Getting From Point A To Point B: Why Fixing The Electric Grid Is Critical To Our Energy Future


Guest post by Marian Hopkins of Business Roundtable.

We hear a lot about renewable energy these days, especially emerging technologies like wind and solar. Most of us appreciate the potential these technologies hold for our energy future, and we understand the challenges they can bring in terms of cost and reliability. Yet, we often overlook one of the most important challenges in bringing renewable energy online - how to actually get the energy generated from a windmill to a television or refrigerator miles away.

That's where modernization and expansion of our electric grid comes in. As we outlined in our recent report, Unfinished Business: The Missing Elements of a Sustainable Energy and Climate Policy, our current grid is plagued by disjointed transmission planning processes and 20th century technology that hinders our ability to deliver electricity in a reliable way, much less handle an inflow of new renewable sources or electric cars.

It's becoming increasingly clear that federal policies to modernize the electric power grid are a critical step toward realizing the twin goals of increasing energy security and lowering GHG emissions. In fact, even small improvements in the grid can help lower energy bills by reducing wasted energy. With an updated grid, we can also focus on expanding to areas of our country where renewable resources like wind and sunlight are abundant.

The investments required to achieve an ambitious modernization and expansion of the grid are likely to be substantial. A study conducted by the American Wind Energy Association and Business Roundtable member American Electric Power concluded that nearly 20,000 miles of extra-high-voltage cable at a cost of $60 billion would be needed to allow wind energy to supply one-fifth of America's electricity by 2030. These costs are significant, to be sure, but they do not represent an insurmountable barrier. With supportive government policies and investments, there's no reason to think we can't meet this challenge. Tax incentives are already available for investments in smart-grid technologies, and the stimulus package provided an additional $4.5 billion.

Here's something else to think about - according to a study by Pike Research, a Colorado-based energy consulting company, worldwide spending on smart grid technology is set to total $200 billion over the next five years. It seems clear that strategies to improve electric grid technology will attract increasing international attention and investment over the coming years.

As I outlined in an earlier post, our nation has the choice to become a worldwide leader in energy innovation, if we seize the moment and take on the challenge. Our outdated electric grid - a system based on decades-old technology - can serve as a critical pathway for renewable energy and a vital conduit for new energy technologies, but only if we make the smart choices and critical investments now.