The size and dollar-value of transmission investment will depend on the pace and scale of the adoption of electrification across the economy, according to Brattle.
SPP generates 47% of its electricity from carbon-free resources, but the share is projected to increase as load growth accelerates and large generation and transmission investments are needed to maintain grid reliability, Brattle said.
By 2050, the regional transmission organization will need 20 gigawatts (GW) to 48 GW of new wind generation. Solar is projected to outcompete wind, reaching 42 GW to 130 GW of new capacity.
As solar generation expands, 22 GW to 59 GW of battery storage will also be needed to maintain resource adequacy, the report said.
Transmission capacity will have to grow by 4 GW to 21 GW between SPP zones in the next 25 years – as a “cost-effective” way to support the delivery of generation to load centers, the report said.
The new configuration of generation and transmission will also have to compensate for a shift in peak load – especially in high electrification scenarios – with higher demand in winter months and early evening hours after sunset.
“This implies that winter planning reserve margins will need to be significantly higher than summer reserve margins, due to low solar capacity values and high temperature-correlated fossil outages in the winter,” Brattle said.
SPP carbon-free generation could reach 70% to 90% renewables by 2050, but a place for fossil fuel-generation will remain, report said.
“Conventional generation is expected to continue to serve a large share of SPP’s resource adequacy needs, representing 40–60% of the region’s accredited capacity,” according to Brattle. “This is a function of technology costs, natural gas prices, and the availability of tax credits (or similar policies).”
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