The US electricity system is expected to see substantial demand growth through the mid-2030s, driven by commercial and industrial expansion, including advanced manufacturing, data centres and domestic industrial growth, alongside electrification. To assess the transmission investment needed to support this growth and broader economic and national security priorities, S&P Global Energy released the study “Powering Growth and Affordability: The Role of Transmission in Economic and National Security”, supported by the Electricity Customer Alliance and National Grid, with Converge Strategies responsible for national security and defence aspects. The study examines the scale, location and type of investment needed to meet future demand, improve affordability and reliability, and mitigate prolonged power disruptions. Under the base scenario, these demand drivers are projected to add 374 TWh of electricity consumption and over 45 GW of peak load by 2035, with higher growth under the high-demand scenario.

The study evaluates selected intraregional and interregional transmission projects to relieve grid bottlenecks, ease supply constraints and improve access to existing and new generation. It covers the US portion of the Eastern Interconnection, excluding Midcontinent Independent System Operator (MISO South) North, and identifies projects using transmission utilisation and congestion scores reflecting the volume, severity and persistence of network constraints. Projects are modelled as 345 kV single-circuit (S/C) lines connecting adjacent zones or states, assumed operational by 2035, with no line losses or outages and no detailed routing or permitting considerations. An iterative process combining capacity expansion and production cost models assesses generation development, system costs and the benefits of resolving transmission constraints. The study finds that transmission expansion delivers positive net economic benefits across all scenarios. Under the base demand scenario, system-wide net present value (NPV) benefits range from USD4 billion to USD12.4 billion, with benefit-cost ratios (BCRs) of 1.42–1.77 over a 40-year economic lifetime. Under the high-demand scenario, NPV benefits rise to USD15.3 billion in the unconstrained scenario and more than double in the constrained scenario relative to the corresponding base case, with BCRs of 1.62–1.89. The unconstrained scenario, allowing interregional connections and higher line capacities, delivers approximately three times the NPV benefits of the constrained scenario, with the PJM Interconnection accounting for most gains due to its substantial share of selected projects.

Beyond direct economic gains, the study identifies potential improvements in electricity affordability, reliability and resilience. Transmission expansion can lower retail rates by avoiding local infrastructure investment, reducing adjusted production costs and enabling access to lower-cost generation. Increased interregional transfer capacity can support reserve sharing, reduce balancing costs and limit exposure to price premiums during extreme weather, while mitigating prolonged regional outages during system stress. The study also examines transmission infrastructure’s role in national security and defence, noting that reliable electricity is essential for military installations, defence communities and the defence industrial base. Additional capacity can strengthen energy security for mission-critical loads, reduce regional disruption risks to military operations and meet rising defence production electricity needs during conflict. These benefits are assessed alongside economic and reliability gains, although the study makes no policy recommendations.

Broadly, the study identifies the following key benefits of transmission expansion:

  • Economic and affordability benefits: Reducing infrastructure costs and production costs, with potential savings for electricity customers through lower retail rates.
  • System reliability: Increasing transmission transfer capability and improving access to generation resources, thereby reducing dependence on more expensive local generation.
  • Resilience: Improving reserve sharing and reducing exposure to extreme weather-related electricity price premiums and regional power disruptions.
  • National security and defence: Strengthening electricity supply resilience for military installations, defence communities, mission-critical infrastructure and the defence industrial base.

The study concludes that proactive intraregional and interregional transmission development can deliver economic, affordability, reliability and national security benefits amid rising US electricity demand. Coordinated expansion offers greater system-wide value, particularly under high-demand conditions, by relieving grid bottlenecks, broadening access to generation resources, accommodating future load growth, reducing system costs and strengthening resilience.

The full report can be accessed here.