The U.S. Department of Energy is allocating $2.2 billion in grants for upgrades of the grid to make it more resilient to extreme weather events and accommodate more renewable energy.
The funding from the DOE will add to private sector financing to support eight grid upgrade projects across 18 states.
According to the U.S. Administration, the DOE funding is expected to support the construction of more than 600 miles of new transmission lines and the upgrade of about 400 miles of existing lines so that they can carry more current.
"The first half of 2024 has already broken records for the hottest days in Earth's history, and as extreme weather continues to hit every part of the country, we must act with urgency to strengthen our aging grid," U.S.
Secretary of Energy Jennifer Granholm said in a statement carried by Reuters.
As power demand grows, the share of renewables rises, and extreme weather events such as heat waves and winter freezes become more frequent, electric utilities say that the U.S. grid reliability will need significant spending, more than the expenditures in previous decades.
U.S. utilities and regulators have raised significantly their forecasts of peak power demand in the coming decade, as both expect exponential growth in electricity demand from data centers and new technologies such as generative AI.
Investments that have been pushed back in recent years have now become urgently needed to address grid reliability issues and expand the transmission infrastructure to meet growing demand and accommodate more solar and wind power in the system.
"The problem that we have right now comes from decades of lack of investment," Pedro Azagra, chief executive at Avangrid, which operates utilities in New England and New York, told The Wall Street Journal last month.
"You cannot catch up in one minute," added the executive, who said that Avangrid has hiked expenditures to address challenges in grid reliability.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More