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New Report Identifies Economic Savings for Texans, Optimal Approach for Modernizing the Texas Electric Grid

Posted by Adam Winer on Jul 17, 2023

1,350 more miles of electric transmission lines needed to meet Texas’ growing energy needs

AUSTIN, TXA new report by Texas-based energy analysis group IdeaSmiths LLC has modeled the most cost-effective path for the Texas electric grid to meet the state’s growing electricity needs by 2040, aiming to more effectively guarantee lower pricing for consumers. According to the report, keeping up with the demand for electricity will require the construction of approximately 1,350 miles of new transmission lines.

"The report lays out a clear, actionable roadmap for the ERCOT grid," says Matt Boms, Executive Director of the Texas Advanced Energy Business Alliance (TAEBA), which co-funded the report with national business association Advanced Energy United. "Our findings underscore the urgent need for modernizing Texas’s electricity infrastructure. Adopting this roadmap will lower electricity bills for millions of Texans, bolster grid reliability and create thousands of jobs in the Lone Star State." 

“With roughly 12 million more Texans expected by 2040, the goal of this research is to help the state’s electric grid operator identify how to meet our growing energy needs in the most cost-effective way possible,” said IdeaSmiths CTO Dr. Joshua Rhodes, who led the research. “The findings should send a strong message to the Texas grid operator that we must urgently find ways to speed up the process of expanding the electric grid in the form of new transmission lines or else we will burden Texans with unnecessarily high energy costs and a less efficient power grid.”  

The Electric Reliability Council of Texas (ERCOT), the grid operating organization that serves roughly 90% of Texas’ electric load, expects electricity consumption to increase over 30% in the next decade. This growth, coupled with the natural retirement of power plants as they age, will require new generating capacity to meet the growth in demand and more efficiently move power throughout the grid.

To reach a least-cost path to 2040, the technology-neutral analysis recommends deploying about 130 GW of new energy capacity – in the form of wind, solar, natural gas, and energy storage – which in turn delivers about 213 million more MWh of energy for Texas by 2040. Transmission upgrades could result in over $1.1 billion per year in production cost savings averaged over 15 years, while costing about $9.4 billion to build. The report authors note that the net $7 billion in savings is understated given ERCOT’s highly conservative production cost savings definition, which fails to account for transmission benefits that are quantified in every other electricity market in the United States.

In addition, the lowest-cost option would also provide:  

  • $18.9 billion in new local taxes generated by expanded renewable energy deployment and $20.1 billion in new payments for landowners over project timelines.  
  • 40,700 new jobs (20-year, full-time equivalent) supported by the construction and operation of the new transmission, solar, wind, and energy storage technology deployment. 
  • A reduction of about 121 billion fewer lbs. of CO2 as well as 316 million fewer lbs. of SO2 and 75 million fewer lbs. of NOx, per year than the grid of 2022.  
  • A reduction of about 50 billion gallons of water per year consumed by the energy grid for cooling, and 6.4 trillion fewer gallons of water withdrawn per year, compared to the grid of 2022.


"ERCOT can save consumers money and bolster reliability while investing in smarter long term transmission planning," states Tonya Miller, Executive Director of the Texas Solar Power Association. "Grid reliability is best maintained through transmission planning that includes a comprehensive look at both the cost and benefits of projects in the long term. Proactive infrastructure investment is key to securing reliability and lowering electricity bills for Texan families." 

“The report clearly demonstrates the many energy, economic, and environmental benefits that can be realized for all Texas consumers through a sustained and focused build out of the power grid,” said Mark Stover, Director of State Affairs at Apex Clean Energy. “A more holistic, timely, and smarter transmission planning process is needed, however, to realize these benefits and to ensure that growth in demand is met in the most cost-effective manner. We are long overdue for substantive policy reforms to our transmission planning process and we will continue to work to deliver solutions that are consistent with other energy markets and will put Texas back in the leadership position.”

Click here to read and download the full report. 

Topics: Press Releases, Texas, Transmission