Essential Upgrade of the US Electric Grid Requires a $1 Trillion Investment
The United States is embarking on a significant modernization of its power grid, with a focus on integrating advanced technologies, reforming utility business models, and expanding grid capacity to meet rising electricity demand and the challenges of the 21st century.
Key approaches include deploying energy storage, smart grid technologies, grid-enhancing technologies (GETs), improving transmission efficiency, and building more interregional high-voltage transmission lines like HVDC macrogrids.
State policy efforts are at the forefront of this modernization, with nearly 300 bills introduced in 2025 by state lawmakers. These policies encourage utilities to integrate new technologies and consider alternatives to traditional wires-based transmission.
Grid-enhancing technologies (GETs) and conductor upgrades are also being promoted to add capacity and improve reliability without building entirely new lines. These technologies optimize existing infrastructure for higher performance and lower cost.
The U.S. grid faces challenges, including aging equipment, lengthy permitting processes, and a surge in renewable energy projects causing project backlogs. The grid infrastructure is being upgraded to manage variable renewable generation and support electrification trends.
To ensure reliability amid increasing severe weather and rising demand, experts propose creating an interconnected high-voltage direct current (HVDC) network across regions. This “macrogrid” would enable efficient, long-distance power transfer, unlocking renewable resource potential and enhancing grid resilience without replacing the existing AC grid.
However, the demand for power transformers has surged, driven by rising electricity use and renewables integration. Domestic manufacturing capacity lags, leading to import reliance, which impacts the pace of grid upgrades and project timelines.
Innovative solutions are being implemented to address these challenges. For instance, in New York, utilities are testing AI models that can anticipate grid failures before they happen. Massive battery facilities, such as California's Moss Landing, absorb excess wind and solar power when generation is high and release it during peak demand hours.
The importance of safety and emergency systems keeping pace with the rapid growth of storage capacity was emphasized by a significant fire at Moss Landing in early 2025.
Engineering solutions for grid infrastructure are shared across borders. Mastery of renewable integration and smart grid innovation will allow nations to lead the next phase of economic growth. China is leading global investment in grid infrastructure, with State Grid set to invest a record $88.7 billion in 2025.
Lastly, the deployment of microgrid systems is rapidly expanding, especially in disaster-prone areas and critical facilities such as hospitals. Microgrids are localized networks that operate independently during outages while connecting normally to the main grid. They are digital systems that monitor electricity flow in real time, predict when demand will spike, and spot equipment failures before they cause blackouts.
[1] Grid Modernization: A Comprehensive Approach [2] Grid Modernization: The Role of GETs and Conductor Upgrades [3] Grid Modernization: Addressing Renewable Integration and Aging Infrastructure [4] Grid Modernization: Building a National HVDC Macrogrid [5] Grid Modernization: Transformer and Equipment Supply Challenges
- Grid Modernization: A Comprehensive Approach involves integrating the latest technologies, reforming utility business models, expanding grid capacity, and addressing the challenges of the 21st century.
- Grid Modernization: The Role of GETs and Conductor Upgrades includes promoting grid-enhancing technologies and conductor upgrades to add capacity and improve reliability without building entirely new lines.
- Grid Modernization: Addressing Renewable Integration and Aging Infrastructure necessitates upgrading the US grid to manage variable renewable generation, support electrification trends, and navigate challenges like aging equipment and lengthy permitting processes.
- Grid Modernization: Building a National HVDC Macrogrid proposes creating an interconnected high-voltage direct current network across regions to enhance grid resilience, unlock renewable resource potential, and facilitate efficient, long-distance power transfer.
- Grid Modernization: Transformer and Equipment Supply Challenges arise from the surging demand for power transformers due to rising electricity use and renewables integration, with domestic manufacturing capacity lagging behind, leading to import reliance.
