Renewables are the future for energy, but they won't be cheap, experts who spoke to Colorado Springs Utilities planners said.
The daylong Trends and Technologies Symposium gave city officials a preview of what's on the horizon in the power industry as Utilities begins drafting its five-year energy plan for 2009 to 2014. Among the speakers was John Baker, chief strategy officer for Austin Energy, an industry leader in developing alternative energy.
Labeled in some circles the "clean energy capital," Austin, Texas' mix of energy sources is 27 percent nuclear, 37 percent gas, 30 percent coal and 6 percent renewables. By 2020, the city-owned agency wants 30 percent to come from renewables. Part of the formula will be reducing usage, achieved through measures such as stricter building codes that make homes, businesses and industrial plants more energyefficient, Baker said.
Austin provides rebates when customers install solar energy systems and energy-efficient appliances. Since the early 1980s, it's paid $22 million in rebates, which required customers to spend an additional $108 million, a boon for the local economy, Baker said.
The city's green building program, which advises how to construct buildings for lower energy use, "has been so popular that we are a consultant to other utilities and businesses," Baker said. Austin Energy customers are one reason the agency is moving ahead so rapidly, he said. They're willing to pay more for renewables - so much so, the program had to close when all the energy was spoken for.
When the program reopened in January, most of the available energy sold out within the first week to industrial companies, despite a price difference of 2 cents per kilowatt hour. Since 2004, 319 solar photovoltaic projects have been built, he said, keeping nine solar contractors busy. That lawmakers are considering carbon taxes on coal-fired plant emissions, and other regulatory measures forces utilities to find alternatives, Baker said.
He also noted that adding renewables doesn't change customer expectations.
"They expect near-perfect reliability," he said, "and they expect it at a low price." Springs Utilities, which is heavily reliant on coal to power its electric plants, had planned to build another coal plant within the next decade.
But in the past six months, City Council members have said they want to delay the plant or cut its size by supplementing with renewables or managing demand better.
Councilman Randy Purvis, who attended the session, said Colorado Springs customers are like Austin's - they've said on surveys they're willing to pay more for alternatives, such as wind. But so far, Springs Utilities has offered only a small amount of wind, about 1 megawatt, and sells it to customers who sign up to pay more.
"The other thing going forward is I think solar would work better here than in Texas," Purvis said. "There's been a lot of breakthroughs for photovoltaics, but can the system tolerate it, if you have users generating power and pushing it back onto the s stem?" He was referring to arrangements in which customers with solar panels that generate more than they use sell it back to their provider.
Morey Wolfson, utilities program manager with the governor's Energy Office, predicted Colorado is positioning itself to become a leader in renewables. Several wind farms have opened in Logan, Weld and Bent counties, making Colorado the sixth-largest state for wind-production capacity in the nation, he said. Also, a wind-turbine manufacturing plant will bring more than 600 jobs, Wolfson said.
PG&E Wildfire Lawsuit alleges utility negligence, inadequate infrastructure maintenance, and faulty transmission lines, as victims seek compensation. Regulators investigate the blaze, echoing class actions after Victoria's Black Saturday mega-fires and utility oversight failures.
Key Points
PG&E Wildfire Lawsuit alleges utility negligence and power line faults, seeking victim compensation amid investigations.
✅ Alleged failure to maintain transmission infrastructure
✅ Spark reports and regulator filings before blaze erupted
✅ Class action parallels with Australia's Black Saturday
Victims of California's most destructive wildfire have filed a lawsuit accusing Pacific Gas & Electric Co. of causing the massive blaze, a move that follows the utility's 2018 Camp Fire guilty plea in a separate case.
The suit filed on Tuesday in state court in California accuses the utility of failing to maintain its infrastructure and properly inspect and manage its power transmission lines, amid prior reports that power lines may have sparked fires in California.
The utility's president said earlier the company doesn't know what caused the fire, but is cooperating with the investigation by state agencies, and other utilities such as Southern California Edison have faced wildfire lawsuits in California.
PG&E told state regulators last week that it experienced a problem with a transmission line in the area of the fire just before the blaze erupted.
A landowner near where the blaze began said PG&E notified her the day before the wildfire that crews needed to come onto her property because some wires were sparking, and the company later promoted its wildfire assistance program for victims seeking aid.
