In recent energy blogs, we’ve been discussing energy industry megatrends, including global market changes, natural resources and renewable energy. In this post, we look at the aging U.S. power grid and what it means for utilities and energy companies.

The Way It Was

The North American transmission and distribution network is the largest of the world’s older grids. When towers and lines were connected almost a century ago, power demand, distribution and reliability were relatively stable. Today, aging infrastructure coupled with extreme demand present a very different picture. U.S. utilities and energy companies (and those in Europe with WWII-era T&D systems) are struggling to patch up pieces of the grid while facing rising costs and looming intermittent failures. According to the American Society of Civil Engineers, it would take a $107 billion investment to bring the grid up to par.

The Way It Will Be

When it comes to competing with other global economies, the U.S. is at a disadvantage compared to growing regions like Southeast Asia. These markets have been able to implement new, modernized grids to support their growing populations and urbanization. Since growth follows demand, U.S. utilities are now competing for resources that are increasingly being siphoned to these emerging markets—markets whose modern grids are also enabling future growth.

To compete, U.S. utilities are increasingly looking to sectors like renewable energy. The question becomes how to use aging networks to bring renewables to life, and how to do it quickly and cost-effectively to keep pace. Utilities also need to consider when it’s time to ask new questions, such as:

• Collaboration is growing. How can new partnerships drive innovation and market creation?
• How can emerging technologies optimize existing infrastructure for growth?
• Having derived as much value as possible, when do we retire old networks and build new?

It’s imperative that utilities be cognizant of these trends to position themselves for future success. To learn more about how global trends could impact your utility, talk to Southwire. Stay tuned for the final post in our energy megatrend series, which talks about North American economic restructuring.