Investment in Transmission Upgrades Continues to Grow

If we build it, the power will come. This appears to be the mantra for U.S. electric utilities, which continue to pour more money into transmission upgrades.

For a nation whose growing populace has become increasingly dependent on electricity to live, conduct business and connect to the digital age, more generating capacity is only the first part of the equation. The good news is that utilities have done their math. While their capital spending has risen over the past decade, the share of that expense dedicated to electric transmission projects has also increased.

According to a report released in April by the global ratings agency, Fitch Ratings, investment by utilities in transmission projects has more than doubled from 2000 to 2010. Members of the Edison Electric Institute (EEI), the association of U.S. shareholder-owned electric companies, invested $68.5 billion in transmission infrastructure improvements during the decade and are expected to spend another $23.3 billion over the next two years.

The growth in spending is a reflection of multiple trends. As the demand for power grows, so too does the need to deliver it. The existing transmission infrastructure has proven in many instances to be antiquated. More specifically, utilities want to avoid another blackout like the one that crippled the Northeast in 2003.

There is another force at work, which should please an Obama administration that has pinned much of its recovery effort on jumpstarting the renewable-power industry. If the growth in spending on transmission improvements is any indication, the strategy is catching on.
Fitch noted that while renewable energy now accounts for approximately 9 percent of total electricity produced in the United States, the Energy Information Administration projects that it will nearly double this market share by 2035. With more renewable-power generation, there is an increasing demand for a transmission system that can accommodate it. The Environmental and Energy Study Institute, a research group formed by Congress, noted that the transmission needs of conventional energy are significantly different from the needs of renewable power. While the former is produced by fuel sources that are easily stored and used on demand, the latter is intermittent and requires a transmission infrastructure that is much more reliable and efficient.

Here, too, utilities are making the change. The Fitch report, “Transmission Investment Continues to Rise,” states that there are 33 large-scale transmission projects to support renewable resources now in advanced stages of planning and development, representing a total investment of about $21 billion.

About the Author

Rick Laezman

Freelance Writer
Rick Laezman is a Los Angeles-based freelancer writer. He has a passion for renewable power. He may be reached at .

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