The devastating blackouts in Texas in February highlight the problems of the US electricity infrastructure.
It is aging, underfunded, and failed to cope with extremely high power demands during the winter months in recent years.
The US’s poor state of infrastructure will impede it from its ongoing energy transition, according to an Oilprice article.
Although the US is the wealthiest nation globally, it only ranks no. 13 when it comes to the quality of its infrastructure.
A new study from UC Berkeley and GridLab says that it will be economically feasible for the country if 90% of its grid is from renewable sources and only 10% from natural gas by 2035.
The problem is that although there is tremendous growth in renewable sources, the country’s electric grid cannot fully integrate it for energy use, which presents an excellent opportunity to boost uptake of renewable and an investment opportunity.
According to a Wood Mackenzie analysis, it would cost $4.5 trillion for the US to fully transition its electric grid to 100% renewable energy in the next ten years. The cost will cover everything from constructing infrastructure, operating new generation facilities, and investing in transmission and distribution infrastructure.
President Biden’s $2 trillion infrastructure plan won’t go that much far to cover the cost. Modernizing the grid will cost $300 billion per year, but the government’s yearly spending is only $150 billion, showing a considerable spending gap.
So how will the US pay to transition to its grid to renewable energy? According to the article, private investors will need to step up and invest in the country’s top and most hardworking renewable companies to build the next-generation grid.
These companies are expanding and consistently giving competitive dividend rates, so investing in them can be profitable for long-term investors.
The article mentions two companies: NextEra and Xcel Energy Inc. The former expands its high-voltage transmission lines for renewable energy across the states by developing new projects or acquisitions.
Through its subsidiaries, the company plans to install 30 million solar panels or 10,000 megawatts of solar capacity in Florida by 2030 and owns dozens of wind and solar projects around the country.
Xcel Energy Inc., a leading Minneapolis-based electricity and natural gas utility serving 3.6 million customers in multiple states. The company also operates nearly 9,000 megawatts for its wind and solar projects combined.
Like NextEra, it is a fast-growing investor-owned transmission system across ten states and plans to expand through 2025.
Utility companies increasing their investments in renewable energy and expanding infrastructure accommodate is a positive development in the fight against climate change.
Infrastructure expansion also brings many risks from natural hazards, increasing or shifting demands from consumers, rising cyber and physical security threats, aging, and so on.
Additionally, integrating renewable energy into existing grids makes the utility assets life cycle more complex, prompting companies to seek better tools and processes for asset management.