We use the roll-out of a large transmission expansion in Texas\u2019 electricity market to measure the market impacts of the transmission expansion on benefits of increased renewable capacity. We find large market benefits leading to a payback period of roughly 14 years. However, total welfare improvements from reduced congestion depend on how global non-market externalities are internalized by regional policy makers: accounting for non-market externalities reduces the payback period of this project from 14 to less than 9 years. We discuss the finding\u2019s implications for the welfare of regional decisions to build transmission capacity for the U.S. wholesale electricity market.<\/p>\n","protected":false},"excerpt":{"rendered":"
We use the roll-out of a large transmission expansion in Texas\u2019 electricity market to measure the market impacts of the transmission expansion on benefits of increased renewable capacity. We find large market benefits leading to a payback period of roughly 14 years. However, total welfare improvements from reduced congestion depend on how global non-market externalities 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