By: Brittanie Schneider
Edited By: Andrew Bongiovanni
The word “energy” is everywhere, relating to nearly every aspect of modern life. Access to energy has become foundational to the functioning of today’s world, almost as essential to daily existence as water or air. Consider this: these words are likely being read on a device powered by energy, in a well-lit, temperature-controlled room. While the convenience of charged devices and instant lighting is undeniable, the importance of energy reliability goes much further––potentially creating life-or-death situations. As climate change continues to create more dramatic weather patterns, people are increasingly dependent upon functioning heat and air conditioning to survive. This creates a twofold problem: increasing the necessity of a reliable energy grid while also increasing the stress put upon it. A reliable energy grid is the backbone of modern society, yet, as the United States accelerates decarbonization efforts to limit the impacts of climate change, the risks to the reliability of the grid are rapidly increasingly. If these risks are not properly addressed, it could not only threaten public health and safety, but ultimately undermine necessary climate objectives.
Risks to the Grid
In order to function properly, the grid must be balanced at all times with supply (generation) equaling demand (load).1 The ability to maintain this equilibrium and provide power when needed is what makes the grid reliable.2 Most power outages are small and caused by events like falling trees, severe weather, or equipment failure, rather than generation supply shortages.3 These types of outages can usually be quickly repaired, with power restored within hours. This capacity, in particular, means that the U.S. grid is quite reliable.4 However, according to the North American Electric Reliability Corporation (NERC)––the regulatory authority responsible for assuring the reliability and security of the grid in North America––this may not be the case for much longer.5 NERC’s most recent Long Term Reliability Assessment has identified serious challenges for the reliability of the U.S. grid over the next decade, as it goes through its most profound transformation since its beginnings in the late 19th and early 20th centuries.6,7
Increased Demand and Decreased Generation
The demand for electricity is skyrocketing as we push toward widespread electrification of things like vehicles and heating systems. Coupled with this, is a new demand surge from data centers, as the proliferation of AI is expected to drive a 160% increase in the power demands from existing centers.8 Simultaneously, while demand is going up, traditional generation resources are being retired faster than they are being replaced by clean energy resources, creating a resource adequacy gap. Due to the intermittent nature of renewables, to maintain reliability there needs to be about four times the amount of renewable energy to replace traditional sources.9
Permitting Delays
While renewable resources are actively being deployed, they are not coming online in time to replace retiring fossil fuel generators. Part of this is due to permitting bottlenecks.10,11 Although new projects have been planned out, permitting and siting delays as well as labor and supply shortages are preventing sufficient clean energy resources from coming online in time. 12 Last year, the head of the country’s largest grid operator, PJM Interconnection, told the Senate Energy and Natural Resources Committee that they have more than double the amount of megawatts needed to replace their retiring generators waiting in the queue, but they are concerned about getting them built in time to replace the resources that are retiring.13
Outdated Infrastructure
This rapidly evolving energy mix also requires significant modernization of the existing grid infrastructure. Much of the current infrastructure was not built to accommodate such a fluctuating and variable energy mix.14 Additionally, many grids are regionally limited and as such, can only access available renewables nearby. To connect enough new, large scale renewables to where they are needed, double the amount of existing cables will be needed globally––roughly the distance between Earth and the Sun.15 This will take significant investment to both connect renewable energy sources from where they are generated to where they are needed and to strengthen existing infrastructure, all while ensuring that people have reliable access to energy.16
Climate Threats
One of the biggest threats to grid reliability comes as climate change continues to drive more extreme weather patterns with more intense wildfires, heatwaves, snowstorms, and generally higher high and lower low temperatures. These events create two-fold challenges as they both threaten infrastructure and reliable generation, while also driving increased demand and higher energy loads, thus making it more difficult to balance supply and demand, ultimately threatening reliability.17
Why it Matters
Without a reliable grid and affordable energy, homes cannot maintain safe temperatures, businesses cannot operate, and hospitals cannot continue to provide critical care. Grid failures could cause rippling economic consequences by disrupting business operations, creating additional inflated costs, diminishing job opportunities, and hindering economic growth.
Perhaps more importantly, underlying the risks to grid reliability is energy affordability. As grid operators strive to upgrade infrastructure, compete for finite existing renewable resources, race to build new generation sources, and modernize the grid, the costs to continuously provide reliable energy steadily climb. This means that energy bills climb. For the average household, the cost of electricity has increased more than 28.5% from 2019 to 2024.18 For many, this is simply unaffordable. As energy poverty affects more people, many are forced to make impossible financial choices between keeping their homes at safe temperatures or foregoing other necessities like food or medications.19
Additionally, and perhaps paradoxically, grid failures during this transitional phase could cause significant climate goal setbacks. The successful decarbonization and transition of the grid hinges upon maintaining public trust. Public confidence, in turn, hinges upon keeping the lights on and keeping energy affordable. Without consistent and affordable power, people may grow to oppose future climate goals, if they see them as harmful to their family’s well-being today.
