The Biden Administration has further propelled its push to upgrade and expand aging U.S. transmission infrastructure, announcing a new link with 21 states—termed the Federal-State Modern Grid Deployment Initiative—as an "unprecedented" effort to accelerate power distribution network upgrades slowed by politics and technology shortfalls that have hobbled clean energy capacity growth.

The effort comes as new reports show recent and growing power demand from large-scale loads—including data centers and artificial intelligence (AI) and future expansion of hydrogen fuel production. The Electric Power Research Institute (EPRI), the power sector research nonprofit, on May 28 warned that data centers alone could consume up to 9% of total U.S. electricity generation by 2030—“more than double the amount currently used,” it said, noting even more surge from artificial intelligence use.

The transmission effort was unveiled last month at an administration “summit” with governors, regulators, utilities, labor unions and industry leaders "to explore innovative policy solutions to unlock the deployment of modern grid technologies and share best practices," said a White House statement. "We cannot do this alone," said U.S. Energy Secretary Jennifer Granholm, who called the U.S. power grid the "largest machine in the world."

According to the White House, the country is on track to build more new electric generation capacity in 2024 than it has in 20 years, 96% of which will be clean energy.

“Grid stakeholders are increasingly looking for opportunities to meet those objectives, while facing a variety of challenges, including projected load growth, line congestion, interconnection delays, siting and permitting, variability in power prices for consumers, integration of new grid-enhancing technologies and more reliability risks from extreme weather events,” the White House statement noted. The administration called for “more dynamic approaches to power system management … to keep pace with the scale of changes happening across the country.”

The grid connection backlog surged 30% in 2023 to nearly 2,600 GW—95% of which is solar, battery storage and wind energy, said a report by the U.S. Energy Dept.'s Lawrence Berkeley National Lab. “Active capacity in U.S. interconnection queues increased nearly eight-fold over the last decade and is now more than twice the total installed capacity of the existing U.S. power plant fleet,” the lab said. “Large backlogs, wait times and withdrawal rates in the queues suggest persistent interconnection and transmission challenges and highlight the need to improve institutional processes, some examples of which are underway.”

States so far committed to the “holistic energy strategy” effort—all led by Democratic governors—are Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Washington and Wisconsin.

Grid-Enhancing Technologies

Under the new effort, the U.S. government and states will explore steps to accelerate near-term deployment of more advanced commercially available grid technologies to expand power capabilities on new and existing transmission lines. It also would boost state, federal and grid operator cooperation for both intra-regional and inter-regional transmission planning—with all entities pledged to “work collaboratively with solution providers, industry, labor organizers and trusted validators to build a diverse workforce.”

But with states' differing grid challenges, priorities and opportunities, the pact allows them “to explore executive and legislative remedies” to meet capacity challenges, enable use of advanced technologies, maximize federal support and share insights across state lines. The flexible approach seeks to enable each state to tailor strategies to unique circumstances, the White House said.

While grid-enhancing technologies are seen as a strategy to prolong existing transmission networks, a Rocky Mountain Institute analysis said they also could save project developers hundreds of millions of dollars in interconnection costs compared to default network upgrades, with project-level savings being “the difference” that allows a developer to build a clean energy project. The study says grid-enhancing technologies can also be installed more quickly than other network upgrades. 

East Coast-Midwest grid operator PJM said it expects energy use in its 13-state footprint will increase nearly 40% by 2039, from 800 TWh to about 1,100 TWh. Overall, U.S. grid planners forecast peak demand growth of 38 GW through 2028, requiring rapid planning and construction of new generation and transmission, noted consulting group Grid Strategies in December 2023. But, it warned: “This is likely an underestimate.”

Among other recent federal moves to boost transmission, DOE on May 8 identified 10 preliminary National Interest Electric Transmission Corridors for the first time in the U.S. since 2007, when two designated then were vacated by a federal appeals court four years later. If finalized, the new preliminary corridors would have priority federal support, and streamlined permitting and full authority to site new line if states have not acted. Comment on the new corridors is open until June 24. Final designations may be issued next year, although DOE said that time frame is unclear pending the extent of environmental reviews.

