Executive summary

Global energy grids are dynamic entities, yet several problems continue to hinder their development. This brief will look into three key issues: the outdated infrastructure, insufficient government investment, and the difficulty of integrating renewable energy sources.

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Overview

As the demand for energy rapidly increases, the development of energy grid infrastructure faces major challenges. There has been difficulty integrating renewable energy sources into the grid, raising questions about decarbonization of the electricity supply, grid reliability, and energy efficiency.

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Pointed Summary

• Outdated Infrastructure: Many power grids cannot handle current energy demands, becoming prone to outages, inefficiencies, and high maintenance costs.
• Integration of Renewables: The intermittent nature of renewable energy requires more advanced power grid storages and management systems to accommodate and maintain increased energy supply.
• Lack of Investment: While investment in energy sources has almost doubled since 2010, global investment in energy grids has hardly changed, staying stagnant at about $300 billion annually¹.

Relevance

The growing backlog of renewable energy projects awaiting grid connection highlights the importance of developing this infrastructure. More than 3,000 gigawatts (GW) of renewable energy projects, where more than 1,500 GW are in advanced stages, queue globally and constitute a substantial barrier in the transition to net-zero emissions. Furthermore, extreme weather events put additional strain on aging grids. As a result, debate continues on how to improve grid infrastructure, ensure energy security, and achieve climate targets.

History

Current Stances

The American energy grid has experienced several failures nationwide, demonstrating the need for a more stable energy grid. For example, millions of Texans around the Houston area have been left without electricity several times over the years.² While all parties have agreed to large-scale energy grid reform, there are differing viewpoints as to how the changes should be carried out.

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Federal Government Stance on Infrastructure Development in Vulnerable Areas:

The Senate’s Joint Economic Committee recently endorsed a shift to renewable energy in order to combat weather-related energy grid obstructions. A memo released in January 2024 cited the catastrophic events in Texas as key drivers of this proposed shift and urged Congress to move towards a more sustainable power grid.³ 

Incorporating renewable energy, especially in areas with vulnerable infrastructure, aligns with recommendations and projections of the US Department of Energy and the Oak Ridge National Laboratory Climate Change Science Institute.⁴ This study found that the fossil fuel-based energy grid in Texas caused the aforementioned failures, stating that “fossil-intensive grids cannot provide consistent resilience against climate risks they are simultaneously exacerbating.” ⁵

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State Government Stance on Infrastructure Development in Vulnerable Areas:

The Texas government provides an opposing perspective on the matter. ERCOT (the Electric Reliability Council of Texas), a nonprofit organization governed by the Public Utilities Commission of Texas, has attributed the state’s widespread grid failures to poor integration from clean energy sources.⁶ Specifically, ERCOT warned that flaws in solar, wind and battery storage resources decreased the grid’s reliability. Governor Greg Abbott also blamed grid failures on the increased usage of clean energy.⁷

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Tried Policy

The Biden Administration has focused on legislation that aligns with the stated policy stances of Senate Democrats and the Department of Energy. In August, it announced a $2.2 billion infrastructure investment aimed at preparing the grid for extreme weather.⁸ One of the stated goals of this initiative was: “Selected projects will leverage innovative transmission infrastructure to improve grid resilience and reliability and integrate more clean energy to the grid.” ⁸ However, the bill received criticism from some Congressional Republicans, with the Republican-led Subcommittee on Economic Growth, Energy Policy, and Regulatory Affairs holding hearings regarding the efficacy of the Biden Administration’s “spending sprees.” ⁹

Following the Texas outages, Governor Abbott unveiled large scale investments in the grid, with a $10 billion increase in the Texas Energy fund laying at the forefront of these investments.¹⁰ The primary goal was constructing new gas-fueled power plants, highlighting the Abbott administration's focus on traditional, non-renewable energy sources.

There has not been any immediate success following the public investment from either of the aforementioned policy and investment approaches, mostly due to the nature of building and improving such large scale infrastructure.¹² It remains to be seen whether or not these policies have any meaningful impact on the energy grid failures.

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Policy Problem

New transmission lines take time to complete. However, a major issue has further slowed this process: private property owners must approve the projects. Opposition from a singular household can prevent an entire venture from being completed.¹³ There are several reasons why families would reject these proposals

1. Construction can be loud and obnoxious. Lengthy projects are especially disruptive to communities.
2. Transmission lines are incredibly large, standing between  380 m tall and 45 m tall.¹⁴ They can ruin local aesthetics, decreasing property value and eliminating identity.
3. Many families are scared that the transmission lines could collapse. This fear makes it difficult for them to approve such a project.