Lessons to be Learned
These risks and challenges are not isolated to the U.S. The rest of the world is grappling with similar challenges. The Energiewende was Germany’s incredibly ambitious plan to rapidly phase out fossil fuels. However, it has been marked by soaring energy prices and serious reliability concerns. 20 While quickly shuttering traditional fuel sources, Germany’s complicated and slow permitting process prevented adequate renewables from coming online in time to replace the lost generation.21 This forced them to import Russian natural gas to make up the gap. However, when Russia invaded Ukraine these gas imports halted, forcing Germany to reopen several coal plants, effectively counteracting their previous climate progress.22 Additionally, the financial burden on the people of Germany has been significant. Energy rates in Germany are among the highest in Europe and they are still encountering periodic blackouts.23 From one of the strongest European economies only a few years ago, Germany now has the worst performing economy of the major developed countries with overpriced and unreliable energy access, causing serious public and political backlash.24
Domestically, California has spearheaded the transition to renewables, however, this rapid transition has also encountered reliability concerns. In 2020 California faced severe heatwaves that forced regulators to introduce rolling blackouts to prevent grid failure.25 Without adequate backup power sources to replace solar generation when the sun set, coupled with extraordinary demand, the grid failed to maintain reliability.26 Energy costs then skyrocketed as California officials attempted to import energy and compete for finite resources from other nearby stressed grids. In 2022 the state recognized the dangers of prioritizing speed over achievability. They decided to extend operations of several natural gas plants that were scheduled to be retired.27 Germany and California’s transitions underscore the importance of balancing renewable energy integration with grid reliability to prevent vulnerabilities and achieve climate objectives.
Policy Recommendations
The United States must transition and modernize its energy grid to combat climate change. However, to succeed, policymakers should adopt a balanced, thoughtful, and carefully planned approach to align decarbonization with grid reliability. It is paramount that policymakers set realistic and achievable timelines that allow for sufficient infrastructure development, encourage diversified energy portfolios to mitigate the risks from over dependence on any singular resource, and work collaboratively with energy providers to find affordable solutions. Key strategies should include the following:
Phased Reductions in Fossil Fuels
Transitioning away from coal and natural gas must be carefully phased to avoid leaving power generation gaps. Renewable energy sources should be scaled up in parallel with investments in storage and backup systems to maintain stability and should be made fully viable before prematurely shutting down other sources.
Investments in Grid Modernization
Modernizing the grid is critical to accommodate a more complex and variable energy mix and withstand the effects of climate change. Over 70% of transmission lines are now approaching the end of their typical lifecycle.28 While this creates an increased risk of equipment failures, it also poses an opportunity to make modernization investments to replace aging infrastructure that must already be replaced. This should include upgrading transmission infrastructure to connect renewable energy sources to population centers and deploying more advanced technologies like energy storage and microgrids.
Encouragement of Demand-Side Flexibility Programs
Part of the solution should also include involving the public. Encouraging smarter energy consumption can help to reduce strain on the grid during peak load times. Demand response programs that incentivize consumers to shift energy use to off-peak hours can help reduce grid stress, encourage consumers to assume a more active role in their energy use, and enable them to make choices that directly impact their energy bills. Programs that encourage distributed energy resources (DER) such as rooftop solar or home battery systems can also help reduce demand stress.
Support for Emerging Technologies
Long-term grid stability will depend on continued innovation. Policymakers should support research and development for large-scale, long-duration energy storage to address renewable intermittency. Additionally, there should be investment in new dual fuel transmission technologies. A prime example is pipelines that can switch from natural gas to green hydrogen, thus saving building costs and providing a source of reliable energy.
Enabling Flexible, Regionally Specific Solutions
The U.S. electric grid is as diverse and complicated as the country itself. Different regions face unique energy resources, climate conditions, and grid infrastructure. As tempting as a one-size-fits-all solution may be, policymakers should encourage regionally specific approaches that are tailored to local needs and resources. This includes prioritizing investments in diverse energy portfolios such as geothermal, hydrogen, offshore wind, and hydropower, while also promoting federal coordination to ensure interconnectedness between regional grids. A flexible, regionally adaptive policy framework ensures resilience and reliability without imposing generalized mandates that may not suit all areas and may place outsized costs on consumers.
Conclusion
The stakes could not be higher; a resilient and reliable energy grid is not just a technical necessity, but the linchpin of public trust and safety as well as climate success. By taking bold yet pragmatic action, the United States can lead the world in demonstrating how to achieve a clean energy future that does not leave reliability and affordability behind.
Works Cited
[1] Joseph, Kelli. 2024. “Focused Policy Key to Reliable Electricity Sector Transition: Part 1.” Kleinman Center for Energy Policy (blog), May 13. https://kleinmanenergy.upenn.edu/commentary/blog/focused-policy-key-to-reliable-electricity-sector-transition-part-one/
[2] Office of Energy Efficiency & Renewable Energy U.S. Department of Energy. 2024. “Energy Reliability.” Energy.gov. Accessed November 21. https://www.energy.gov/eere/energy-reliability
[3] National Renewable Energy Laboratory. n.d. “Explained: Reliability of the Current Power Grid.”
