The U.S. electricity system will require $338 billion in investment within 20 years to accommodate the increasing use of renewable energy, according to a new industry report.
Because the availability of wind and solar energy is based on weather conditions, the grid could struggle to keep the lights on and be reliable if these investments are not made, according to the report commissioned by the American Society of Civil Engineers released Tuesday.
To ensure reliability, the grid needs $208 billion of investment by 2029 and $338 billion by 2039 across its three major components: generation, transmission, and distribution.
The report found that 287,000 job losses will occur in 2029 and 540,000 job losses in 2039 if these needs aren’t addressed.
That’s because a grid facing the prospect of unanticipated outages would lead to lost productivity, an increased reliance on backup generators, and the need to restock spoiled food, among other things.
“We need to encourage all government entities to look up and try to imagine where we need to be in 2039 and to anticipate how we can prevent the enormous job loss and economic dislocation that underinvestment is going to produce,” said Jim Hoecker, senior counsel and energy strategist at Husch Blackwell and a former chairman of the Federal Energy Regulatory Commission, an independent agency that regulates the interstate transmission of electricity. Hoecker was speaking at a webinar on the report hosted by the ASCE.
The need to accommodate more renewables is not the only reason policymakers may push for improvements to the U.S. power grid.
Most of the transmission lines that carry electricity from power plants and the distribution lines that then deliver the electricity to homes and businesses were built in the 1950s and 1960s with a 50-year life span, and most have not been replaced.
The grid is facing stress from worsening extreme weather events. More than 250,000 customers in Louisiana remain without power as a result of Hurricane Laura last week when hundreds of transmission towers were destroyed or damaged.
Transmission is also poised to play a more important role as policymakers aiming to combat climate change move to increase the use of wind and solar power and electrify other parts of the economy, such as transportation and buildings.
More transmission would help deliver wind and solar energy from the rural areas where the power is generated to population centers.
“We are in the middle of a perfect storm,” said Otto Lynch, the president and CEO of Power Line Systems and a member of ASCE.
The report comes as President Trump and Republicans criticize Democrat-run California for imposing rolling blackouts on people in the state amid a severe heat wave last month.
California has some of the most aggressive climate policies in the country, and Republicans blamed the outages on the state’s efforts to use more renewables, limit fossil fuel use, and phase out nuclear power.
California officials and energy experts have said the shut-offs resulted from poor planning among the state’s energy agencies and a combination of two gas plants going offline, wind power slowing, and solar power dropping off at night.
The new report found that most electricity infrastructure spending must occur in the West, accounting for 33% of the “investment gap,” and the Northeast and mid-Atlantic, responsible for 43% of that hole. Many states in these regions have renewable energy goals.
Experts say transmission is especially key.
But the complex permitting process, often plagued by not-in-my-backyard-ism, can take more than a decade, as states where power lines would need to be built but don’t necessarily benefit from using or generating the power have little incentive to approve them.
Lynch said permitting can represent half the cost of building the line.
“The challenge for transmission is not whether it’s hard enough but whether it reaches resources that are remote to deliver renewables,” Hoecker said. “That’s how we help meet climate change.”