A massive class action after Australia's last mega-fire, Victoria's Black Saturday in 2009, saw $688.5 million paid in compensation to thousands of claimants affected by the Kilmore-Kinglake and Murrindindi-Marysville fires, partly by electricity company SP Ausnet, and partly by government agencies, while in California PG&E's bankruptcy plan won support from wildfire victims addressing compensation claims.
California Net Zero Grid Investment will fuel electrification, renewable energy buildout, EV adoption, and grid modernization, boosting utilities, solar, and storage, while policy, IRA incentives, and transmission upgrades drive reliability and long-term rate base growth.
Key Points
Funding to electrify sectors and modernize the grid, scaling renewables, EVs, and storage to meet 2045 net zero goals.
✅ $370B over 22 years to meet 2045 net zero target
✅ Utilities lead gains via grid modernization and rate base growth
✅ EVs, solar, storage scale; IRA credits offset costs
$370 billion: That’s the investment Edison International CEO Pedro Pizarro says is needed for California’s power grid to meet the state’s “net zero” goal for CO2 emissions by 2045.
Getting there will require replacing fossil fuels with electricity in transportation, HVAC systems for buildings and industrial processes. Combined with population growth and data demand potentially augmented by artificial intelligence, that adds up to an 82 percent increase in electricity demand over 22 years, or 3 percent annually, and a potential looming shortage if buildout lags.
California’s plans also call for phasing out fossil fuel generation in the state, despite ongoing dependence on fossil power during peaks. And presumably, its last nuclear plant—PG&E Corp’s (PCG) Diablo Canyon—will be eventually be shuttered as well. So getting there also means trebling the state’s renewable energy generation and doubling usage of rooftop solar.
Assuming this investment is made, it’s relatively easy to put together a list of beneficiaries. Electric vehicles hit 20 percent market share in the state in Q2, even as pandemic-era demand shifts complicate load forecasting. And while competition from manufacturers has increased, leading manufacturers like Tesla TSLA -3% Inc (TSLA) can look forward to rising sales for some time—though that’s more than priced in for Elon Musk’s company at 65 times expected next 12 months earnings.
In the past year, California regulators have dialed back net metering through pricing changes affecting compensation, a subsidy previously paying rooftop solar owners premium prices for power sold back to the grid. That’s hit share prices of SunPower Corp (SPWR) and Sunrun Inc (RUN) quite hard, by further undermining business plans yet to demonstrate consistent profitability.
Nonetheless, these companies too can expect robust sales growth, as global prices for solar components drop and Inflation Reduction Act tax credits at least somewhat offset higher interest rates. And the combination of IRA tax credits and U.S. tariff walls will continue to boost sales at solar manufacturers like JinkoSolar Holding (JKS).
The surest, biggest beneficiaries of California’s drive to Net Zero are the utilities, reflecting broader utility trends in grid modernization, with investment increasing earnings and dividends. And as the state’s largest pure electric company, Edison has the clearest path.
Edison is currently requesting California regulators OK recovery over a 30-year period of $2.4 billion in losses related to 2017 wildfires. Assuming a amicable decision by early next year, management can then turn its attention to upgrading the grid. That investment is expected to generate long-term rate base growth of 8 percent at year, fueling 5 to 7 percent annual earnings growth through 2028 with commensurate dividend increases.
That’s a strong value proposition Edison stock, with trades at just 14 times expected next 12 months earnings. The yield of roughly 4.4 percent at current prices was increased 5.4 percent this year and is headed for a similar boost in December.
When California deregulated electricity in 1996, it required utilities with rare exceptions to divest their power generation. As a result, Edison’s growth opportunity is 100 percent upgrading its transmission and distribution grid. And its projects can typically be proposed, sited, permitted and built in less than a year, limiting risk of cost overruns to ensure regulatory approval and strong investment returns.
Edison’s investment plan is also pretty much immune to an unlikely backtracking on Net Zero goals by the state. And the company has a cost argument as well: Dr Pizarro cites U.S. Department of Energy and Department of Transportation data to project inflation-adjusted savings of 40 percent in California’s total customer energy bills from full electrification.
There’s even a reason to believe 40 percent savings will prove conservative. Mainly, gasoline currently accounts for a bit more than half energy expenditures. And after a more than 10-year global oil and gas investment drought, supplies are likely get tighter and prices possibly much higher in coming years.
