Report: SPP transmission upgrades yield $240M in annual fuel savings
Southwest Power Pool’s report identified $240 million in fuel savings in one year, thanks to transmission upgrades, but the operator stressed that there are additional benefits. In addition to fuel cost savings, the study looked at benefits accruing from upgrades, including reliability and resource adequacy benefits.
SPP found the net present value of all quantified benefits is expected to exceed $16.6 billion over a 40-year period, resulting in a benefit-cost ratio of at least 3.5. Other benefits considered included: generation capacity cost savings, reduced transmission losses, increased wheeling revenues and public policy benefits associated with more optimal wind development facilitated by the transmission upgrades.
“Transmission does more than just keep the lights on. It’s an enabling resource that paves the way for numerous benefits to our stakeholders and their customers,” Nick Brown, president and CEO of SPP, said in a statement issued alongside the report. “A modernized transmission system increases reliability, reduces costs by providing access to a wholesale energy market and effectively integrates wind and other renewable energy to the grid.”
SPP said that based on actual experience during the Integrated Marketplace’s first year, fuel savings amounted to $660,000 per day, and would exceed $10 billion over the next 40 years.