Climate action plans in towns, cities and states call for “beneficial electrification” and “decarbonization”. These are fancy terms for electrifying transportation, businesses, and the heating/cooling of buildings.

In the same vein, a consortium of US states and territories recently announced a commitment to deploy 20 million heat pumps by 2030. These are laudable energy goals, if we power the grid with renewable energy.

But can our electric grid handle the increased demand? Few analysts have answered this question.

Studies on the electricity demand of EVs have been done. But I’ve found little information on what happens if we electrify homes, transportation, public buildings and businesses—all at once. What happens then?

Experts have made wildly varying forecasts: According to the federal government the grid will need to be 30% larger by 2050. According to the Brattle Group, an economics consultancy, it will need to be 200% larger. According to a Maine PhD economist, the grid will need to be “at least 3x larger than it is now”.

Variables include whether both residential and commercial energy users are considered, and whether energy efficiency and load management can significantly lower demand. But even if we don’t know how much electricity we will need in the future, several things are certain. One is that the grid of tomorrow will look different from the grid of today.

Instead of generating energy in central locations and sending it out over long transmission lines, we will have a denser, more distributed electric grid. “It will look more like the internet”, says one energy expert, with more local interconnections throughout the system.

If we want to generate more electricity locally, then we will need to build out local and regional transmission lines. Circuits, substations and transformer banks would need to be upgraded, as well.

The other thing we know is that to upgrade the grid, we will need affordable capital. Lots of capital.

This is where locally owned utilities have an advantage. They can finance investments at lower rates than investor owned utilities, saving ratepayers significant money.

But, since a majority of our electricity is delivered by investor owned utilities, policy changes will be needed to make their grid upgrades affordable. This could mean creating new public bonding authorities to supplement corporate financing.

Or it could mean changing the federal and state incentives so that investor owned utilities are rewarded for building the distributed grid we need, instead of the large, centralized grid of yesterday.

Other policy tools such as energy efficiency incentives, off peak and time of use based pricing, and improved load management will likely play a role too.

Yes, I believe we will reach our goals for a clean energy future. But to do this utilities, regulators and property owners will need to work together to plan for renewable energy, and upgrade the grid at a reasonable cost.

Quote: “Utilities, regulators and property owners will need to work together to help plan the transition toward powering more and more of our economy with cleanly generated electricity….Regulators need to encourage utilities to do this planning, and to promptly review plans that incorporate these new loads and programs.” -Steven Nadel, Executive Director, ACEEE

    For further reading:

Heat Pumps: https://rmi.org/what-a-20-million-heat-pump-commitment-means-for-the-us/
Grid: https://www.washingtonpost.com/business/2021/06/29/power-grid-problems/
Grid: https://www.washingtonpost.com/business/2021/10/13/electric-vehicles-grid-upgrade/