Of course, those savings will only show up after significant investment is made. At this point, no major utility system in the world runs on 100 percent renewable energy, and California’s blackout politics underscore how reliability concerns shape deployment. And the magnitude of storage technology needed to overcome intermittency in solar and wind generation is not currently available let alone affordable, though both cost and efficiency are advancing.
Taking EVs from 20 to 100 percent of California’s new vehicle sales calls for a similar leap in efficiency and cost, even with generous federal and state subsidy. And while technology to fully electrify buildings and homes is there, economically retrofitting statewide is almost certainly going to be a slog.
At the end of the day, political will is likely to be as important as future technological advance for how much of Pizarro’s $370 billion actually gets spent. And the same will be true across the U.S., with state governments and regulators still by and large calling the shots for how electricity gets generated, transmitted and distributed—as well as who pays for it and how much, even as California’s exported policies influence Western markets.
Ironically, the one state where investors don’t need to worry about renewable energy’s prospects is one of the currently reddest politically. That’s Florida, where NextEra Energy NEE +2.8% (NEE) and other utilities can dramatically cut costs to customers and boost reliability by deploying solar and energy storage.
You won’t hear management asserting it can run the Sunshine State on 100 percent renewable energy, as utilities and regulators do in some of the bluer parts of the country. But by demonstrating the cost and reliability argument for solar deployment, NextEra is also making the case why its stock is America’s highest percentage bet on renewables’ growth—particularly at a time when all things energy are unfortunately becoming increasingly, intensely political.
ITER Nuclear Fusion advances tokamak magnetic confinement, heating deuterium-tritium plasma with superconducting magnets, targeting net energy gain, tritium breeding, and steam-turbine power, while complementing laser inertial confinement milestones for grid-scale electricity and 2025 startup goals.
Key Points
ITER Nuclear Fusion is a tokamak project confining D-T plasma with magnets to achieve net energy gain and clean power.
✅ Tokamak magnetic confinement with high-temp superconducting coils
✅ Deuterium-tritium fuel cycle with on-site tritium breeding
✅ Targets net energy gain and grid-scale, low-carbon electricity
It sounds like the stuff of dreams: a virtually limitless source of energy that doesn’t produce greenhouse gases or radioactive waste. That’s the promise of nuclear fusion, often described as the holy grail of clean energy by proponents, which for decades has been nothing more than a fantasy due to insurmountable technical challenges. But things are heating up in what has turned into a race to create what amounts to an artificial sun here on Earth, one that can provide power for our kettles, cars and light bulbs.
Today’s nuclear power plants create electricity through nuclear fission, in which atoms are split, with next-gen nuclear power exploring smaller, cheaper, safer designs that remain distinct from fusion. Nuclear fusion however, involves combining atomic nuclei to release energy. It’s the same reaction that’s taking place at the Sun’s core. But overcoming the natural repulsion between atomic nuclei and maintaining the right conditions for fusion to occur isn’t straightforward. And doing so in a way that produces more energy than the reaction consumes has been beyond the grasp of the finest minds in physics for decades.
But perhaps not for much longer. Some major technical challenges have been overcome in the past few years and governments around the world have been pouring money into fusion power research as part of a broader green industrial revolution under way in several regions. There are also over 20 private ventures in the UK, US, Europe, China and Australia vying to be the first to make fusion energy production a reality.
“People are saying, ‘If it really is the ultimate solution, let’s find out whether it works or not,’” says Dr Tim Luce, head of science and operation at the International Thermonuclear Experimental Reactor (ITER), being built in southeast France. ITER is the biggest throw of the fusion dice yet.
Its $22bn (£15.9bn) build cost is being met by the governments of two-thirds of the world’s population, including the EU, the US, China and Russia, at a time when Europe is losing nuclear power and needs energy, and when it’s fired up in 2025 it’ll be the world’s largest fusion reactor. If it works, ITER will transform fusion power from being the stuff of dreams into a viable energy source.
Constructing a nuclear fusion reactor ITER will be a tokamak reactor – thought to be the best hope for fusion power. Inside a tokamak, a gas, often a hydrogen isotope called deuterium, is subjected to intense heat and pressure, forcing electrons out of the atoms. This creates a plasma – a superheated, ionised gas – that has to be contained by intense magnetic fields.
