Reducing transmission expansion by co-optimizing sizing of wind, solar, storage and grid connection capacity

Expanding transmission capacity is likely a bottleneck that will restrict variable renewable energy (VRE) deployment required to achieve ambitious emission reduction goals. Grid interconnection and inter-regional transmission capacity may be reduced by the optimal sizing of VREs to grid connection or co-location of VRE and battery resources behind the grid interconnection, but neither of these capabilities are commonly captured in macro-energy system models. We thus develop these two new functionalities to explore the substitutability of storage for transmission and VRE resource trade-offs through 2030 in the Western Interconnection of the United States. Our findings indicate that not modeling co-location fails to capture the full substitutability of storage and solar photovoltaic (PV) resources for transmission: co-location can reduce long-distance inter-regional transmission expansion by 12-31% and decrease grid connection capacity and shorter-distance transmission interconnection by 20-25%. We also demonstrate that not modeling colocated storage does not accurately reflect competition between wind and solar PV resources and underestimates the value of energy storage: co-location of VREs and storage favors solar PV (4-5% increase) and lithium-ion battery deployment (1.7-6 times increase), while decreasing wind buildout (0.9-1.6% decline).