Chicken and Egg: Texas Electricity Transmission

Chicken and egg: Electricity transmission and investment in renewable energy

Journal of Public Economics | Gaurav Doshi

Science Direct | April 2026

Highlights

• Transmission expansion leads to long-term investment in renewable energy.

  
  

• In Texas, counties with investment in grid expansion saw 100 MW per year in higher wind capacity generating $1.56 billion per year in avoided emissions.

  
  

• Landowner lease payments rose by $11 million per year, creating private local benefits.

  
  

• Localized wind investment without sufficient transmission capacity can increase curtailment, partially offsetting emissions gains.

Abstract

I study the impact of grid expansion on long-run renewable investment spillovers in wholesale electricity markets. Using a discrete choice model of wind project location and a Difference-in-Difference design, I analyze a large-scale grid expansion project in Texas. Results show $1.56 billion per year in lower emissions and $11 million in increased annual payments to landowners due to wind investments in areas with grid infrastructure. However, localized wind investments coupled with limited transmission capacity have led to rising curtailments in recent years, highlighting the need for a long-term planning approach to transmission policy.

Read the full comprehensive article here.