Artificial intelligence processing, the renewal of domestic manufacturing, and electrification of transportation are among the drivers of electricity demand. While this growth is good news, the U.S. power system lacks the capacity to handle it, meeting participants agreed. Expanding the U.S. grid and optimizing its current capabilities, while controlling costs and system reliability, faces several barriers, which the readout report may help to overcome.
“Energy experts across the board realize that this is a pivotal moment and that we all must work urgently to secure America’s energy future,” said Arun Majumdar, dean of the Stanford Doerr School of Sustainability, which includes the Precourt Institute. At the meeting, Majumdar moderated a discussion between Condoleezza Rice, director of Stanford’s Hoover Institution and secretary of state during President George W. Bush’s administration, and Jennifer Granholm, who was secretary of energy during President Joe Biden’s administration.
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David J. Hayes, professor of the practice in the Stanford Doerr School of Sustainability, moderated a panel discussion on U.S. electricity demand, which preceded breakout discussions of the opportunities and challenges there. | Erik Zarazua
The six ideas are not consensus solutions from the all-day meeting. The participants have different political perspectives and work across the private sector, government, academia, and non-profit organizations. Instead, the report’s ideas synthesize the conversations to provide starting points for addressing grid inadequacies already seen in some regions of the country.
National security depends on meeting rising electricity demand, especially in the race to develop and implement AI technologies, which the U.S. and its competitors already use for gathering intelligence, law enforcement, and military operations. Also, the grid is vulnerable to cyber and physical attacks. Policymaking opportunities include negotiating trade agreements to strengthen supply chains, pursuing international partnerships to commercialize technologies like next-generation nuclear energy, and investing to reduce grid vulnerabilities.
Too often, people supporting an all-of-the-above energy supply policy add “except …” Market-driven production from all available electricity resources through mid-century – including renewable energy, nuclear power, natural gas, and energy storage – could control costs and keep the grid reliable. Conducting energy portfolio planning with the short-, medium-, and long-term in mind could also help ensure affordability. Policy options include pairing natural gas with carbon capture, and continuing technology-agnostic tax credits for renewable energy projects.
The U.S. electricity system consists of six regional grids with limited interconnection. The ability to transfer more electricity between regions could help mitigate the intermittency of wind and solar power and reduce costs. Policy opportunities include creating publicly backed financing to build out a national transmission system, granting federal regulators the authority to facilitate such a system, and replacing key existing transmission lines with higher-capacity cables.
Permit timelines for new transmission lines, electricity generation, and energy storage projects have significantly lengthened in the past two decades. Process modernization could get such projects permitted more quickly and inexpensively without sacrificing environmental goals. Policy openings include prioritizing the most advanced projects, implementing permitting “shot clocks,” and using AI and machine learning to accelerate environmental reviews.
The delay in bringing power generation and storage projects online also stems from requirements to determine both the infrastructure needed to connect new projects to the grid and grid adjustments needed to manage a new generation source at the outset. Policy ideas include regional grids adopting a connect and manage approach used successfully elsewhere, and improving the integration of distributed energy resources, such as commercial and residential electricity storage.
Utility incentives prioritize large, capital-intensive projects over those aligned with intended goals, like smart grid technologies to control costs and better resilience to severe weather. Policy opportunities include transitioning from capital-based to performance-based consumer rates, incentivizing transmission line capacity increases, and putting more transmission lines underground.
U.S. economic growth and technological eminence could falter if the U.S. electricity system cannot modernize and expand quickly, meeting participants agreed. The federal government, state and local regulators, utilities, financial institutions, and large IT companies must collaborate on solutions, the report emphasizes.
“Expanding an affordable, reliable, and secure grid is not a partisan issue. It is an American one,” William Chueh, director of Stanford’s Precourt Institute for Energy, and Karen Skelton, a visiting scholar and the project’s leader, write in the report. Skelton was a senior advisor to Granholm and White House Climate Diplomat John Podesta during the Biden administration.
“We urge policymakers and leaders across the country to consider, test, and build on these ideas swiftly – because this is no longer some far-off challenge. America’s energy future has begun,” the two write.
While all stakeholders are needed to rescue the grid, the federal government may have the unique opportunity to lead the development of a strong, interconnected national grid system. President Donald J. Trump’s administration and the 119th Congress inherited this challenge, which is also an opportunity to advance critical, practical reforms quickly, according to the report.
“President Trump has been clear that he wants American energy to be the foundation for our economic growth. Our group’s proposals are practical solutions to make that vision a reality,” said meeting speaker and reviewer of the report, Pat Wood III, CEO of Hunt Energy Network. Wood was the Federal Energy Regulatory Commission chairman who inherited the western U.S. energy crisis of the early 2000s when appointed by President George W. Bush in 2001. “None of these fixes are technically hard,” continued Woods, “but they will only happen with committed leadership.”