Virginia-based Dominion Energy, with demand load set to double in the next 15 years, sees new technologies offering “operational flexibility and dynamic capabilities,” Matthew Gardner, vice president of transmission, told the White House summit. “We’re focusing on squeezing every amp that we possibly can out of the existing lines we have, as well as designing new transmission infrastructure in a way that maximizes capacity,” he said. Dominion has installed 800 miles of “high temperature low sag” conductors, which have about 50% more capacity than the lines they replaced.

Dominion will deploy what Gardner termed the world’s largest dynamic line rating project as part of a $33.7 million grant from DOE’s $10.5-billion Grid Resilience and Innovation Partnerships program, adding the technology to some 25 power lines. The Biden administration last year announced awards of up to $3.4 billion under that program for up to 58 grid enhancement projects in 44 states. 

Virginia Republican Gov. Glenn Youngkin in April signed legislation that requires state utilities to include a value assessment of grid enhancing technology in their long-term planning, said utility trade group Advanced Energy United, adding that the Minnesota legislature last month also passed a similar bill.

As advancements in technology and infrastructure continue to evolve, "so does our approach to training members," said Danielle Eckert, IBEW director of government affairs. 

Power Surge

Meanwhile, industry participants and observers are watching how data center construction and AI further change the power equation.

AI queries require about 10 times more power than traditional internet searches, with generation of original music, photos and videos requiring more, said EPRI. It outlined potential growth rates in annual electricity consumption in U.S. data centers from 2023 to 2030 ranging from 4.6% to 9.1%.

Data centers are set to drive more than one-third of what a Goldman Sachs analysis projects will be a 2.4% compound annual growth rate of U.S. power demand through 2030, with a 60%-40% split between gas and renewable energy supply in new infrastructure. Global power consumption from data centers was about 460 TWh in 2022 and could double by 2026 to more than 1,000 TWh, said a Morningstar analysis. Goldman Sachs predicts AI demands will require almost $1 trillion in renewable energy investment in the U.S. and Europe through the mid 2030s.

Future gigawatt-scale data center "power parks" could be a key potential supply market for GE Vernova technology in meeting future AI-propelled energy needs, CEO Scott Strazik told an analysts group on May 30. “There's clearly a race to gain access to more power, and it's power that's needed at scale,” he said. Strazik said gas with potential for future decarbonization is best for meeting near-term  demand, followed by wind power and small modular nuclear reactors to meet clean energy ambitions, based on environmental conditions and future grid capacity. 

"The U.S. electricity sector is working hard to meet the growing demands of data centers, transportation electrification, crypto-mining and industrial onshoring, while balancing decarbonization efforts," said David Porter, EPRI vice president of electrification and sustainable energy strategy. "The data center boom requires closer collaboration between large data center owners and developers, utilities, government and other stakeholders to ensure that we can power the needs of AI while maintaining reliable, affordable power to all customers." An estimated 80% of the national data center load in 2023 was concentrated in 15 states, led by Virginia and Texas. 

EPRI highlights three strategies to support rapid data center expansion, including efficiency improvements and increased flexibility; close coordination between center developers and electric companies on power needs, supplies and delivery constraints; and better modeling tools to plan five to 10+ year grid investments. 

Utility firm Duke Energy has recently signed deals with tech giants Amazon, Google and Microsoft, as well as with manufacturer Nucor Steel, for carbon-free energy supply aimed at lowering the cost of building small modular reactors and long-duration energy storage in North and South Carolina. The deals lay out the cost of power and other contract terms for supply, as well as up-front infrastructure build-out payments to guard against volatility in the data center industry, Duke Energy told Reuters. 

The energy firm has about 8.4 million customers in the two states, as well as in Florida, Indiana, Ohio and Kentucky, and owns about 54,800 MW of energy capacity.