Shaping the Policy Conversation
As policymakers, regulators, and utilities work to modernize the electric grid, much of the discussion understandably focuses on increasing transmission capacity, reducing congestion, improving reliability, and accelerating infrastructure development. These are important objectives, particularly as electricity demand continues to grow and new generation resources compete for access to an increasingly constrained transmission system. However, one of the most significant long-term economic considerations deserves considerably greater attention: the cost of electricity lost during transmission and the opportunity to reduce those losses through better infrastructure decisions.
Every transmission line experiences electrical losses as current flows through its conductors. These losses, commonly referred to as resistive or I²R losses, are a fundamental consequence of electrical resistance and increase with the square of the current. While the losses associated with an individual circuit may appear relatively modest, their cumulative impact across an interconnected transmission network can be substantial. Over the 40-, 50-, or even 60-year operating life of a transmission asset, the energy lost represents electricity that must be generated but never reaches the intended consumer. The economic consequences extend beyond the immediate cost of that energy and can include additional fuel consumption, generation requirements, and associated environmental impacts.
Historically, transmission investments have often been evaluated primarily on the basis of initial construction costs, reliability requirements, and the ability to accommodate anticipated electrical loads. Although electrical losses are considered in many utility engineering and planning processes, their long-term economic value is not always reflected consistently or comprehensively in project comparisons. This is particularly important when evaluating conductor technologies that may have similar installation requirements but substantially different electrical resistance, thermal behavior, and operating characteristics.
Why Transmission Efficiency Deserves Greater Policy Attention
Recent developments in federal transmission policy provide an opportunity to reconsider how infrastructure benefits are evaluated. FERC Order No. 1920 and its subsequent modifications emphasize long-term regional transmission planning and the consideration of multiple categories of economic and reliability benefits. Among the benefits identified in the planning framework are reductions in transmission energy losses. This recognition is important because it provides a foundation for evaluating transmission investments beyond their initial construction costs and immediate capacity requirements.
However, recognizing electrical losses as a potential benefit is only the beginning. The greater opportunity lies in consistently quantifying their economic impact and incorporating those findings into engineering and investment decisions. A transmission line that operates more efficiently can reduce the amount of generation required to deliver a given quantity of electricity. Those savings continue year after year and may become increasingly valuable as electricity demand grows, energy prices fluctuate, and transmission assets operate at higher utilization levels.
The relationship between capacity and efficiency also deserves careful consideration. Increasing the thermal rating of a transmission line allows it to carry additional current, but this does not necessarily reduce its electrical resistance. In fact, higher operating temperatures generally increase the resistance of aluminum conductors, while higher current produces disproportionately greater resistive losses. As a result, a technology that enables greater current flow may address an immediate capacity constraint without delivering corresponding improvements in electrical efficiency.
Advanced conductor technologies can provide a different opportunity. By incorporating more conductive aluminum within a given conductor diameter (without a weight penalty), or otherwise reducing conductor resistance, utilities can increase transmission capacity while reducing electrical losses at comparable current levels. The economic benefits of these improvements depend on several factors, including conductor resistance, loading profiles, operating temperatures, electricity prices, and the anticipated service life of the transmission asset. Nevertheless, these characteristics can be quantified and incorporated into comprehensive lifecycle evaluations.
The Value of Proven Engineering Solutions
CTC Global’s ACCC® Conductor technology offers an example of how improvements in transmission capacity and electrical efficiency can be achieved simultaneously. Its lightweight, high-strength composite core allows the conductor to incorporate substantially more aluminum than conventional steel-reinforced conductors of comparable diameter and weight. Combined with its low thermal expansion characteristics, this design enables utilities to increase capacity, reduce sag at elevated operating temperatures, and improve electrical efficiency without necessarily replacing existing transmission structures.
The potential benefits are particularly compelling when existing transmission lines must be reconductored to accommodate increasing demand. Rather than simply replacing an older conductor with another design that offers greater thermal capacity, utilities have an opportunity to evaluate how conductor selection will influence electrical losses over the remaining life of the transmission corridor. Even relatively modest reductions in resistance can produce meaningful cumulative energy savings, especially on heavily loaded circuits where losses increase rapidly with current.
American Electric Power’s transmission improvements in South Texas provide a useful example. By reconductoring existing 345 kV transmission infrastructure with ACCC Conductor, AEP was able to substantially increase transmission capacity while also reducing electrical losses. The project demonstrated that advanced reconductoring can deliver multiple benefits simultaneously, improving the utilization of existing infrastructure while helping reduce the ongoing cost of transmitting electricity.
Independent research organizations and industry groups have also contributed valuable analysis to the broader discussion of transmission investment benefits. Studies examining advanced reconductoring, grid modernization, and long-term transmission planning have helped policymakers better understand the economic opportunities associated with upgrading existing infrastructure. Building upon this research, future evaluations could place greater emphasis on the cumulative energy savings achievable through improved conductor efficiency and the long-term value those savings represent to electricity consumers.
From Recognition to Implementation
As transmission policy continues to evolve, there is an opportunity to make electrical efficiency a more prominent and consistently evaluated consideration in infrastructure planning. This does not require prioritizing efficiency over reliability, capacity, or affordability. Rather, it means recognizing that these objectives are interconnected and that thoughtful technology selection can often improve several performance measures simultaneously.
For utilities and regulators, the challenge is to look beyond initial project costs and consider how infrastructure decisions will influence operating expenses over decades of service. For researchers and policymakers, the opportunity is to develop consistent methodologies that account for electrical losses, future loading conditions, energy costs, and the long-term economic consequences of technology selection. For technology providers, the responsibility is to support these evaluations with credible engineering data, independent testing, and documented field experience.
The electric grid represents one of the largest and most enduring infrastructure investments in modern society. Decisions about how that infrastructure is designed, upgraded, and operated will influence electricity costs and system performance for generations. As we work to increase transmission capacity and accommodate growing demand, we should also recognize that the electricity we avoid wasting is every bit as valuable as the electricity we are able to deliver.
Reducing transmission losses is not simply an engineering improvement. It is a long-term economic opportunity that deserves a more prominent place in the transmission policy conversation.
