Working Paper: NBER ID: w31377
Authors: Lucas W. Davis; Catherine Hausman; Nancy L. Rose
Abstract: Encouraged by the declining cost of grid-scale renewables, recent analyses conclude that the United States could reach net zero carbon dioxide emissions by 2050 at relatively low cost using currently available technologies. While the cost of renewable generation has declined dramatically, integrating these renewables would require a large expansion in transmission to deliver that power. Already there is growing evidence that the United States has insufficient transmission capacity, and current levels of annual investment are well below what would be required for a renewables-dominated system. We describe a variety of challenges that make it difficult to build new transmission and potential policy responses to mitigate them, as well as possible substitutes for some new transmission capacity.
Keywords: decarbonization; transmission capacity; renewable energy; electricity markets
JEL Codes: L51; L94; Q41; Q48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| insufficient transmission capacity (L91) | renewable energy curtailment (Q42) |
| insufficient transmission capacity (L91) | negative wholesale electricity prices (L97) |
| renewable energy curtailment (Q42) | reduced incentive for further investment in renewables (Q48) |
| supply of renewable energy (Q42) | negative wholesale electricity prices (L97) |