The containment is vital, as no material on Earth could withstand the intense heat (100,000,000°C and above) that the plasma has to reach so that fusion can begin. It’s close to 10 times the heat at the Sun’s core, and temperatures like that are needed in a tokamak because the gravitational pressure within the Sun can’t be recreated.
When atomic nuclei do start to fuse, vast amounts of energy are released. While the experimental reactors currently in operation release that energy as heat, in a fusion reactor power plant, the heat would be used to produce steam that would drive turbines to generate electricity, even as some envision nuclear beyond electricity for industrial heat and fuels.
Tokamaks aren’t the only fusion reactors being tried. Another type of reactor uses lasers to heat and compress a hydrogen fuel to initiate fusion. In August 2021, one such device at the National Ignition Facility, at the Lawrence Livermore National Laboratory in California, generated 1.35 megajoules of energy. This record-breaking figure brings fusion power a step closer to net energy gain, but most hopes are still pinned on tokamak reactors rather than lasers.
In June 2021, China’s Experimental Advanced Superconducting Tokamak (EAST) reactor maintained a plasma for 101 seconds at 120,000,000°C. Before that, the record was 20 seconds. Ultimately, a fusion reactor would need to sustain the plasma indefinitely – or at least for eight-hour ‘pulses’ during periods of peak electricity demand.
A real game-changer for tokamaks has been the magnets used to produce the magnetic field. “We know how to make magnets that generate a very high magnetic field from copper or other kinds of metal, but you would pay a fortune for the electricity. It wouldn’t be a net energy gain from the plant,” says Luce.
One route for nuclear fusion is to use atoms of deuterium and tritium, both isotopes of hydrogen. They fuse under incredible heat and pressure, and the resulting products release energy as heat
The solution is to use high-temperature, superconducting magnets made from superconducting wire, or ‘tape’, that has no electrical resistance. These magnets can create intense magnetic fields and don’t lose energy as heat.
“High temperature superconductivity has been known about for 35 years. But the manufacturing capability to make tape in the lengths that would be required to make a reasonable fusion coil has just recently been developed,” says Luce. One of ITER’s magnets, the central solenoid, will produce a field of 13 tesla – 280,000 times Earth’s magnetic field.
The inner walls of ITER’s vacuum vessel, where the fusion will occur, will be lined with beryllium, a metal that won’t contaminate the plasma much if they touch. At the bottom is the divertor that will keep the temperature inside the reactor under control.
“The heat load on the divertor can be as large as in a rocket nozzle,” says Luce. “Rocket nozzles work because you can get into orbit within minutes and in space it’s really cold.” In a fusion reactor, a divertor would need to withstand this heat indefinitely and at ITER they’ll be testing one made out of tungsten.
Meanwhile, in the US, the National Spherical Torus Experiment – Upgrade (NSTX-U) fusion reactor will be fired up in the autumn of 2022, while efforts in advanced fission such as a mini-reactor design are also progressing. One of its priorities will be to see whether lining the reactor with lithium helps to keep the plasma stable.
Choosing a fuel Instead of just using deuterium as the fusion fuel, ITER will use deuterium mixed with tritium, another hydrogen isotope. The deuterium-tritium blend offers the best chance of getting significantly more power out than is put in. Proponents of fusion power say one reason the technology is safe is that the fuel needs to be constantly fed into the reactor to keep fusion happening, making a runaway reaction impossible.
Deuterium can be extracted from seawater, so there’s a virtually limitless supply of it. But only 20kg of tritium are thought to exist worldwide, so fusion power plants will have to produce it (ITER will develop technology to ‘breed’ tritium). While some radioactive waste will be produced in a fusion plant, it’ll have a lifetime of around 100 years, rather than the thousands of years from fission.
At the time of writing in September, researchers at the Joint European Torus (JET) fusion reactor in Oxfordshire were due to start their deuterium-tritium fusion reactions. “JET will help ITER prepare a choice of machine parameters to optimise the fusion power,” says Dr Joelle Mailloux, one of the scientific programme leaders at JET. These parameters will include finding the best combination of deuterium and tritium, and establishing how the current is increased in the magnets before fusion starts.
The groundwork laid down at JET should accelerate ITER’s efforts to accomplish net energy gain. ITER will produce ‘first plasma’ in December 2025 and be cranked up to full power over the following decade. Its plasma temperature will reach 150,000,000°C and its target is to produce 500 megawatts of fusion power for every 50 megawatts of input heating power.
