Rapid energy demand growth in the U.S. is threatening an aging and fragile electric grid, says the American Society of Civil Engineers, resulting in the group dropping the energy sector’s 2025 Infrastructure Report Card grade to a D+ from the C- they gave it in 2021.
ASCE cited a shortage of distribution transformers, increases in severe weather events and a lack of transmission capacity as some of the challenges facing the U.S.
At the same time, “consumers and businesses are growing increasingly reliant on data storage facilities, artificial intelligence, and electrified products such as EVs, to name just a few examples of advancements adding immense strain” to the grid, said ASCE’s report.
“An increase in electric vehicles and a rise in data centers will demand 35 GW of electricity by 2030 alone, up from 17 GW in 2022,” said ASCE. “This rapid acceleration, compounded by federal and state net-zero greenhouse gas emissions goals, means utilities will need to double existing transmission capacity to connect new renewable generation sources.”
The report noted that transmission investments rose by $5 billion from 2017 to 2022, and the 2021 Infrastructure Investment and Jobs Act includes funding for infrastructure elements like transmission buildout.
One IIJA investment, announced in 2023, is spending $1.3 billion on three interregional transmission lines across six states: the 175-mile Southline Transmission Project (New Mexico to Arizona); the 211-mile Twin States Clean Energy Link (New England to Quebec, Canada); and the 214-mile Cross-Tie Transmission Line (Utah to Nevada).
“The IIJA allocated $73 billion from 2021 to 2026 to modernize the electric grid, build thousands of miles of new power lines, and expand renewable energy,” ASCE said. “Much of the funding is dedicated to hardening [transmission and distribution] lines to be more resilient,” using measures like “undergrounding overhead power lines, implementing fire-resistant technologies, and replacing poles and other structures with stronger, more durable materials.”
The IIJA also “invested heavily in grid resilience,” ASCE said, with the law establishing a $10.5 billion Grid Resilience and Innovation Partnerships Program, one project of which is the Grid Innovation Program. The Grid Innovation Program is providing “$5 billion for [fiscal year 2022 through 2026] to support projects that use innovative approaches to transmission, storage, and distribution infrastructure to enhance grid resilience and reliability,” according to the Department of Energy.
However, ASCE said, state renewable portfolio standards and federal decarbonization initiatives are combining with surging energy demands and leading to “rapidly escalating funding needs in the generation and [transmission and distribution] sectors.”
“Even if funding levels established by the IIJA and [the Inflation Reduction Act] are reauthorized in 2026, the energy sector faces a $578 billion investment gap by 2033, which climbs to $702 billion by 2033 if the nation ‘snaps back’ to pre-IIJA/IRA funding levels when the bills expire,” the report said.
For the U.S. to raise its energy infrastructure grade, ASCE made recommendations that include the adoption of a federal energy policy designed to meet current and future technology changes; the development of a robust national transformer inventory; a national grid hardening plan; and a requirement for “energy providers to adopt the most stringent consensus-based codes and standards for all overhead T&D lines, structures, and substations to ensure safety and increase reliability.”
