Reviving the economy should start with the US power grid
Spurring economic growth during a global pandemic isn’t an easy task. But there is one clear way to drive new investment in America while also positioning the country for future global economic competitiveness and an effective climate response: an expanded and upgraded electricity transmission grid.
It’s no secret that America’s economy relies on low-cost, reliable power to run. Yet the American Society of Civil Engineers gives a D+ grade to the upkeep of our electricity system, noting that “without greater attention to aging equipment, capacity bottlenecks, and increased demand, as well as increasing storm and climate impacts, Americans will likely experience longer and more frequent power interruptions.” Once a global model, our transmission system is now outdated and balkanized. While China and European countries invest in modern new grid infrastructure, we rely on a grid that fails to fully deploy readily available advanced grid technologies.
Building a new transmission infrastructure would create a stronger, better networked and more efficient economy, much as the construction of the interstate highway system provided the backbone for over five decades of U.S. economic growth by better linking businesses, customers and supply chains. Reforming our nation’s transmission planning and cost allocation processes could enable more interregional lines to deliver power where it’s needed, and allow grid operators to more easily, effectively and affordably balance power supply. Such steps are critically important when we consider that the country’s cleanest, lowest-cost new power sources are often found in more remote areas. In fact, the 15 states between the Rockies and the Mississippi River account for 88 percent of the country’s wind potential and 56 percent of the country’s utility-scale solar potential but are home to only 30 percent of projected 2050 electricity demand.
It’s time for Congress, governors, and other elected and appointed leaders to embrace the need for a Macro Grid that delivers the affordable, pollution-free electricity consumers and businesses are demanding. An advanced Macro Grid will help us compete with Asian and European countries that have already built high-voltage long distance lines deploying 21st century grid technologies and will also enable the integration of higher levels of renewable power. As the costs of wind and solar energy continue to decline precipitously, a Macro Grid will ensure we are taking proper advantage of our nation’s world-class domestic renewable resources. Any serious infrastructure effort from Congress should enable major investment toward this end, which is as central to prosperity as our roads and water systems.
A Macro Grid would also help ensure a secure platform to grow the high-tech U.S. economy of tomorrow, enabling the grid to better respond to demand changes and unforeseen complications. Improving the resilience and security of our grid will become increasingly important in the years ahead, and the ability to transport low-cost power over long distances is critical to achieving the clean grid of the future.
The good news is that we can take significant steps toward the grid of the future while benefitting businesses and households today. In fact, we’ll be saving money. New and upgraded transmission lines deliver benefits that far exceed their cost by reducing power losses and congestion — and moving lower-cost electricity to high-demand areas. For example, the Midwest grid operator found that a portfolio of nearly completed transmission lines will deliver up to $52.6 billion in net benefits over the next 20 to 40 years. Similarly, increased transmission development at the “seams” between regions could save consumers up to $47 billion a year and return more than $2.50 for every dollar invested, according to a recent federal study.
Those savings are possible because wind and solar energy are cost-competitive with natural gas and far cheaper than coal in most of the country. And renewable power costs continue to decline each year. Wind power is today 70 percent cheaper than a decade ago, while solar power costs have decreased 90 percent over the same period. Foregoing transmission investments is penny wise and pound foolish because spending a little on transmission allows access to low-cost generation, which is the much more expensive part of our electric bills. And, unlike fossil fuels, renewable power costs are fully predictable and not subject to the gyrations and price spikes of global energy markets.
In short, few inputs are more important than energy in determining the competitiveness of the American economy. By unlocking our lowest-cost domestic energy resources through an advanced Macro Grid, we can come out of this crisis well-positioned for a more secure, prosperous and vibrant future.
Gregory Wetstone is President and CEO of the American Council on Renewable Energy, a national nonprofit that unites finance, policy and technology to accelerate the transition to a renewable energy economy. Rob Gramlich is the Executive Director of Americans for a Clean Energy Grid, a non-profit broad-based public interest advocacy coalition focused on the need to expand, integrate, and modernize the North American high-voltage grid.
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