Electricity Transmission is Key to Unlock the Full Potential of the Inflation Reduction Act

This report assesses the role of electricity transmission in enabling the full emissions reduction potential of the Inflation Reduction Act (IRA).

Previously, REPEAT Project estimated that IRA could cut U.S. greenhouse gas emissions by roughly one billion tons per year in 2030 and reduce cumulative greenhouse gas emissions by 6.3 billion tons of CO2-equivalent over the decade (2023-2032).1 That outcome depends on more than doubling the historical pace of electricity transmission expansion over the last decade in order to interconnect new renewable resources at sufficient pace and meet growing demand from electric vehicles, heat pumps, and other electrification.

While our modeling finds this outcome makes economic sense, current transmission planning, siting, permitting and cost allocation practices can all potentially impede the real-world pace of transmission expansion. We thus model the impact of constrained growth in U.S. electricity transmission on emissions outcomes and the pace of renewable electricity expansion under IRA.
 

Summary of Findings

• Failing to accelerate transmission expansion beyond the recent historical pace (~1%/year) increases 2030 U.S. greenhouse emissions by ~800 million tons per year, relative to estimated reductions in an unconstrained IRA case. Emissions are 200 million tons higher if transmission growth is limited to 1.5%/year.

• Over 80% of the potential emissions reductions delivered by IRA in 2030 are lost if transmission expansion is constrained to 1%/year, and roughly 25% are lost if growth is limited to 1.5%/year.

• To unlock the full emissions reduction potential of the Inflation Reduction Act, the pace of transmission expansion must more than double the rate over the last decade to reach an average of ~2.3%/year. That rate of expansion is comparable to the long-term average rate of transmission additions from 1978-2020.

• To achieve IRA’s full emissions reduction potential, new clean electricity must be rapidly added to both meet growing demand from electrification and reduce fossil fuel use in the power sector. Constraining transmission growth severely limits the expansion of wind and solar power.

• If electricity transmission cannot be expanded fast enough, power sector emissions and associated pollution and public health impacts could increase significantly as gas and coal-fired power plants produce more to meet growing demand from electric vehicles and other electrification spurred by IRA.

• If transmission cannot be expanded faster than recent historical rates (~1%/year), growing demand from electric vehicles and other electrification spurred by IRA results in over 110 million tons of additional coal consumption in 2030 than a No IRA case and roughly 250 million tons more than if transmission expansion is unconstrained.

• Expanding transmission more rapidly enables growth of wind and solar power and substantially reduces U.S. natural gas consumption, which falls 17% from 2021 levels in the unconstrained IRA case. In contrast, if transmission expansion is limited to 1%/year, natural gas use increases to 4% above 2021 levels in 2030 and remains elevated through 2035.