[4] Office of Energy Efficiency & Renewable Energy U.S. Department of Energy. 2024. “Energy Reliability.”
[5] North American Electric Reliability Corporation. 2023. “2023 Long-Term Reliability Assessment.” December. https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2023.pdf
[6] Grid Deployment Office U.S. Department of Energy. 2023. “What Does It Take to Modernize the U.S. Electric Grid?” Energy.gov, October 19, 2023. https://www.energy.gov/gdo/articles/what-does-it-take-modernize-us-electric-grid
[7] Jordan Ellis. 2024. “The History of the Power Grid in the United States.” Landgate, September 6. https://www.landgate.com/news/the-history-of-the-power-grid-in-the-united-states.
[8] Goldman Sachs. 2024. “AI Is Poised to Drive 160% Increase in Data Center Power Demand.” May 14, 2024. https://www.goldmansachs.com/insights/articles/AI-poised-to-drive-160-increase-in-power-demand
[9] Tate, Curtis. 2023. “PJM Head: Energy Transition Can Be Done, But Grid Reliability Is At Risk.” June 2. https://wvpublic.org/pjm-head-energy-transition-can-be-done-but-grid-reliability-is-at-risk/
[10] North American Electric Reliability Corporation. 2023. “2023 Long-Term Reliability Assessment”
[11] Camilla Palladino. 2023. “Grid Bottlenecks Delay Transition to Clean Energy.” Financial Times, May 30. https://www.ft.com/content/bf1b788a-f366-4637-9ae4-08dbc0bd90fa
[12] American Public Power Association. 2023. “NERC Long-Term Assessment Raises Reliability Concerns Over the Next 10 Years.” December 18. https://www.publicpower.org/periodical/article/nerc-long-term-assessment-raises-reliability-concerns-over-next-10-years
[13] Tate. 2023. “PJM Head.”
[14] Norther American Electric Reliability Corporation. 2023. “2023 Long-Term Reliability Assessment.”
[15] Palladino. 2023. “Grid Bottlenecks Delay Transition to Clean Energy.”
[16] Lyons, Cristin, and Greg Litra. 2024. “California’s Energy Transition – Energy Industry Update V22 I2 – Money, Money, Money.” Accessed December 1. https://publications.scottmadden.com/energy-industry-update-v22-i2/californias-energy-transition
[17] Grid Deployment Office U.S. Department of Energy. 2023. “What Does It Take to Modernize.”
[18] Cohen, Li, Tracy J. Wholf, and Marina Jurica. 2024. “Electricity Prices Are on the Rise. Is It Inflation or an Underlying Issue?” September 2. https://www.cbsnews.com/news/electricity-prices-rising-inflation-climate-change-clean-energy/
[19] Al-Dhubaib, Fahad. 2024. “Realism Is Key to Balancing the Energy Transition with Growth.” World Economic Forum (blog), May 10. https://www.weforum.org/stories/2024/05/the-world-needs-a-new-strategy-for-the-energy-transition/
[20] Loch-Temzelides, Ted. 2024. “So Much for German Efficiency: A Warning for Green Policy Aspirations?” Rice University’s Baker Institute for Public Policy, August 22. https://www.bakerinstitute.org/research/so-much-german-efficiency-warning-green-policy-aspirations
[21] McHugh, David. 2023. “Germany Went from Envy of the World to the Worst-Performing Major Developed Economy. What Happened?” AP News, September 19. https://apnews.com/article/germany-economy-energy-crisis-russia-8a00eebbfab3f20c5c66b1cd85ae84ed?ref=hir.harvard.edu
[22] Lontay, Oliver. 2024. “Germany’s Energy Crisis: Europe’s Leading Economy Is Falling Behind.” Harvard International Review, May 30.https://hir.harvard.edu/germanys-energy-crisis-europes-leading-economy-is-falling-behind/
[23] Loch-Temzelides. 2024. “So Much for German Efficiency”
[24] McHugh. 2023. “Germany Went from Envy of the World to the Worst-Performing Major Developed Economy.”
[25] Cart, Julie. 2020. “Answers to 7 Burning Questions about California’s Rolling Blackouts.” CalMatters, August 19. http://calmatters.org/environment/2020/08/california-2020-rolling-blackouts-explainer/
[26] Kasler, Dale, and Maria Heeter. 2020. “California Avoided Rolling Blackouts for Two Decades. What Went Wrong on the Grid?” The Sacramento Bee, August 17. https://www.sacbee.com/news/local/article244988455.html
[27] Lazo, Alejandro. 2024. “California Hits Milestones toward 100% Clean Energy — but Has a Long Way to Go.” CalMatters, August 19. http://calmatters.org/environment/climate-change/2024/08/california-clean-power-progress-grid/
[28] Grid Deployment Office U.S. Department of Energy, “What Does It Take to Modernize the U.S. Electric Grid?”