An excellent representation of this dilemma can be seen with the New England Clean Energy Connect (NECEC). In 2017, they proposed a five year plan to build a high-voltage transmission line from Maine to Massachusetts. However, a referendum in Maine halted the project, with 59% of voters electing to prevent further construction of the power line. To this day, the line has not been completed, as legal battles and public outcry continue to stall progress.

Years earlier, the NECEC initially proposed a similar idea in New Hampshire. However, this plan also faced strong opposition from local communities and environmental groups. In 2018, the project was officially rejected, emphasizing the difficulty of long-term infrastructure reform;

Investors actively fund research and resources for transmission line projects. However, if these struggles persist, financial backing for renewable grid reform may cease to exist. Thus learning ways to accelerate the process of building transmission lines will drive a cleaner future for the world.

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Policy Options

Several policy options provide potential solutions to address the challenges of energy grid development. From strengthening regulatory frameworks to establishing comprehensive national standards and promoting public-private partnerships, innovation and growth continue.

First off, existing regulations can be improved. For example, if states streamline permitting processes and update safety standards, they eliminate any bottlenecks that delay the start of projects.¹⁵ As a result, more projects will have the opportunity to succeed. 

Similarly, states could adopt standardized timelines for the aforementioned approval process. Mandating a state agency’s response not only improves accountability, but also reduces uncertainty for developers.¹⁶ At the same time, states may allow local governments the flexibility to adapt regulations based on their unique energy grid needs, fostering a more equitable approach toward deploying energy infrastructure. However, the potential inconsistency of infrastructure quality, depending on where one may live, poses a significant disadvantage to the installations. If regulations are not enforced uniformly, safety standards or energy reliability will be lacking in underdeveloped areas, causing a cascading negative effect on consumers and businesses.

Establishing comprehensive standards nationwide for energy grid development provides a second alternative. Such a program would have to be established at the federal level, in a similar manner to the EPA.¹⁸ Specific enforcement decisions would vary state-by-state, but would generally entail a combination of categorical grants and federal mandates.

A national framework would make for a more reliable energy grid, creating statewide consistency regarding energy resource management. By requiring all states to adopt improved grid technologies, the federal government can facilitate energy management and distribution, ultimately reducing waste and improving efficiency.

While the establishment of national standards may provide immense benefits, it also comes with unique challenges as a result of the differences in existing energy systems. The inflexibility of a standardized approach might not accommodate the unique circumstances of different states. For example, those with abundant renewable resources, such as wind or solar, likely have different needs compared to those reliant on traditional fossil fuels.¹⁹ Historical, environmental, and political factors combine to determine how energy use and sourcing are distributed across the country. Implementing such comprehensive regulations requires substantial resources and time, likely leading to pushback from states that prefer maintaining their autonomy.

A third strategy involves promoting public-private partnerships to utilize private-sector investment for energy infrastructure projects, encouraging collaboration between the government and private firms. Using economic incentives for private companies to invest in grid enhancements helps states expedite project timelines and incorporate innovative technologies into their energy systems. For example, tax credits or grants could be offered to private firms that develop technologies to improve energy efficiency or integrate renewable energy sources.²⁰ These partnerships may also encourage more research and development, as private companies often have the agility and resources to innovate rapidly compared to public agencies.

However, the use of public-private partnerships also can produce negative consequences. If not carefully managed by the government, these partnerships could lead to underfunded public infrastructure or poor maintenance due to the pursuit of private monetary gain.²¹ Structuring these partnerships will inevitably be complex and time-consuming, which could delay the implementation of critical infrastructure projects.²² Furthermore, companies might find projects in wealthier regions more attractive even if they are not as necessary. Thus, marginalized communities could be overlooked as the grid develops. 

While there are several policy options to improve energy grid infrastructure, each comes with its own set of benefits and drawbacks. Ultimately, combining specific aspects from each individual strategy may be the most effective way to create a resilient and sustainable energy grid that meets the needs of all communities. By thoughtfully considering such options, policymakers can make decisions that pave the way for an improved energy future.

Conclusions

Energy infrastructure in the United States depends on several major factors, ultimately creating a complex scenario that is challenging to effectively navigate. Economic, political, social, and environmental considerations must be balanced when determining potential solutions, placing an extreme burden on the institutions that are responsible for making these decisions. No matter what direction is chosen, though, successfully developing America’s energy grid infrastructure will require planning, compromise, and significant investments from multiple stakeholders.

Acknowledgment

The Institute for Youth in Policy wishes to acknowledge Anagha Nagesh, Anoushka Swaminathan, Nolan Ezzet and other contributors for developing and maintaining the Policy Department within the Institute.

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