Modernizing the U.S. Energy Grid

From: Council on Foreign Relations

CFR Backgrounders

Author: James McBride, Online Writer/Editor, Economics

Introduction

A vast network of power plants, transmission lines, and distribution centers together make up the U.S. electrical grid. The grid constantly balances the supply and demand for the energy that powers everything from industry to household appliances. Out of sight for most, the grid usually only comes to public attention due to large-scale failures, such as the blackout that struck the Northeast in 2003.

With the rise of renewable energy and so-called “distributed generation,” or the ability of individual homes and businesses to produce their own power, the traditional grid is under increasing pressure. It is losing customers at the same time that its aging infrastructure requires major—and expensive—overhauls, and the EPA imposes unprecedented greenhouse gas regulation. Meanwhile, private and public investments in “smart grid” technologies are increasing the system’s efficiency while accelerating trends that threaten to shrink the grid’s customer base, increase consumer energy prices, threaten the reliable delivery of power, and raise questions about the network’s vulnerability to cyberattacks.

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