Dive Brief:

• The electrification of transportation, space heating and other sectors will lead to a large jump in electricity generation, ultimately requiring billions of dollars in transmission investments over the next several decades, according to analysis from Brattle Group.
• The transmission investment required to accommodate new renewable resources could reach $90 billion by 2030, according to the report released by WIRES Group, a trade association advocating for transmission investment. By 2050, the investment could grow to more than $600 billion. 
• Electrification could increase U.S. annual energy demand by 5% to 15% by 2030, according to the analysis, and by up to 85% by 2050.

​Dive Insight:

The Brattle analysis points to rapid growth of electrified vehicles, along with heating, the data application sector and possibly even some industrial processes, as the main drivers for more transmission spending. 

By 2030, electrification could increase annual demand by 200 TWh to 600 TWh, analysts estimate, and by 1,100 TWh to 3,700 TWh by 2050.

"For these projections to materialize by 2030, the current momentum towards EVs continues to accelerate and heat pumps become a competitive space heating technology in certain markets," the report's authors wrote. "Between 2030 and 2050 electric transportation becomes the dominant transportation technology and heat pumps penetrate a significant portion of the housing stock."

Brattle's "high electrification" case is aggressive, and assumes that electrification powers all transportation and space and water heating needs by 2050.

"The writing on the wall is clear; we're headed toward a cleaner energy future. The transportation and heating sectors will be electrified — it's just a matter of when," WIRES Group President Brian Gemmell said in a statement.

Gemmell, who is also vice president of transmission and asset management for National Grid, called transmission investment "the enabler of our electrified energy future."

The report estimates $30 billion to $90 billion of incremental transmission investments will be necessary in the United States by 2030, with an additional $200 billion to $600 billion needed from 2030 to 2050.

"These investments will be in addition to the investments needed to maintain the existing transmission system and to integrate renewable generation built to meet existing load," according to the report.

That level of investment is equivalent to $3 billion to $7 billion per year on average through 2030 — or a 20% to 50% increase over annual average spending in the past decade, Brattle concluded. And from 2030 to 2050 it would mean $7 billion to $25 billion in incremental investment, an annual increase of 50% to 170%.

Two primary factors will drive the need for this level of transmission investment, Brattle noted: connecting new renewables to the grid and keeping the system reliable while peak load increases.

"Both drivers depend on the pace and scale of the adoption of electrification across the economy," Brattle concluded.

According to WIRES, the estimated number electric vehicles in the United States will rise from abut 1 million today to 7 million by 2025, "and increase exponentially from there." 

Last summer, the National Renewable Energy Laboratory predicted steady electricity demand growth across the next three decades. In large part due to the adoption of electric vehicles, NREL predicted U.S. electricity consumption could increase up to 38% by 2050, compared to business as usual.

With that level of demand growth, the national lab said utilities could go from stagnant demand to compound annual growth rates of 1.6%, amounting to sustained absolute growth of 80 TWh per year.