News & Media

America's Need to Modernize the Electric Transmission Grid

By: Bob Martin

As important debates continue in Washington D.C. about the need to invest in infrastructure such as bridges, roads, rails, clean water and broadband, a critical but less glamorous area of US infrastructure is getting well-deserved attention: the electric transmission grid. The electric grid transmits most high voltage electricity from generators to distribution utilities primarily on a regional basis. Whether Congress and the President agree or not on a final legislation, their discussions highlight the importance of the electric grid. It also emphasizes the urgency in prioritizing the need for modernizing this critical element of US infrastructure as well as the necessity for significant investment over the next several decades. Investments are required for four key reasons:

  • Reliability – ensuring electricity delivery amid aging infrastructure
  • Resiliency – protecting from severe weather and cyber security threats
  • Efficiency – optimizing electric transmission and leveraging new technology
  • Renewables – the need to support the dramatic shift to wind and solar generation

The electric infrastructure, as inventoried by Edison Electric Institute (EEI), includes more than 600,000 miles of backbone electric transmission lines, 240,000 of which are high-voltage lines (230 KV or greater).

Source: EIA

The reliability of the electric transmission grid is challenged by outdated grid architecture from the 1950s and ‘60s, and the overall age of the network. This will pressure operators to keep up with necessary upgrades. The Department of Energy (DOE) reports that 70% of transmission lines and large power transformers are more than 25 years old, and that the average age of all the installed infrastructure is about 40 years old.

In 2021, the DOE found that power outages are costing the U.S. economy $28 billion to $169 billion annually. Data provided from the Energy Information Administration (EIA) indicated that states like Maine, West Virginia, and Louisiana are impacted by outages at nearly triple the national rate.

Resiliency of the grid is essential given climate change, warming oceans, wildfires, and more severe weather events. The electric industry, according to the EEI, has invested more than $340 billion to enhance the electric grid since Superstorm Sandy in 2012. But the need to invest in the resiliency of the grid will accelerate over time. The measures that the EEI invested in include “reinforcing transmission infrastructure, raising vulnerable substations above flood levels, using fiber optics for real-time transmission performance monitoring, and employing wildfire prevention mechanisms on transmission lines.”

The challenges in California from both an aging transmission network and more prevalent wildfires, as well the Texas “deep freeze” this past February 2021 and inadequate planning by grid operator ERCOT, demonstrate just some of the current and future resiliency planning needs that must be addressed.

A key element of grid resiliency is the need for a significant focus on cybersecurity. On May 27th, the DOE initiated a “100-day plan to address cybersecurity risks to the U.S. electric system.” The plan aims to “enhance the cybersecurity of electric utilities’ industrial control systems and secure the energy sector supply chain.”

DOE has recently stated that since the launch of this plan, that their Office of Cybersecurity, Energy Security, and Emergency Response (CESAR), the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA), and the electricity industry “have made significant strides in support of the goals of the initiative. At least 150 electric utilities, serving almost 90 million American electric customers, have adopted or committed to adopting technologies to further improve the security of the operational technologies (OT) and industrial control systems (ICS) that manage the Nation’s electric systems.”

Optimizing the electric transmission grid and increasing its efficiency will require modernization. Enhancing the flexibility and efficiency of the grid will require leveraging new technologies like microgrids, battery storage, and advanced grid hardware to better move and manage electricity. Increasing efficiency also means lowering the costs for moving electricity, which includes addressing congestion issues that would lower the cost for the end consumer.

Microgrids allow communities, government entities, hospitals, businesses, and universities to generate and distribute their own electricity and “island” off the grid, especially in severe weather events. This increases resiliency for those on the microgrid as well as the overall resiliency for all others on the grid. Battery storage allows the grid to better handle peaks and managing congestion while advanced grid hardware provides the ability to better move and manage electricity to create efficiencies.

Even though reliability, resiliency and efficiency are critical driving factors for modernizing the grid, the most dominant single factor is now renewable energy. The current electric grid has limited capabilities to handle the US renewable energy future. Renewable electricity generation will increase more rapidly than overall electricity demand over the next thirty years. By 2050, the EIA projects that renewables will comprise 42% of the fuel mix for electric generation. In the EIA’s “2021 Annual Energy Outlook,” they forecast that electricity from renewables will surpass nuclear and coal generation this year and that, by 2023, the US will add 117 GW of new wind and solar capacity. EIA is projecting that by 2050, solar will make up 47% of the electricity generation, while wind will make up 34%.

Source: EIA(2021)

If the American public wants to benefit from those renewables, they must expand access to the utility-scale solar farms on the west coast, offshore wind from the east coast, and large wind farms in the Midwest and Southwest by constructing more high-voltage direct current (HVDC) electric power transmission systems that can handle increase demand for renewable energy. The American Wind Energy Association estimates that “20 to 30 GW of offshore wind capacity will be operational by 2030 and will represent between $28 billion and $57 billion of investment injected into the nation’s economy providing additional economic output of $25 billion per year” (2020). In the DOE’s National Renewable Energy Laboratory “2018 Cost of Wind Energy Review” (December 2019), they found that state governments have already committed more than 28 gigawatts of offshore wind by 2035.

Source: DOE

According to a 2020 Princeton University study, “Net-Zero America”, they state that “to achieve a zero-carbon future by 2050, the existing high voltage transmission capacity will need to expand by approximately 60 percent by 2030 and triple compared to 2020 capacity through 2050 to connect wind and solar. Total capital investment in transmission will need to reach $360 billion through 2030 and $2.4 trillion by 2050.”

The positive news is, as the EEI reported, “in 2019, investor-owned electric companies spent $23.4 billion on transmission investment, compared to $22.2 billion in 2018 (in nominal dollars), and were projected to spend $26.1 billion in 2020. Investor-owned electric companies are planning to invest approximately $106 billion on transmission construction between 2020 and 2023 (in nominal dollars).” In addition, the White House has reported that included in the $1.2 trillion bipartisan infrastructure legislation currently working its way through Congress, is a $73 billion investment in transmission grid. That $73 billion includes $50 billion directly targeted at reliability and resiliency for the grid.

But in the big picture, long-term investments will be required. The Federal Energy Regulatory Commission and Regional Transmission Operators need to play key roles in financing these investments over the next several decades.

In conclusion, the US needs to make significant investments in the electric transmission grid as a key element of its vital infrastructure. Those investments will help improve reliability, resiliency, efficiency (with lower electricity costs), and ensure the success of renewable energy for future generations.

Bob Martin is a Managing Director at Christie 55 Solutions. He is the former NJ Commissioner of Environmental Protection and former Partner at Accenture LLP. Bob is a recognized expert in the utility and energy industry.