The Next Engineering Marvel: Power infrastructure upgrade plans and funding

By Claire Swedberg | Mar 15, 2023
Getty images / LuckyStep48

Construction of the vast U.S. electric power grid was an engineering marvel. In fact, the U.S. National Academy of Engineering recognized it as the 20th century’s most important achievement. 

Construction of the vast U.S. electric power grid was an engineering marvel. In fact, the U.S. National Academy of Engineering recognized it as the 20th century’s most important achievement. 

Today, this infrastructure requires an extensive upgrade. With a historic amount of federal funding in place and constituents eyeing solutions, the questions are what projects will look like, where they will take place and how soon.

Currently, the grid is operated with a diminished set of shock absorbers in a changing world, said Massoud Amin, president of Energy Policy & Security (EPS) Associates, and professor of electrical and computer engineering at the University of Minnesota. The grid faces growing vulnerabilities and challenges unless upgrades take place.

Modernizing, augmenting, expanding or replacing parts of the electric power system has been underway and over time may become one of the United States’ most extensive projects in this century. 

Attention is on all three principal components of the nation’s electric system: generation, high-voltage transmission and distribution to customers. The challenge is how to maintain or replace the aging infrastructure, given the diverse set of owners, operators and financing mechanisms. There are few parts of the massive projects ahead that will not be touched by ECs.

The Infrastructure Investment and Jobs Act will be providing funding for some of the projects, which could include expanding access to renewable energy sources such as wind and solar, upgrades to power lines to improve efficiency, reliability and resilience, as well as modernization of natural gas pipelines and investment in energy storage technologies.

The Department of Energy (DOE) opened its Grid Deployment Office (GDO) to help direct funding to projects and has been accepting applications, with plans of awarding funds for this summer. The agency sees some looming challenges the funding will address. For instance, the aging infrastructure itself will need upgrades no matter what—over 70% of transformers for transmission and distribution systems are over 25 years old, according to the agency. 

Then there’s an increased threat from extreme weather, including West Coast wildfires, record freezes, tornadoes, hurricanes and flooding. Such severe weather events are only likely to continue occurring. Physical threats and growing electricity demands are other concerns. The DOE expects transmission will be expanded by 60% by 2030 and perhaps even tripled by 2050.

“Through the Bipartisan Infrastructure Law and the Inflation Reduction Act, GDO has $26 billion in funding to support the modernization and expansion of America’s critical transmission and distribution systems,” said Maria Robinson, DOE’s GDO director. “We’re getting money out the door as quickly as possible, and we must focus on both short-term and long-term goals.” 

But identifying projects and getting them underway will require the participation of a range of stakeholders such as electric utilities, government agencies, communities and power sector entities, including electrical contractors, to ensure a resilient power grid in the face of extreme weather conditions, Amin said.

Planning with pragmatism

Of course, infrastructure is always aging and in need of upgrades, additions and repairs. Beyond these traditional drivers of transmission investment, today's grid also faces a changing resource mix, particularly the growth of renewable generation such as wind and solar. Those changes are likely to require new transmission, said John McCaffrey, senior regulatory counsel at the American Public Power Association (APPA), as those resources are not necessarily going to be in the same place that energy generation has been, historically.

Rules related to planning (and paying for) some of the transmission upgrades are being considered by the Federal Energy Regulatory Commission (FERC), which regulates electricity and other energy industries. FERC has authority over interstate wholesale electric transmission rates, the processes used to plan large-scale transmission lines and the rules governing who pays for the new lines. 

“FERC is really where a lot of this is happening,” McCaffrey said. 

So FERC’s planning is being closely watched by constituents. 

“A major concern of our members [primarily utility distributors] is rising transmission costs. Our members pay a lot of these transmission costs—so we do think that transmission needs to be planned in a really cost-effective way, and it really needs to focus on serving customers,” he said.

When it comes to new transmission to accommodate the growth of renewables, for instance, “I think the industry consensus is ‘yes, but we have to do that in an intelligent way, in a way that’s cost effective for the consumer,’” McCaffrey said.

The pragmatic approach would then be to identify what consumers’ needs are first and then build transmission to accommodate them.

APPA’s position toward planning for longer-range projects is encouragement for FERC to allow for regional flexibility and permit stakeholders to decide what works best for their region. Already, some regions have started to modify their transmission planning regimes in response to the changing resource mix and other factors. 

