The United States is underinvesting in its electricity grid, which will translate into a loss of $637 billion in business sales by 2029 and nearly $3 billion by 2039, according to a new report by the American Society of Civil Engineers (ASCE).
The report, “Electric Infrastructure Investment Gaps in a Rapidly Changing Environment,” found that each American household will lose on average $5,800 in disposable income 2020 and 2039 if the generation, transmission, and distribution investment gaps are not mitigated.
Likewise, the country’s cumulative GDP will fall by $394 billion by 2029 and by more than $1.7 trillion by 2039. By 2029, 287,000 jobs are projected to be lost; by 2039 the total will rise to 540,000.
Based on current investment trends, the national electricity infrastructure gap is estimated to be $208 billion by 2029, according to the ASCE report. By 2039, $338 billion will be needed to ensure a reliable energy system.
The West, with its major land expanse and large population in California accounts for 33% of the total national gap, while the Northeast and Mid-Atlantic regions, which has some of the oldest infrastructure in the U.S., account for 43% of the gap.
Grid transformation
The last time ASCE conducted this report in 2011, the U.S. energy grid was very different, primarily focused on fossil-fuel generation. Since then, it’s transitioned to a more diversified and decentralized generation portfolio, with coal plants being replaced mainly by combined cycle natural-gas fuel units.
Wind and solar energy are also increasingly contributing to the overall generation mix. In 2019, for example, total renewable generation exceeded coal-fueled generation for the first time, a trend that is expected to continue.
Investment in transmission systems
Over the last 10 years, there has been a significant uptick of investments in transmission systems, according to ASCE’s report. Transmission investments increased from $15.6 billion in 2012 to an average actual and planned annual average of $21.0 billion from 2013 through 2021.
Edison Electric Institute's (EEI) survey of its member investor-owned utilities and stand-alone transmission companies found that the surge in investment was related to providing access to clean energy and increasing the grid's reliability, security and resiliency.
However, interruptions in the form of power outages are worsening. From 2014-2018, transmission disruptions/interruption were cited as the cause of 32% of primary outage event causes. In 2019, 46% of outages were attributed to transmission disruption/interruption.
U.S. Energy Grid Facts
• Most of the nation’s transmission and distribution lines were constructed in the 1950s and 1960s, with a 50-year life expectancy, meaning they have reached or surpassed their intended lifespan. Aging equipment stands to impact reliability of the electric grid – the nation’s network of transmission and distribution systems.
• Unlike our roads and bridges, most of our electric grid is privately-owned. For-profit, investor-owned utilities serve 72 percent of customers in the county, with publicly-owned utilities and rural cooperatives serving the rest. Privately-owned, independent power producers (IPP) also interface with the grid. Federal and state agencies have regulation authority over generation and transmission systems, while customer rates are generally regulated by state and local agencies.
How is Electricity Generated?
• Generation facilities transform natural gas, coal, water, solar, wind, and other sources into electricity. About 10,000 generation facilities (i.e. power plants) are in the U.S., not including individual units such as residential solar panels or small-scale wind-farms.
• Once generated, transmission lines transfer this electricity over long distances to distribution lines. The electricity network in the U.S. includes more than 600,000 circuit miles of transmission lines, including 240,000 that are considered high-voltage. The transmission system can be thought of as the “interstate highway” of electricity delivery.
• Distribution lines provide electric power to homes and businesses. If transmission lines are the “highway” of the electric grid, distribution lines are the local roadways, carrying the electric power to its final destination. An estimated 5.5 million miles of overhead and underground distribution lines are in the U.S.3
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