Most of America’s power grid infrastructure is 40 to 70 years old. That may not sound ancient, but modern-day pressures are exposing cracks in the system.
Across the nation, aging power systems are crumbling under the strain of the AI boom, extreme weather, and policy paralysis. In several regions, operating reserves are tightening, increasing the risk that supply could fall short during peak conditions when routine outages are factored in. As a result, consumers are grappling with rising utility costs and reduced reliability.
For this Giz Asks, we asked experts what it will take to modernize the U.S. power grid. They pointed to numerous challenges but also outlined clear ways to bring each component of this outdated system up to speed, from generation to distribution.
Eric Hittinger
Department chair and professor of public policy at Rochester Institute of Technology whose research focuses on energy policy.
In the U.S., electricity demand has been pretty consistent over the last 40 years or so. This was a benefit to consumers because it meant that we didn’t need to expand or upgrade the system, and could spend just enough to maintain it. But this leaves us in a tricky time of transition, where decades of deferred upgrades are hitting at the same time that new electricity demand is showing up.
In a physical sense, this means upgrades and expansion to every part of the electricity system: new generation and energy storage, high-voltage transmission lines, upgrades to electricity sub-stations, smart meters and appliances, and smarter measurement and control systems at every level. There are a lot of technical details, but the most interesting question about grid modernization may be: who will pay for all this new stuff?
There isn’t an obvious answer. One possibility is that all electricity customers share the costs. Another answer is that new customers—such as large data centers—should shoulder the largest share, since they are the ones driving the additional demand. The government may also have an important role in funding infrastructure, since affordable and reliable electricity is a social good.
This question of cost allocation will decide who has to pay, but it also affects how the electricity system evolves. If residential customers see a large increase in electricity costs, they will be less likely to adopt technologies like electric vehicles and heat pumps but more likely to get rooftop solar. If data centers are asked to pay for grid upgrades, they may decide to generate some or all of their own electricity from on-site gas turbines.
It is a complicated problem with no easy solution, but the best plans will come out of coordination between utilities, government regulators and policymakers, and electricity customers to identify a way to share the costs of modernization that is fair, affordable, and encourages adoption of clean technologies.
Alexandra Klass
James G. Degnan Professor of Law at Michigan Law who specializes in energy law. Klass also served as deputy general counsel for energy efficiency and clean energy demonstrations at the U.S. Department of Energy from April 2022 to July 2023.
There are multiple components to modernizing the U.S. electric grid, including new physical infrastructure and new forms of grid governance.
The U.S. electric grid has been described as the greatest engineering achievement of the 20th century, but to address today’s 21st century challenges, we must modernize and integrate each of the grid’s three components: generation, transmission, and distribution.
For generation (i.e., power plants), we must expand our generation fleet into one based primarily on carbon-free energy resources—a combination of wind, solar, hydropower, geothermal, nuclear energy, and battery storage with some continued use of existing gas. The Trump administration’s virtual halt to permitting and construction for billions of dollars of investments in onshore and offshore wind and solar is currently one of the largest barriers to accomplishing this task.
For transmission, we must invest in new long-distance, high-voltage transmission lines to support a “macrogrid” that moves power around the country to where it is needed, when it is needed. This must be paired with investments in readily available but underutilized “grid enhancing technologies” (GETs) like reconductoring, dynamic line ratings, and power flow controllers to get more mileage out of the power lines we’ve already built.
For distribution, utility investment in integrating distributed energy resources (customer-side solar, batteries, and microgrids) can reduce the need for new power plants, lower outages, and reduce consumer costs.
Still, many of the grid’s problems stem from governance failures. Governance reforms are needed at the federal level, particularly regarding interstate transmission line planning, which federal regulators have overly outsourced to organizations run primarily by private utilities that often ignore big picture needs. The federal government must also expand its investment in developing and demonstrating energy innovation and onshoring energy technology manufacturing.
Other needed reforms are at the state level. Modernizing state utility regulatory practices must address three key needs: innovative technology, disciplined transmission and distribution investment, and effective operations and maintenance plans.
