U.S. electric utilities have increased their spending on electric transmission systems to help withstand extreme weather events such as the Texas winter storm of early 2021.
And yet the very nature of utility-scale grids may change as consumer interest in renewable energy and localized power generation increases.
In 2019, some $40 billion was invested in new transmission infrastructure and operation and maintenance of existing transmission systems, up 3% from the previous year. In a broader context, $40 billion is more than four times the amount spent in 2000, when investment stood at $9.1billion (at 2019’s dollar value).
Companies pumped just under 60% of the $40 billion into transmission investment and the remaining on transmission system operations and maintenance (O&M).
Infrastructure Investment Can Save Lives
Customers and utilities across the United States have been rocked in recent years by a string of weather disasters. Events have caused cuts to electricity supplies, lives have been lost, and property destroyed. Differing emergency responses have brought mixed results.
This year, Texas‘ February winter storm left at least 57 people dead. Millions were left without power for many days, as subfreezing temperatures overwhelmed the state’s electricity infrastructure.
California’s Pacific Gas and Electric Co. cut power during a dry windstorm in October 2019, to the chagrin of many. Research now claims the pre-emptive move may have saved more than 3 million acres and 250,000 buildings from the wildfires that raged in the aftermath. Both PG&E and Southern California Edison (SCE) had spent more than $1 billion on transmission infrastructure that year.
Projects Benefiting From Investment
More electricity transmission changes are due to come as U.S. energy load patterns and supply mix evolve alongside technological advances. The Federal Energy Regulatory Commission (FERC) proposes that new transmission policies ensure consumers benefit from any future investments, alongside risk and solutions.
Many power plants in the United States are located some distance from their customers. Large networks, or grids, transmit the power from the source to the user, and utilities often pay other utilities or companies to send for them. Utilities spent the majority of 2019’s $16.6 billion operation and maintenance costs this way.
The $23.5 billion transmission investment in 2019 replaced aging infrastructure to improve grid reliability and resilience to extreme weather events. Connecting to renewable resources has required money, too.
Projects include Minnesota Power’s 224-mile Great Northern Transmission line, fusing Minnesota to Canadian hydropower plants.
New Jersey’s Public Service Electric and Gas (PSE&G) invested n in resiliency measures against extreme weather in 2019. Its Energy Strong II project came in response to Hurricane Sandy, which caused around $70 billion damage in the U.S. in October 2012.
Diversification of the Energy Grid
Renewables will overtake natural gas as the United States’ largest provider of electricity around 2030, according to the U.S. Energy Information Administration forecasts.
Diverse renewable energy mixes produced locally — called Distributed Energy Resources (DER) — may further transform the nation’s transmission investments.
For example, the 400-strong population at Red Feather Lakes in Colorado suffers frequent power outages. Poudre Valley Electric Association (PVREA) will test a microgrid at Red Feather this spring, mixing solar panels and battery power storage to maintain supply.
PVREA is one of over 800 electric cooperatives in the United States, emerging in 1935 from the Rural Electrification Administration’s efforts to bring electricity to off-grid farms. Co-ops cover 56% of the United States’ landmass to supply 42 million people, and interest in localized schemes — small-scale solar, wind, hydro, and battery storage power — is increasing.
Cobank is a national cooperative bank serving industries across rural America. Its report claims: “The prospect of lower-cost, localized, clean generation in the form of distributed energy resources (DER) has piqued their [consumer] interest. Consumer adoption of DER is poised to accelerate as cost-cutting pressure, environmental issues, and reliability concerns shift into high gear.”
Investment in the U.S. transmission infrastructure network is increasing as extreme weather events continue to bring the potential for chaos. Underneath that bigger picture, a series of smaller, localized schemes may alter how electricity grids — and utilities — operate in the future.
Opinion writer: Tom Shearman
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