Enhancing the U.S. Electric Grid to Meet the Nation's Growing Power Needs
The U.S. power grid is in need of an upgrade and the federal government knows it. Much of the electric grid was built in the 1960s and 1970s, according to a paper published by the U.S. Department of Energy’s Grid Deployment Office (GDO). “While the system has been improved with automation and some emerging technologies, our aging infrastructure is struggling to meet our modern electricity needs, such as renewable energy resources and growing building and transportation electrification,” it says. The article goes on to note that 70% of transmission lines are more than 25 years old, and many are approaching the end of their typical 50- to 80-year lifecycle. This can have major consequences including affecting the frequency of power outages, susceptibility to cyberattacks, and occurrences of other emergencies caused by faulty grid infrastructure.
“Severe weather events and the outages they cause bring much-needed attention to our aging grid infrastructure, particularly the need for hardening and upgrading our distribution grid, the last mile of the grid that delivers power to our homes, businesses, and critical infrastructure,” Mike Edmonds, Chief Commercial Officer with S&C Electric Co., told POWER. “To do so, we need to focus on making the distribution grid more intelligent and automated. Investing in a resilient distribution grid requires long-term planning and strong partnerships working together to prioritize the last mile. Smart grid technology and infrastructure hardening can minimize the impact of outages and ensure that electricity is delivered reliably and securely to businesses and our communities.”
The GRIP Program
The government took a major step in shoring up the power grid with the creation of the Grid Resilience and Innovation Partnerships (GRIP) program, a $10.5 billion initiative funded through the Bipartisan Infrastructure Law and administered by the GDO. GRIP projects are expected to tackle a range of grid needs, thereby improving resilience and reliability across the country. Areas of focus include prevention of wildfires through smart grid investments to predict, identify, and address problems earlier and improve real-time responses to threats; improvements in neighborhood resilience through microgrids that expand renewable and distributed energy resources; and investments in disadvantaged communities, producing economic development and good-paying jobs, among other things.
“The GRIP program is perhaps the most significant power grid investment in our lifetimes, and a focus on distribution will provide the most bang for the buck with technology that already exists to enable a more resilient grid,” said Edmonds. “This includes all-in-one feeder solutions that enable greater segmentation, self-healing restoration, and even the ability to test for faults on the growing proportion of underground lines; devices that provide intelligence at the grid edge, and distribution infrastructure hardening and undergrounding.”
Money Flowing to Capital Projects
But it’s not just the government spending money on infrastructure, investor-owned utilities are pouring funds into capital improvements too. “The North American investor-owned regulated utility industry’s capital spending on safety, reliability, and decarbonization continues to grow to record levels,” Gabe Grosberg, managing director for North America Regulated Utilities with S&P Global Ratings, told POWER. “We expect the 2023 capital spending for North America’s electric, gas, and water utilities to approximate $205 billion and to further rise to about $210 billion and $215 billion in 2024 and 2025, respectively.”
Grosberg continued: “Given the sustained rise in capital spending, rate case filings have significantly increased. In 2019 and 2020, U.S. annual rate case filings averaged about $6 billion but have since significantly increased to an annual average of about $16 billion. This material increase elevates the industry’s reliance on effectively managing regulatory risks and consistent constructive rate case orders.”
Trends to Watch in the Year Ahead
S&C Electric’s Edmonds noted three trends to keep an eye on in the coming year. “The distribution grid has suffered from under-investment for way too long, and desperately needs to be modernized,” he said. “This part of the grid has the most immediate impact on consumers, yet it is the most vulnerable to the effects of severe weather. According to the NERC [North American Electric Reliability Corp.] Winter Reliability Assessment for 2023–2024, more than half of the U.S. is at risk of electricity shortages this winter due to regional shortfalls, increased demand for power, and other challenges during sustained cold weather events,” said Edmonds.
“Another trend we are seeing is the decentralization of power systems, with self-healing components that do not depend on a central communication system to operate when a weather event is happening,” noted Edmonds. “The grid is going to have a new architecture—this does not mean a new control room, more monitoring, or more metering. The grid needs more smart devices that actually do the work—and can work independently to keep the power on. They will minimize the duration of, or even eliminate, outages.”
The third trend Edmonds felt was notable involves the grid edge. “We are also seeing an increased focus on improving power supply resilience and reliability at the grid edge—to meet the needs of customers who are living further away from city centers in more rural areas. They require dependable power, and more of it, to support their everyday lives.”
Edmonds said no conversation about the future of energy distribution and access is complete without discussing rural reliability and energy equity. The Biden administration announced nearly $11 billion in funding to support rural clean energy initiatives, highlighting a strong commitment to upgrading and modernizing rural energy infrastructure. “This funding will assist in lowering energy costs, increasing energy resiliency, and creating jobs in rural communities,” Edmonds said.
—Aaron Larson is POWER’s executive editor.