While there are several transformative approaches that could be effective (for example, public ownership or consumer ownership), more modest reforms are also available. These include incentivizing regulated utility investment in innovative technology and customer-focused benefits that can modernize the grid, decrease outages, incorporate increased demand from AI and other large loads, and lower customer costs.
Miroslav M. Begovic
Moore Professor of electrical engineering and associate director of the Smart Grid Center at Texas A&M University. Begovic is also a former president of the IEEE Power and Energy Society.
Modernizing America’s aging electric grid will require a national investment program driven by three converging pressures: rapid load growth, extreme weather events, and a changing generation mix.
After decades of relatively modest demand growth, the grid is now expected to serve transportation electrification, industrial expansion, and power-hungry AI data centers. Data centers alone may grow from about 4% of U.S. electricity load in 2023 to as much as 9% by 2030, while EVs could add 100 to 185 terawatt hours of annual electricity demand by 2030—roughly 2.5% to 4.6% of anticipated U.S. electricity consumption—and nearly 468 TWh by 2040.
This modernization cannot be limited to additional generation. It must include new transmission corridors, reconductoring of existing rights-of-way, stronger tower structures, dynamic ratings, sensors, and advanced protection. Extreme weather makes this urgent: 80% of major U.S. outages from 2000 to 2023 were weather-related, with severe storms, winter storms, and hurricanes dominant. Therefore, conductor and structure choices should be evaluated not only by ampacity [the maximum amount of current that a wire or cable can safely carry] and first cost, but also by being weather-resilient, with reasonable life-cycle cost.
Newer steel-reinforced and steel-supported high-temperature conductors may be highly competitive with composite-core conductors in difficult mechanical environments, especially where ice loading, high wind, conductor tension, and emergency operating temperatures dominate design. Overhead cable systems are also being considered in selected hurricane-, wildfire-, vegetation-, and icing-prone corridors, where protective coverings can reduce contact-related faults and improve storm resilience. Added weight, cost, and thermal-design implications make them targeted rather than universal solutions.
Generation-wise, advanced small modular nuclear reactors will provide new capacity; DOE estimates advanced nuclear power could add about 200 GW by 2050. At the same time, efficient fast-ramping gas turbines will remain important for reliability, flexibility, and rapid deployment, with 18.7 GW of new U.S. combined-cycle capacity already planned by 2028.
On the distribution side, modernization means turning passive feeders into active platforms. Rooftop solar, behind-the-meter batteries, EV chargers, smart thermostats, and flexible loads can be aggregated into virtual power plants (VPPs). DOE estimates VPPs could reach 80–160 GW by 2030, cover 10% to 20% of peak load, and save about $10 billion annually. Thus, the future grid must be larger, stronger, more digital, more distributed, and more flexible.
Rob Gramlich
Founder and president of Grid Strategies LLC, a power sector consulting firm.
Modernizing the U.S. grid will require coordinated action across planning, policy, and investment, stepping away from the incremental improvements that have been the status quo for the past few decades.
First, if we want a reliable, affordable system, we will have to dramatically expand transmission infrastructure. The current grid was not designed for today’s needs, and we’ve essentially run out of capacity in many regions. Investing in interregional transmission would help ensure access to diverse generation types, improve resilience during extreme weather events and periods of stress, and enable economic growth.
Federal permitting reform legislation would go a long way towards enabling grid expansion. Interconnection queues require continued improvement. We need more efficient study processes and a shift toward proactive planning so that we can bring on both new loads and generation.
Grid planning intra- and inter-regionally needs to be forward-looking. We should be identifying future needs—whether it’s data center-driven load growth or extreme weather—and building ahead of those trends, not reacting after constraints show up. In the nearer term, we should invest in grid-enhancing technologies and high-performance conductors, which can expand capacity and efficiency of the grid. These technologies can help us to reduce timelines for grid upgrades, sidestep permitting issues, and yield billions in annual savings for consumers.
Policy and regulatory alignment will also play a decisive role. Debate over cost allocation, slow permitting, and fragmented decision-making are chokepoints. If we can align incentives and streamline approvals, we can build what’s needed. The path is clear, but we must move faster and at a much larger scale.
