Impacts of Demand-Side Resources on Electric Transmission Planning

Will demand resources such as energy efficiency (EE), demand response (DR), and distributed generation
(DG) have an impact on electricity transmission requirements? Five drivers for transmission expansion
are discussed: interconnection, reliability, economics, replacement, and policy. With that background, we
review the results of a set of transmission studies that were conducted between 2010 and 2013 by
electricity regulators, industry representatives, and other stakeholders in the three physical
interconnections within the United States. These broad-based studies were funded by the US Department
of Energy and included scenarios of reduced load growth due to EE, DR, and DG. While the studies were
independent and used different modeling tools and interconnect-specific assumptions, all provided
valuable results and insights. However, some caveats exist. Demand resources were evaluated in
conjunction with other factors, and limitations on transmission additions between scenarios made
understanding the role of demand resources difficult. One study, the western study, included analyses
over both 10- and 20-year planning horizons; the 10-year analysis did not show near-term reductions in
transmission, but the 20-year indicated fewer transmission additions, yielding a 36% capital cost
reduction. In the eastern study the reductions in demand largely led to reductions in local generation
capacity and an increased opportunity for low-cost and renewable generation to export to other regions.
The Texas study evaluated generation changes due to demand, and is in the process of examining demand
resource impacts on transmission