Which Costs More? Transmission Lines for 10x More Renewable Energy, or Pipelines for 2x More Natural Gas

April 1, 2014
Mike Jacobs
Senior Energy Analyst

Two recent reports make clear that long-distance gas pipeline infrastructure will cost more than the transmission investment needed for achieving 80% renewable electricity. The Keystone XL pipeline is just one new pipeline – let’s think about the energy system we are building.

The future as seen by gas industry. credit: INGAA

The future as seen by gas industry.
credit: INGAA

Gas industry groups America’s Natural Gas Alliance and the INGAA Foundation reported on March 18 that the gas industry sees need for pipeline investments of $641 billion over next 20 years in the U.S. and Canada. The cost of new natural gas transmission capacity could be approximately $14 billion per year (real 2012$).

On one hand, while some of the pipeline investment would serve oil needs, when electricity planners think big, they are also including increased electricity use for transportation as well. (Think electric cars.) The NREL Renewable Energy Futures study of 80% electricity from renewable energy, (with 80% annual reductions in greenhouse gas emissions) projected annual investments in new transmission infrastructure, including interconnections for all plants, was less than the gas industry costs, ranging between $6.4 and $8.4 billion/year from 2011 through 2050.

Now that the gas industry sees $641 billion to bring hydro-fractured gas to use as power plant fuel, we can compare other studies with lower transmission costs for great amounts of added wind and solar.

Other Studies

Electric supply with 80% renewables. credit: NREL

Electric supply with 80% renewables. credit: NREL

  • Utilities’ Eastern-wide (39 states, 70% of US population) EIPC study

    Transmission costs: $100 billion

    CO2 reductions: 80% in electricity sector by 2050

  • PJM (13 states, 61 million people) 30% Renewables study by 2026

    Transmission costs: $13.7 billion

    CO2 reductions: up to 40%

  • EEI (U.S. investor-owned electric utilities) report of 10 years planned transmission

    Transmission costs: $60.6 billion

    Transmission supportingrenewables: $46.1 billion

With these descriptions of our energy choices, we can make real choices. We should choose renewables first.

Posted in: Climate Change, Energy

About the author

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Mike Jacobs is leading the Union of Concerned Scientists’s work on electricity markets and regulatory reform. He develops proposals in an effort to shape federal, regional and state electricity markets, regulation and policies to encourage the expansion of renewable energy resources and the reduction of coal-fired generation.