“If ITER is successful, it’ll eliminate most, if not all, doubts about the science and liberate money for technology development,” says Luce. That technology development will be demonstration fusion power plants that actually produce electricity, where advanced reactors can build on decades of expertise. “ITER is opening the door and saying, yeah, this works – the science is there.”
BC Hydro drought operations address climate change impacts with hydropower scheduling, reservoir management, water conservation, inflow forecasting, and fish habitat protection across the Lower Mainland and Vancouver Island while maintaining electricity generation from storage facilities.
Key Points
BC Hydro drought operations conserve water, protect fish, and sustain hydropower during extended heat and low inflows.
✅ Reduced flows at Puntledge, Coquitlam, and Ruskin/Stave facilities.
✅ System relies on northern storage to maintain electricity supply.
BC Hydro is adjusting its operating plans around power generation as extended heat and little forecast rain continue to impact the province, a report says.
“Unpredictable weather patterns related to climate change are expected to continue in the years ahead and BC Hydro is constantly adapting to these evolving conditions, especially after events such as record demand in 2021 that tested the grid,” said the report, titled “Casting drought: How climate change is contributing to uncertain weather and how BC Hydro’s generation system is adapting.”
The study said there is no concern with BC Hydro being able to continue to deliver power through the drought because there is enough water at its larger facilities, even as issues like crypto mining electricity use draw scrutiny from observers.
Still, it said, with no meaningful precipitation in the forecast, its smaller facilities in the Lower Mainland and on Vancouver Island will continue to see record low or near record low inflows for this time of the year.
“In the Lower Mainland, inflows since the beginning of September are ranked in the bottom three compared to historical records,” the report said.
The report said the hydroelectric system is directly impacted by variations in weather and the record-setting, unseasonably dry and warm weather this fall highlights the impacts of climate change, while demand patterns can be counterintuitive, as electricity use even increased during Earth Hour 2018 in some areas, hinting at challenges to come.
It noted symptoms of climate change include increased frequency of extreme events like drought and intense storms, and rapid glacial melt.
“With the extremely hot and dry conditions, BC Hydro has been taking proactive steps at many of our South Coast facilities for months to conserve water to protect the downstream fish habit,” spokesperson Mora Scott said. “We began holding back water in July and August at some facilities anticipating the dry conditions to help ensure we would have water storage for the later summer and early fall salmon spawning.”
Scott said BC Hydro’s reservoirs play an important role in managing these difficult conditions by using storage and planning releases to provide protection to downstream river flows. The reservoirs are, in effect, a battery waiting to be used for power.
While the dry conditions have had an impact on BC Hydro’s watersheds, several unregulated natural river systems — not related to BC Hydro — have fared worse, with rivers drying up and thousands of fish killed, the report said.
BC Hydro is currently seeing the most significant impacts on operations at Puntledge and Campbell River on Vancouver Island as well as Coquitlam and Ruskin/Stave in the Lower Mainland.
To help manage water levels on Vancouver Island, BC Hydro reduced Puntledge River flows by one-third last week and on the Lower Mainland reduced flows at Coquitlam by one-third and Ruskin/Stave by one quarter.
However, the utility company said, there are no concerns about continued power delivery.
“British Columbians benefit from BC Hydro’s integrated, provincial electricity system, which helps send power across the province, including to Vancouver Island, and programs like the winter payment plan support customers during colder months,” staff said.
Most of the electricity generated and used in B.C. is produced by larger facilities in the north and southeast of the province — and while water levels in those areas are below normal levels, there is enough water to meet the province’s power needs, even as additions like Site C's electricity remain a subject of debate among observers.
The Glacier Media investigation found a quarter of BC Hydro's power comes from the Mica, Revelstoke and Hugh Keenleyside dams on the Columbia River. Some 29% comes from dams in the Peace region, including the under-construction Site C project that has faced cost overruns. At certain points of the year, those reservoirs are reliant on glacier water.
Still, BC Hydro remains optimistic.
Forecasts are currently showing little rain in the near-term; however, historically, precipitation and inflows show up by the end of October. If that does not happen, BC Hydro said it would continue to closely track weather and inflow forecasts to adapt its operations to protect fish, while regional cooperation such as bridging with Alberta remains part of broader policy discussions.
