MIT analysis finds BIG WIRES Act could reduce US power outages by nearly 60%

A bill that would require a minimum level of electric transmission capacity between US regions could reduce the likelihood of weather-driven blackouts by more than half, according to a new analysis by researchers at the Massachusetts Institute of Technology.

The bill, called the BIG WIRES Act, was formally introduced in September 2023 by US Sen. John Hickenlooper (D-Colo.) in an effort to boost the nation's ability to share large amounts of power across long distances.

It would direct the Federal Energy Regulatory Commission to finalize a rule within 18 months that requires planning regions to be capable of transferring the equivalent of 30% of their present-day peak electricity demand to neighboring regions.

Regions could satisfy that requirement in multiple ways, including the construction of new transmission or upgrades to existing facilities. New generation and storage assets and the use of grid-enhancing technologies could also help meet the minimum standard.

While the fate of the bill is uncertain, four MIT researchers conducted modeling that found, if implemented, the legislation would result in approximately 56 GW of additional interregional transmission capacity by 2035. The researchers also estimated that new capacity could reduce weather-driven blackouts in some regions by as much as 58%.

More transmission capacity leads to cost savings

The analysis, recently published by MIT's Center for Energy and Environmental Policy Research, used a proprietary capacity expansion model called GenX. The model aggregates publicly available industry data from agencies such as the National Renewable Energy Laboratory and US Energy Information Administration.

The GenX modeling found that most of the projected capacity expansion would occur in the Eastern Interconnection in corridors between the Mid-Atlantic and Midwest regions, as well as Florida and the Southeast, Mid-Atlantic and the Carolinas, and New England and New York. The Midwest and Central regions and Mid-Atlantic-to-Southeast corridor would also see substantial capacity gains.

Overall, the researchers estimated that the BIG WIRES Act would produce nationwide net cost savings of $330 million annually, primarily tied to the increased deployment of low-cost renewable energy. The legislation, projected to reduce carbon emissions 5.5% compared to the status quo, would also yield $14 billion in climate benefits based on the US Environmental Protection Agency's proposed social cost of carbon of $190/ton.

The cost savings would be concentrated in California, the Carolinas, the Midwest and New York. Texas would not be covered by the BIG WIRES Act, but the state could voluntarily adopt the requirements and would also save on system costs if it opted in, according to the modeling.

Costs were projected to increase in the Central, Mid-Atlantic, Northeast and Southwest regions.

Where costs are projected to increase, however, "we also see an increase in electricity exports to other regions, thereby increasing regional revenues," the researchers said.

Savings would fail to materialize beyond a 50% transfer capacity threshold, according to the modeling.

"Interestingly, the optimal in this scenario is at 30% — exactly what the BIG WIRES Act proposes," the researchers noted.

Reduction in power outages

To gauge how the BIG WIRES Act might mitigate weather-related grid outages, the researchers conducted 1,000 random model simulations that assumed an extreme weather event on the same scale of a severe December 2022 storm.

The storm knocked approximately 13% of the Eastern Interconnection's capacity offline.

The researchers found that the number of affected homes in the Mid-Atlantic, Southeast and Carolinas would be reduced from 4.7 million under the status quo to 2.1 million with the BIG WIRES Act — a 58% reduction.

They attributed most of the reduction to increased power transfers from New York and the Midwest into the Mid-Atlantic region.

"The BIG WIRES Act would enhance the grid resiliency to extreme weather events, such as heat waves, cold snaps and hurricanes, by providing more flexibility and diversity in the generation mix and reducing the reliance on natural gas," the researchers said.

The analysis comes as FERC proactively considers its own rulemaking (AD23-3) to set a minimum interregional transfer standard. The North American Electric Reliability Corp. is also currently studying the issue at the direction of Congress, with results that must be filed with FERC by December 2024.

The authors of the MIT analysis are Audun Botterud, Christopher Knittel, John Parsons and Juan Ramon Senga.