The U.S. Department of Energy (DOE) introduced a proposal in July to increase the adoption of more efficient water heaters. Water heaters are major energy-consuming appliances, second only to heating, ventilation, and air conditioning (HVAC) systems, and they account for an estimated 13% of annual residential energy use. These appliance efficiency standards and using electricity as the source of power over fossil fuels will help us achieve our decarbonization targets in the long term. Still, there’s a bigger problem right now.
We increasingly depend on electricity to power essential aspects of our personal and professional lives—from smartphones, computers, and home health care equipment to HVAC systems and transportation—and the U.S.’s electric infrastructure is showing its age. Most of the U.S. electric grid was built in the 1960s and 1970s when the population was around 181 million. Today, the U.S. population is approximately 332 million people. Yet, the electric grid has not kept pace. Much of last century’s equipment is still out there. While the Bipartisan Infrastructure Law and the Inflation Reduction Act allocate about $29 billion for power grid upgrades, that number represents just a fraction of needed grid funding, according to the World Resources Institute.
The nation’s aging transmission and distribution system needs a significant overhaul, and underinvestment could make electricity service less reliable and hurt the nation’s economy in future years. For instance, the DOE estimates that power outages cost U.S. businesses roughly $150 billion annually. At the same time, the cost to American families is immeasurable if home healthcare devices aren’t powered, electric cars can’t be charged, and appliances, air conditioners, or heating units can’t run. With more demand for electricity and more vital functions depending on a reliable supply, the grid must be able to transmit and distribute much more power than it did in the past.
Building a 21st-century grid requires broad collaboration. Together utilities, regulators, government, industry, and consumers have a unique opportunity to transform our grid infrastructure and address the growing demand for sustainable and resilient electricity. This means upgrading existing transmission lines to incorporate distributed energy resources and building new lines to bring energy from remote renewable resources to population centers. The distribution grid—which carries power to individual homes and businesses at the local level—will need even more investment than the transmission system. Sixty percent of U.S. distribution lines have surpassed their 50-year life expectancy, and according to a report from the National Conference of State Legislatures, $1.5 trillion to $2 trillion will need to be invested by 2030 to modernize the grid just to maintain reliability.
Fortunately, U.S. companies are doing what they always do—innovating solutions to challenging problems. New technology is available right now that can help the country better manage its energy needs, modernize infrastructure, and ensure the energy transition to clean power is a smooth and successful one. Three ways that smart investment, with focused attention on distribution, can make a difference include:
Improving Grid Resilience. In addition to exponential growth in electrical load, extreme weather events, such as hurricanes, prolonged heat waves, and intense storms, are becoming more frequent and severe. Distribution grids, such as overhead lines, are particularly vulnerable to wind, heavy rain, and downed trees. Technology exists right now that can improve the grid’s ability to maintain or restore power quickly after a disruption. Strategic investment in long-term distribution grid resilience can help to reduce or even make sustained outages a thing of the past.
Making the ‘Self-Healing’ Grid a Reality. Integrating intelligence into the grid allows for real-time communication and monitoring. New advanced distribution grid technology locates and isolates faults in overhead and underground lines, reroutes power for faster service restoration, and operates independently of centralized control systems. These technologies dramatically improve reliability and power availability and can be installed and deployed on the grid today.
Supporting Distributed Energy Resources. A grid built for centralized power must be upgraded to incorporate distributed energy resources at the grid edge and support bi-directional power flow. Investment here helps maximize installed capacity and enable a stable, flexible grid with reliable and resilient power. This is especially important as we shift to clean energy sources through renewables and work to minimize our dependence on fossil fuels.
Our power grid is experiencing complexity for which it wasn’t built, and there is still much more to come as our dependence on electricity will keep growing. Increased demand from electric vehicles, equipment, and yes, appliances like water heaters will only keep adding to the load growth and stress. To transform our grid for the 21st century, take full advantage of the energy transition, and ensure power, no matter the weather, we must prioritize investment in the edge of the grid, where most of us plug in and live our lives.
Now is the time to work together to ensure a reliable, resilient, and sustainable future. The question is not “Can we afford to invest in the distribution grid?” but, rather, “Can we afford not to?”
—Anders Sjoelin is president and CEO of S&C Electric Company.