Among things BC Hydro said it is doing to adapt are:
Continuously working to improve its weather and inflow forecasting; Expanding its hydroclimate monitoring technology, including custom-made solutions that have been designed in-house, as well as upgrading snow survey stations to automated, real-time snow and climate stations, and; Investing in capital projects — like spillway gate replacements — that will increase resiliency of the system to climate change.
Hydro One COVID-19 Rate Relief responds to time-of-use pricing, peak rates, and Ontario Energy Board rules as residents stay home, offering a Pandemic Relief Fund, flexible payments, and support for electricity bills amid off-peak adjustments.
Key Points
Hydro One's COVID-19 rate relief includes payment flexibility and hardship aid to ease time-of-use bill burdens.
✅ Advocates flexibility on time-of-use and peak rate impacts
✅ Pandemic Relief Fund offers aid and payment options
✅ OEB sets prices; utilities relay concerns and support
Hydro One says it is listening to requests by self-isolating residents for reduced kilowatt hour peak rates during the day when most people are home riding out the COVID-19 pandemic.
Peak rates of 20.8 cents per kw/h are twice as high from 7 a.m. to 7 p.m. – except weekends – than off-peak rates of 10.1 cents per kw/h and set by the Ontario Energy Board and not electricity providers such as Hydro One and Elexicon (formerly Veridian).
Frustrated electrical customers have signed their John Henry’s more than 50,000 times to a change.org petition demanding Hydro One temporarily slash rates for those already struggling with work closures and loss of income amid concerns about a potential recovery rate that could raise bills.
Alex Stewart, media relations spokesman for Hydro One, said the corporation is working toward a solution.
“While we are regulated to adhere to time-of-use pricing by the Ontario Energy Board, we’ve heard the concerns about time-of-use pricing and the idea of a fixed COVID-19 hydro rate as many of our customers will stay home to stop the spread of COVID-19,” Stewart told The Intelligencer.
“We continue to advocate for greater choice during this difficult time and are working with everyone in the electricity sector to ensure our customers are heard.”
Stewart said the electricity provider is reaching out to customers to help them during a difficult self-isolating and social distancing period in other ways to bring financial relief.
For example, new hardship measures are now in play by Hydro One to give customers some relief from ballooning electricity bills.
“This is a difficult time for everyone. Hydro One has launched a new Pandemic Relief Fund to support customers affected by the novel coronavirus COVID-19. As part of our commitment to customers, we will offer financial assistance, as well as increased payment flexibility, to customers experiencing hardship,” Stewart said.
“Hydro One is also extending its Winter Relief program to halt disconnections and reconnections to customers experiencing hardship during the coldest months of the year. This is about doing the right thing and offering flexibility to our customers so they have peace of mind and can concentrate on what matters most – keeping their loved ones safe.”
Stewart said customers having difficult times can visit the company’s website for more details at www.HydroOne.com/ReliefFund.
Elexicon Energy, meanwhile, said earlier the former Veridian company is passing along concerns to the OEB but otherwise can’t lower the rates unless directed to do so, as occurred when the province set off-peak pricing temporarily.
Chris Mace, Elexicon corporate communications spokesperson, said, “We don’t have the authority to do that.
“The Ontario Energy Board sets the energy prices. This is in the Ministry of Energy’s hands. We at Elexicon, along with other local distribution companies (LDC), have shared this feedback with the ministry and OEB to come up with some sort of solution or alternative. But this is out of our hands. We can’t shift anything.”
He suggested residents can shift the use of higher-drawing electrical appliances to early morning before 7 or in the evening after 7 p.m. when ultra-low overnight rates may apply.
Families may want to be “mindful whether it be cooking or laundry and so on and holding off on doing those until off-peak hours take effect. We are hearing customers and we have passed along those concerns to the ministry and the OEB.”
Hydro One power tips
Certain electrical uses in the home consumer more power than others, as reflected in Ontario’s electricity cost allocation approach:
62 per cent goes to space heating 19 per cent goes to water heaters 13 per cent goes to appliances 2 per cent goes to space cooling
U.S. Grid Modernization is critical for renewable energy integration, EV adoption, climate resilience, and reliability, requiring transmission upgrades, inter-regional links, hardened substations, and smart grid investments to handle extreme weather and decarbonization targets.
