Transforming an Aging Grid – Where Should Utilities Focus Investments?

The North American electric grid is a remarkable achievement. Spreading across the entire continent, the complex mix of generation, transmission, and distribution infrastructure continues to deliver reliable power to customers in even the most remote locations.

Today, however, the grid has reached a tipping point. Originally built decades ago, much of the critical infrastructure is at or near the end of its life. At the same time, electricity demand is growing, and the grid is being asked to accommodate a far wider range of energy sources and generation technologies.

To ensure reliability, affordability, and sustainability targets are met, governments and utilities must both make significant investments. This article will explore the current state of the grid in Canada and the US, examine how investments are being made today, and show how technology can help utilities optimize their spending to achieve the best outcome for customers and shareholders.

The State of the Grid – Aging Infrastructure in Need of Repairs

Recent investments in electric infrastructure have generally been insufficient. In the US, a recent report by the Department of Energy found that more than 70 percent of transmission lines were more than halfway through their 50-year life. Similarly, the average age of large transformers exceeded 40 years, increasing the risk of catastrophic and costly failure.

Modernizing the US grid is a monumental task that will take place incrementally over decades. In total, it’s estimated that upgrading the grid will cost between $1 trillion and $2.4 trillion by 2050.

The situation is similar in Canada, where the majority of the electricity system was built more than 50 years ago. Not only does this place additional strain on utilities, but it also hinders efforts to achieve aggressive decarbonization and sustainability targets at the national level, such as the 2030 Emissions Reduction Plan.

With demand rising, Canada needs to upgrade existing infrastructure while substantially increasing the capacity of the grid. By 2050, the total investment is expected to reach more than $1.1 trillion.  

Investing in Transmission and Distribution

Until recently, much of the focus has been on generation. New and improving green technologies, such as onshore wind and photovoltaic solar, as well as increasing capacity for natural gas and other sources, have driven investments in new generation capabilities.

However, with aging transmission and distribution systems, now is the time for utilities and governments to refocus efforts on modernizing the grid.

Fortunately, there are signs pointing in the right direction. In the US, the Infrastructure Investment and Jobs Act allocated more than $65 billion in spending on power infrastructure. The country’s largest utilities spent an estimated $142 billion in 2021, while 76 percent are planning or depending on new transmission projects going forward.

Utilities are slightly more hesitant in Canada, with at least one analysis suggesting infrastructure investments are failing to keep up with demand. That said, a 2022 survey found that more than 50 percent of private utilities expected that investments would increase significantly in the coming years.

Optimizing Investments With Technology

With so many opportunities to enhance and improve the grid, how can utilities decide where to allocate spending?

One solution is to implement utility-grade visualization software with advanced data and analytics capabilities. By inputting data such as maintenance history, service records, the age and condition of components, and any restraints or requirements, the utility can calculate where to invest and how to optimize grid infrastructure to meet its strategic objectives.

In the interim, utilities can deploy thermal and visual sensors to target known trouble spots or assets that are nearing end-of-life. With a continuous view, utilities can schedule repairs and upgrades based on their strategic priorities and budget while simultaneously mitigating risk and ensuring the reliable delivery of power to customers.

Building the Grid of the Future

Today’s electrical grid has provided enormous value to society, customers, and utilities. But new realities are placing a significant burden on aging and deteriorating infrastructure. Both utilities and governments must refocus their efforts and identify the right investments to meet rising demand and achieve reliability, affordability, and sustainability targets not just for today, but for the future.