Idea of the Day: Rewiring the Electrical Grid

The electricity grid is the most egregious example of the consequences of underinvestment. The Electric Power Research Institute estimates that electricity disruptions cost the economy $100 billion a year in damages and lost business. And our current electricity distribution system is the equivalent of a phonograph—utilizing technology that was invented during the time of Thomas Edison. We need to rewire the grid and overlay it with a new generation of information technology and “smart” components to increase its performance, efficiency, resilience, and security.

What’s more, the bulk of our utility-scale renewable resources are located in remote areas of the country, far from the population and industrial centers where electricity demand is greatest. We will need to extend the high-voltage backbone of the transmission grid to provide access to these wind, solar, geothermal, and hydroelectric resources and bring them on-line. Rewiring the transmission grid can be done primarily through private investments, but will require a series of public policy fixes, including:

• Resolving the gridlock over planning, siting, and cost allocation.
• Providing incentives for the deployment of “smart grid” components.
• Taking measures to increase the physical and cybersecurity of the grid.
• Providing the conditions necessary to ensure that new grid investments help lower emissions from the electricity sector.

ACES includes a sparse transmission grid title, but it was intended as a placeholder in the legislation while some of the policy details are ironed out. The benefits that a smart grid would provide the nation are enormous—akin to building a national superhighway for clean electricity.

For more on this topic, please see:

• The Clean-Energy Investment Agenda, by John Podesta, Kate Gordon, Bracken Hendricks, and Benjamin Goldstein.