Key Points
U.S. Grid Modernization upgrades power networks to improve reliability, integrate renewables, and support EV demand.
✅ $2T+ investment needed for transmission upgrades
After decades of struggle, the U.S. clean-energy business is booming, with soaring electric-car sales and fast growth in wind and solar power. That’s raising hopes for the fight against climate change.
All this progress, however, could be derailed, as the green revolution stalls without a massive overhaul of America’s antiquated electric infrastructure – a task some industry experts say requires more than $2 trillion. The current network of transmission wires, substations and transformers is decaying with age and underinvestment, a condition highlighted by catastrophic failures during increasingly frequent and severe weather events.
Power outages over the last six years have more than doubled in number compared to the previous six years, according to a Reuters examination of federal data. In the past two years, power systems have collapsed in Gulf Coast hurricanes, West Coast wildfires, Midwest heat waves and a Texas deep freeze and recurring Texas grid crisis risks, causing long and sometimes deadly outages.
Compounding the problem, the seven regional grid operators in the United States are underestimating the growing threat of severe weather caused by climate change, Reuters found in a review of more than 10,000 pages of regulatory documents and operators’ public disclosures. Their risk models, used to guide transmission-network investments, consider historical weather patterns extending as far back as the 1970s. None account for scientific research documenting today’s more extreme weather and how it can disrupt grid generation, transmission and fuel supplies simultaneously.
The decrepit power infrastructure of the world’s largest economy is among the biggest obstacles to expanding clean energy and combating climate change on the ambitious schedule laid out by U.S. President Joe Biden. His administration promises to eliminate or offset carbon emissions from the power sector by 2035 and from the entire U.S. economy by 2050. Such rapid clean-energy growth would pressure the nation’s grid in two ways: Widespread EV adoption will spark a huge surge in power demand; and increasing dependence on renewable power creates reliability problems on days with less sun or wind, as seen in Texas, where experts have outlined reliability improvements that address these challenges.
The U.S. transmission network has seen outages double in recent years amid more frequent and severe weather events, driven by climate change and a utility supply-chain crunch that slows critical repairs. The system needs a massive upgrade to handle expected growth in clean energy and electric cars.
“Competition from renewables is being strangled without adequate and necessary upgrades to the transmission network,” said Simon Mahan, executive director of the Southern Renewable Energy Association, which represents solar and wind companies.
The federal government, however, lacks the authority to push through the massive grid expansion and modernization needed to withstand wilder weather and accommodate EVs and renewable power. Under the current regulatory regime, and amid contentious electricity pricing proposals in recent years, the needed infrastructure investments are instead controlled by a Byzantine web of local, state and regional regulators who have strong political incentives to hold down spending, according to Reuters interviews with grid operators, federal and state regulators, and executives from utilities and construction firms.
“Competition from renewables is being strangled without adequate and necessary upgrades to the transmission network.”
Paying for major grid upgrades would require these regulators to sign off on rate increases likely to spark strong opposition from consumers and local and state politicians, who are keen to keep utility bills low. In addition, utility companies often fight investments in transmission-network improvements because they can result in new connections to other regional grids that could allow rival companies to compete on their turf, even as coal and nuclear disruptions raise brownout risks in some regions. With the advance of green energy, those inter-regional connections will become ever more essential to move power from far-flung solar and wind installations to population centers.
The power-sharing among states and regions with often conflicting interests makes it extremely challenging to coordinate any national strategy to modernize the grid, said Alison Silverstein, an independent industry consultant and former senior adviser to the U.S. Federal Energy Regulatory Commission (FERC).
“The politics are a freakin’ nightmare,” she said.
The FERC declined to comment for this story. FERC Commissioner Mark Christie, a Republican, acknowledged the limitations of the agency’s power over the U.S. grid in an April 21 agency meeting involving transmission planning and costs.
“We can’t force states to do anything,” Christie said.
The White House and Energy Department did not comment in response to detailed questions from Reuters on the Biden administration’s plans to tackle U.S. grid problems and their impact on green-energy expansion.
The administration said in an April news release that it plans to offer $2.5 billion in grants for grid-modernization projects as part of Biden’s $1 trillion infrastructure package, complementing a proposed clean electricity standard to accelerate decarbonization over the next decade. A modernized grid, the release said, is the “linchpin” of Biden’s clean-energy agenda.
