Gov’t Reports Predict Grim Future for U.S. Electric Grids

January 21, 2009

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The Department of Energy’s Electricity Advisory Committee painted a bleak picture on the future of the U.S. electric grid in a series of reports it recently issued, Ars Technica reports.

The three reports: Report on Electricity Supply Adequacy (PDF), Report on Smart Grid (PDF), Report on Energy Storage Technologies (PDF) revealed that the government has policy failures and perverse disincentives for companies to invest in innovative ways to produce and distribute power.

Despite having talked about energy independence for decades, America still doesn’t have a decent national policy, which makes planning at any level challenging, the reports noted. What’s more, the lack of a national plan also means infrastructure work has to deal with a patchwork of federal and local regulations – projects are often reviewed by a half-dozen different government agencies, each with their priorites and long-term plans.

Financial incentives for the electricity market are also badly mismatched. Building large generating facilities requires a lot of capital and may not see return on investment until decades later. Moreover, projects are deemed very risky and only affordable for large utilities, due in part to the regulatory environment described above. The result is a dire lack of diversity and innovation in the nation’s generating and transmission infrastructure.

New U.S. president Barack Obama has promised to put green energy at the top of his “to do” list in the White House. Experts say the general public could start seeing the effects of the smart grid by Obama’s second year in office.

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