Another debate is over planning large lines that span between regional transmission organizations, independent service operators or other regions. These interregional high-voltage lines can serve as the backbone for local power systems, but not many have been planned and built in recent years. FERC is also exploring requiring a certain minimum level of transmission transfer capacity between regions, which could drive additional transmission investment.

Supply chain challenges and grid projects

The reality of project timing and scope also depends on the supply chain. According to Corry Marshall, APPA senior director, the supply chain of important grid components is strained, including for distribution transformers.

Utilities are already challenged to meet requirements for line work projects. 

“With supply chain constraints, we have enough in our stocks to take care of our current service territories,” he said, but most supplies are being consumed in existing projects and repairs. 

One example occurred last year when Hurricane Ian rolled through Florida, requiring major restoration efforts that resulted in an uncomfortable scenario of low supplies that might not be sufficient if another storm passed through.

Shortages, in part, result from limited material options. There's only one source of grain-oriented electric steel (a material used in distribution transformers) operating in the United States, for instance. 

While China is among the biggest producers of distribution transformers, geopolitical strains are putting pressure on domestic purchasing. The power system is critical infrastructure with national security implications, Marshall said. 

“It's an international crisis. We have a problem here domestically, for sure— lead times for these products are long and, in some cases, projects are delayed or canceled,” he said.

Despite that, the industry must be ready for what is coming. “The expectation is that there's going to be sustained, if not continued, growth in transmission development,” Marshall said.

Adding resiliency

Electrical networks must address the question of resiliency. A few regions are already moving ahead with some of FERC's proposed changes. The goals to address these challenges are ambitious, including creating a green electric power supply, increasing energy efficiency, improving cyber and physical security while expanding nuclear power generation and renewable sources, and capturing carbon emissions from fossil power plants, Amin said. 

Some of the emerging technologies will include storage systems, microgrids and advanced controls for communication. Those technologies continue to develop at a relatively rapid speed. For instance, nearly all utilities now see microgrids as an important business opportunity, Amin said.

The expectation is that projects in the coming years are likely to be regional and take place in stages as challenges are overcome. 

“The U.S. energy infrastructure is such a huge ship, a humongous ship with small rudders and even smaller trim tabs,” Amin said. “To really bring modernization and change is gradual as it would be with any major complicated infrastructure.”

Still, the advantages far outweigh the challenges, and he is optimistic about the work ahead. 

“Performance, reliability, emissions and outage reduction are some of the traditional methods that we have used” to measure beneficial impacts, he said. However, Amin takes it a step further, pointing out the job creation and economic growth that will result from many projects. These will include hiring more lineworkers, management and supporting staff. 

Amin briefed Congress on aging infrastructure, modernization options, security and resilience several times between 2003–2017. A 2015 briefing, while he was chairman of the IEEE Smart Grid, was based on the IEEE Quadrennial Energy Review.

Getty Images / LuckyStep48

Getty Images / LuckyStep48

“Put simply, we must decide whether to build power and energy infrastructures that support a 21st century’s secure digital society or be left behind as a 20th century relic,” he said. 

That warning remains as relevant today as it was then.

He pointed to smart grid technology and self-healing systems that offer a means of monitoring asset conditions in the first case, and a way to fix them in the latter case. By using sensors and wireless connectivity, users can receive notifications if equipment needs repair or replacement, potentially before a power failure, or have the system self-heal. Such systems aren’t cheap, but they are not wasted money, Amin argued. 

“It’s a return on investment typically within one to four years,” he said.

Progress is slow but steady, and it’s taking place around the globe. Some countries with a less complex network and fewer constituents can act faster than those in the United States, and their results can also help tell the story of how infrastructure modernization works in the real world.

“They offer lessons that hopefully we can learn from,” Amin said. “We have passed the beginning, we are actually at the next ramp-up stage,” he said. 

All the work depends on innovation and support from contractors and lineworkers. 

“A strong workforce is crucial to our success,” Robinson said. “We can’t build a more reliable, resilient and affordable grid without the people in communities committed to making the vision a reality.” 

Header image: Getty Images / LuckyStep48

About The Author

SWEDBERG is a freelance writer based in western Washington. She can be reached at [email protected].





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