[jhayward]

We can't really think of the electrical grid as a continental-scale system because it is severely constrained by transmission resources. It as to be modeled as, at best, regional networks with weak interconnection between them.

Even within regions it isn't a well-connected grid.

To give a specific quantitative example within Texas the generation network is modeled as several dozen individual markets (the "nodal market" concept) with generation and load grouped together to form nodes, which are mainly separated by key transmission congestion points.

Lack of transmission capacity sometimes leads to strange artifacts in pricing wind power in Texas, such as negative pricing (due to the Production Tax Credit lowering the floor below zero). These artifacts tend to go away as new transmission capacity comes online and paying loads in more distant markets become reachable.

[new4thaccount]

Additional transmission lowers congestion costs, but you actually increase the "wind artifact" you referred to as you have even more wind online (depending on where the transmission is placed) bidding in below zero as long as the PTC is still in effect. I don't think any new thermal generation has come online in Texas despite their extremely high shortage pricing, so you're really just putting more wind online with new transmission build outs.