A Golden Opportunity
Christine Oumansour is a partner in Oliver Wyman’s Energy Practice, where she specializes in advising the utilities sector on an array of operational matters.
Curt Underwood is a partner in the Energy Practice, where he leads the firm’s work with the utilities sector in North America.
Gerry Yurkevicz is a partner in the Energy Practice, where he specializes in helping utilities with an array of matters related to organizational transformation.
Todd Bowie is an engagement manager in the Energy Practice, where he specializes in helping utilities with an array of matters related to organizational transformation.
To say that the United States has an aging electric transmission infrastructure is a sizable understatement. The average age of the installed base is forty years old, with more than a quarter of the grid fifty years old or older.
While the system's sheer longevity is a testament to the engineering expertise of our forebears, that aging infrastructure is long overdue for a major overhaul. No evidence makes that statement more apparent than two years' worth of wildfires that charred large swaths of the state of California — several of which were thought to be caused by sparks from equipment well past its expected useful life.
But rather than see this as a crisis, utilities need to consider modernization a golden opportunity to unite public officials, consumers, and the industry on a common quest to reimagine transmission.
The industry needs to do more than replace what's there, and the price tag for the work will be sizable. Because of the rapidly increasing supply of renewable power and expectations for new demand from electrification, the grid will need to change, becoming more decentralized while supplying substantially more power.
Over the next three decades, we estimate that upward of a hundred and forty thousand miles of transmission lines will come due for replacement. To simply upgrade this infrastructure and maintain the status quo would require an investment of more than seven hundred billion dollars, by our calculations.