Unlocking America’s Power Grid: The Affordable Path to Enhanced Energy Capacity

The Cheapest Way to Supercharge America’s Power Grid

US electricity consumption is increasing at an unprecedented rate, fueled by the growth of data centers, a revival in manufacturing, and the rising popularity of electric vehicles. To accommodate this surge, we need to rapidly expand our capacity for renewable energy generation through wind turbines, solar farms, and other power plants. This expansion also necessitates an extensive network of transmission lines to connect these facilities to the grid.

However, a significant challenge remains: obtaining permits for new transmission lines is both costly and time-consuming. This bottleneck has become one of the largest barriers to bringing new electricity generation online, leading to reduced investments in new power plants and leaving many projects languishing in lengthy “interconnection queues” as they wait to join the grid.

Fortunately, there are effective solutions that can enhance the capacity of the existing grid without the need for entirely new infrastructure. Advanced transmission technologies (ATTs) are a suite of hardware and software tools that can increase both the capacity and efficiency of the power sector. These technologies have the potential to significantly reduce the time required for grid upgrades, bypass complex permitting processes, and generate billions in annual savings for US consumers. They could also facilitate the rapid deployment of a substantial portion of the nearly 2,600 gigawatts of backlogged generation and storage projects awaiting connections to the electric grid.

Leveraging advanced transmission technologies to transform electricity delivery and consumption in America is akin to finding a $20 bill on the sidewalk—an opportunity that policymakers cannot afford to overlook. Promoting the development and implementation of these technologies should be a top priority for politicians and electricity market regulators across the country.

ATTs can be classified into four main categories:
1. Dynamic line ratings, which utilize local weather forecasts and real-time measurements to safely enhance the capacity of transmission lines when conditions permit.
2. High-performance conductors, advanced wires made from carbon fiber, composite materials, or superconductors that can carry more electricity than traditional steel-core conductors.
3. Topology optimization, which employs software to model changing conditions across the grid, identifying the most efficient routes for electricity distribution in real time.
4. Advanced power flow control devices, which redistribute electricity to lines with available capacity.

These innovations allow utilities to earn profits by saving money rather than just spending it, potentially saving consumers billions on their electricity bills annually. Countries such as Belgium, India, and the United Kingdom have already adopted these technologies on a large scale, and initial projects in the United States have also shown remarkable success. For instance, a recent deployment of dynamic line ratings increased capacity by over 50% at a cost of just $45,000 per mile—about 1% of the expense involved in constructing new transmission lines.

Despite this potential, investment and deployment of ATTs in the US have not surged as expected. The outdated structure of the nation’s electricity markets discourages the adoption of these 21st-century solutions. Under the current regulatory framework, utilities typically profit by passing the costs of large new developments onto consumers, resulting in higher electricity rates approved by local public utility commissions. Consequently, utilities are incentivized to make substantial investments rather than seek cost-saving measures.

When ATTs are used instead of constructing new transmission capacity, the lower capital costs result in reduced profits for utilities. For example, a utility might earn $600,000 annually after building a new mile of transmission, compared to approximately $4,500 per mile after installing the necessary equipment and software for line ratings. Although state regulatory agencies are meant to ensure that utilities act in the best interests of consumers, they often lack the information needed to determine the most effective approaches.

Addressing these structural barriers will require coordinated action from both state and federal governments, appealing to both Democrats and Republicans. Some states, such as Minnesota and Montana, have begun to move in this direction, but existing policy interventions remain insufficient.

To unlock the full potential of these technologies, we propose a new approach. First, transmission providers should be mandated to implement ATTs in certain “no regrets” scenarios, where the risks are minimal or nonexistent. The Federal Energy Regulatory Commission (FERC) is already considering requiring dynamic line ratings on particularly congested lines. Given their low cost and clear advantages in congested situations, we believe FERC should expedite and strengthen such regulations.

Additionally, the Department of Energy or Congress should establish efficiency standards for the transmission wires that carry electricity nationwide, as approximately 5% of generated electricity is lost during transmission and distribution. Utilizing high-performance conductors could reduce these losses by 30%.

Federal agencies and state legislators should also require transmission providers to assess the feasibility of using ATTs on their grids or provide the necessary support. FERC has recently made strides in this direction and should continue to enhance these initiatives. Furthermore, regulators should offer financial incentives to encourage transmission providers to adopt ATTs. A promising strategy could involve a “shared savings” incentive, as proposed in the recent Advancing GETS Act, allowing utilities to profit from saving money rather than just incurring expenses—potentially resulting in significant savings for consumers.

Finally, investments should be made in developing digital tools that enable transmission owners to identify opportunities for these technologies and hold regulators accountable. Creating these systems will necessitate that transmission providers share information regarding electricity supply, demand, and grid infrastructure. Ideally, with this data, researchers can create a “digital twin” of the current transmission system to test different ATT configurations and enhance grid performance and efficiency.

While difficult policy trade-offs are often unavoidable, regulations that facilitate the use of ATTs can swiftly expand the grid and reduce costs for consumers. This should garner support from both sides of the political spectrum.

Brian Deese is an innovation fellow at the Massachusetts Institute of Technology and served as director of the White House National Economic Council from 2021 to 2023. Rob Gramlich is the founder and president of Grid Strategies and served as an economic advisor to the chairman of the Federal Energy Regulatory Commission during the George W. Bush administration.