As shown in Table 9.A.1, EPRI projects the cost to modernize the transmission system to be $110 billion over 20 years, or approximately $5.5 billion per year. Similarly, EPRI estimated the expenditures for the distribution system over 20 years to be $340 billion to meet load growth, $6 billion to correct deficiencies, and $259 billion to modernize the distribution system. Table 9.A.2 summarizes the costs to modernize distribution.
Summing the T&D system expenditures needed to meet load growth and to correct deficiencies with the expenditure needed for the modern T&D system is likely to overestimate the total investment needed. When new lines are built (or rebuilt) to meet load growth, the additional investment to install modern technologies is less significant. In addition, technologies can meet multiple purposes. For example, dynamic thermal circuit rating can help to meet load growth by increasing the capacity of existing lines, but this is also an important part of a modern transmission system. Correcting for such overlaps (synergies), EPRI’s estimate of the total investment needed in the T&D system is shown in Table 9.A.3.
It should be noted that in order to achieve the full benefits of synergies on the transmission side, equipment throughout the system would need to be deployed in an integrated way. This is unlikely to occur until after 2020. EPRI estimated the synergies for T&D to be $72 billion and $132 billion, respectively, over the 20-year time horizon of their study. The AEF Committee (as previously stated) dropped $30 billion from the $110 billion to modernize the transmission system (by eliminating superconducting cables), which also required dropping $30 billion from the transmission synergies. The net result was that the committee estimated $80 billion to modernize the transmission system, with synergies of $42 billion when incorporating the expenditures to meet load growth and to correct deficiencies. The elimination of superconducting cables was assumed to negate an equal benefit (synergies) in meeting load growth and correcting deficiencies. These details are shown in Table 9.A.3.
In the committee’s analysis, EPRI’s cost estimates were escalated to 2007 dollars. The committee accounted for recent real escalation in materials and construction costs by using the national average T&D indexes.6 In 2007 dollars, the investment needed in the T&D systems over the next 20 years will be about $225 billion for transmission and $640 billion for distribution. These estimates