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America needs hundreds of billions of dollars in grid improvements – ASCE report

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America needs hundreds of billions of dollars in grid improvements – ASCE report

Unless hundreds of billions of dollars worth of additional investments are made in the U.S. grid in the next two decades, the country could experience significant power reliability issues amid the rapid shift toward renewable power in the West, Northeast and mid-Atlantic regions, according to a new report published by the American Society of Civil Engineers.

Power interruptions stemming from such a lack of investment could hit American households and businesses hard, requiring them to reach into their wallets to purchase back-up generators and replace spoiled food, the group said.

The investment gap may hit $208 billion by 2029 and widen to $338 billion by 2039, the society, or ASCE, said, basing its analysis on "household and business demand for electricity, the age of current infrastructure, evolving mix of energy technologies, and state and federal policies that mandate conversions to renewable energy sources."

Both the 2029 and 2039 gaps primarily are driven by a dearth of generation investment, which ASCE said accounts for 65% of the 2029 gap and 61% of the 2039 gap. While transmission investment will account for 12% of the gap by 2029, that figure will jump to 29% by 2039, the association predicted.

Distribution, however, will account for 23% of the gap by 2029 before falling to 10% by 2039.

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Not all states are equally responsible for the gap. Renewable energy targets in the West, Northeast and mid-Atlantic regions are "driving a need to develop renewable generation and the transmission infrastructure to support it," according to ASCE. The report said the Western states' needs alone account for 33% of the total investment gap, with 43% of the gap stemming from the necessity of replacing some of the "oldest infrastructure in the U.S." located in the Northeast and mid-Atlantic states.

In contrast, the Midwest, Southwest and Southeast regions will require significantly less in the way of generation, transmission and distribution investments through 2039, ASCE said.

"All of Florida's needs are in distribution infrastructure," ASCE said. "In the Southeast, modest generation and transmission investment are needed by 2029, and distribution will be needed to meet increasing population and business user demand."

Unless needed investments are made, ASCE warned, households and businesses alike may see "damage to electronics from voltage spikes and surges, spoiled food that would otherwise be refrigerated, and additional costs incurred by an increased reliance on, and use of, backup generators."

While an average household may see $13 in lost disposable income tied to the "inefficiencies in delivery of electric power" in 2020, the report said, that figure could swell to $563 by 2039 without the electricity infrastructure investments.

"Reliable electricity service is essential for every family, now more than ever. Even a momentary disruption of service is no longer acceptable," ASCE President K.N. Gunalan in a Sept. 1 news release. According to that release, overall transmission investments have increased from $15.6 billion in 2012 to an "actual and planned annual average" of $21 billion between 2013 and 2021. "The electric sector is moving in a positive direction overall, however, significant investments must be made to keep our grids secure and resilient for the future," ASCE added.

Businesses will have to worry about lost productivity and labor problems if workers simply cannot do their jobs without the power flowing and the lights on, the group said. Moreover, surging electricity reliability concerns could dent the competitiveness of American manufactured goods. ASCE estimated that "between 2020 and 2039, U.S. businesses will lose $271 billion in the value of its exports, while businesses and households will pay an additional $142 billion for foreign imports," if voltage surges and outages disrupt production lines.

And in an economy in which many businesses increasingly contract with data centers to house unprecedented volumes of digitized information, power interruptions at those data centers alone could represent billions in losses, ASCE said. The average cost of an outage at a data center, according to the report, "increased from $505,000 in 2010 to $740,000 in 2016," or about "$8,851 per minute the electricity grid is malfunctioning."

The report — "Failure To Act: Electric Infrastructure Investment Gaps in a Rapidly Changing Environment" — acknowledged that all of the underlying assumptions were based on prepandemic data.