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The new estimate comes as California, Iowa and Louisiana have all seen significant power outages in recent weeks.
America’s electricity grid is facing an estimated $208 billion investment gap through 2029, as infrastructure grows old and the nation moves away from coal as a fuel for power plants and toward renewable energy sources like wind and solar, according to a report the American Society of Civil Engineers released on Tuesday.
The figure is an attempt to capture the difference between projected spending on electricity infrastructure based on current trends, and the investment required to adequately meet the nation's needs. The estimate is based on household and business electricity demands and other factors, like the age of existing equipment and the anticipated shifts in fuel sources. If the timeframe for the estimate is extended out to 2039, the projected investment shortfall grows to $338 billion.
Underinvesting in power infrastructure could make electricity service less reliable and hurt the nation’s economy in future years, the report warns. For instance, it cites an estimate indicating that the average power outage cost for a data center was $740,000 in 2016. Families can experience harder-to-measure costs when a blackout leaves them in the dark, or without air conditioning in stifling summer heat.
The report comes as California recently dealt with rolling blackouts amid a heatwave, as a derecho with winds that reportedly topped 100 mph knocked out power at one point for around 400,000 residents in Iowa in August, and as an electric utility said it could take weeks to restore power to some areas in Louisiana in the wake of Hurricane Laura, which struck the Gulf Coast last week.
But strengthening the grid to better withstand the effects of climate change and the increased frequency of severe weather and wildfires is only one of the factors driving costs.
The American Society of Civil Engineers report points out that many of the nation’s power lines were constructed in the 1950s and 1960s with a 50-year life expectancy that has now expired.
“Our grid is old,” said Otto Lynch, president and CEO of Power Line Systems and a member of the society of civil engineers’ Committee on America’s Infrastructure.
Lynch also explained that the move away from coal-fired power, and towards more renewable energy sources, means that certain parts of the country are increasingly relying on power that is coming from different places than it has in the past.
Areas in the Midwest that once relied on now mothballed coal plants located in the region may need power going forward from wind or solar facilities that are further west. That can force changes to the grid. "We have to rewire America,” Lynch said.
As coal-fired power plants in the U.S. have declined in recent years, natural gas has been on the rise as a source of fuel. Natural gas is expected to be the dominant fossil fuel source for power generation over the next 20 years or so, according to the ASCE report.
The report also notes that the U.S. Energy Information Administration projects that by around 2040 renewable energy sources will surpass natural gas power generation. In 2019, the report says, total renewable power generation exceeded coal-fueled generation for the first time.
State mandates to shift toward renewables are part of what’s driving the increased use of them. Reducing carbon emissions from burning fossil fuels is generally viewed as a key step in limiting the long-term costs associated with climate change, while also producing near-term environmental and health benefits by reducing air pollution.
But there are hurdles to making that transition. In California, a state with ambitious renewable energy targets, the state’s grid operator pointed to issues with renewable energy sources falling short of meeting demand at peak times as a contributor to the recent blackouts.
And updating the nation’s power facilities to rely on a different mix of fuels comes with a cost. Power generation is expected to account for about 65%, or $135 billion, of the investment gap described in the report through 2029.
Investments in infrastructure like transmission equipment, overhead wires and sensors have increased in recent years, the report says, but at levels that are short of what’s needed.
When it comes to upgrading power infrastructure so that it's more likely to hold up in severe weather, Lynch and others on a call ASCE held Tuesday noted a lack of requirements for equipment to be built back stronger after it is destroyed or damaged by a natural disaster.
"What better time to fix our infrastructure than when it's down," Lynch said.
Unlike roads or bridges, much, but not all, of the nation’s power grid is privately owned by for-profit utilities. But federal, state and local governments do regulate the sector in various ways.
Jim Hoecker, senior counsel and energy strategist with Husch Blackwell, and a former chairman of the Federal Energy Regulatory Commission, said a key role for the federal government and states would be to define policy objectives for electric infrastructure investments going forward.
He also said that states have a critical part to play in authorizing the construction of electric utility projects. “We need to encourage all the participants, all the governmental entities, to look up and try to imagine or envision where we need to be in 2039,” Hoecker said.
Bill Lucia is a senior reporter for Route Fifty and is based in Olympia, Washington.
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