Transmission value in 2023: Market data shows the value of transmission remained high in certain locations despite overall low wholesale electricity prices

In 2023 additional electricity transmission would have provided the most value for links that crossed between grid interconnection regions in the United States (the Western Interconnection, the Eastern Interconnection, the Texas Interconnection) or crossed between system operator regions within the same interconnection. Many multi-interconnection or multi-region links had values of greater than $20/MWh, or up to $175 million/yr per 1 GW expanded transmission (subject to limits to the depth of the market at each side of the link). In contrast, many links within regions, or between regions in the northeast, had relatively low values in 2023, following the overall decline in wholesale electricity prices in 2023 compared with 2021-2022. The most valuable link in 2023, at $61/MWh, was between Texas and the Southwest. Multiple events in 2023 (high natural gas prices in the western U.S., and high summer temperatures in Texas and the Southwest) were observed to have driven this high value. Of particular note, high prices in Texas occurred at a largely distinct set of hours from high prices in the Southwest, helping to drive up the value of transmission in total and demonstrating significant value to both regions. This example demonstrates the unique value of transmission (compared to other solutions, such as building local generation resources) in delivering benefits to multiple regions given its ability to connect areas of the country that inevitably face differing circumstances.