The nation’s energy sector is racing through a period of major transformation, and utilities are jumping on for the ride. According to a recent study, the U.S. electric power industry is investing billions of dollars in smarter energy infrastructure.

“Grid Modernization Technologies: Key Drivers of a Smarter Energy Future,” a white paper released in May by the Edison Foundation Institute for Electric Innovation, highlights how and why electric companies are using advanced technology to modernize and improve efficiencies of operation.


In 2016, investor-owned electric companies poured about $53 billion in the energy grid. Of that total, $21 billion was spent on the transmission grid and $32 billion on the distribution grid. This money is being spent in different ways, but the investment by utilities can be assigned to one of three broadly defined motives, including enhanced resiliency, reliability and security on the grid; integrated and managed distributed energy resources (DERs); and improved grid efficiency and optimization.


These investments help utilities achieve a number of operational objectives, including electric-grid optimization, optimized power quality and power flow, data systems integration, grid visibility and diagnostics, automated outage management and service restoration, and the integration and management of distributed energy resources.


The technologies that utilities are targeting for investment can also be grouped into three broadly defined categories. According to the white paper, utilities are investing in advanced metering infrastructure (AMI) or smart meters, power-flow-management technologies, and distribution automation and outage management technologies.


Data analytics is also a common thread among nearly all of the digital-grid-modernization technologies addressed in the paper. Electric companies are just beginning to put the massive amounts of data available from an increasingly digital grid to work.


The paper concludes that the U.S. electric power industry is investing more than $100 billion annually in smarter energy infrastructure and cleaner generating assets, and that this trend will continue. It adds that electric companies, technology providers, regulators, policymakers, governments, consumer advocates, venture firms, and other private investors must make a shared commitment to understand and support the continued advancement toward greater grid modernization.