Why every leader should get behind grid modernization

Read the article here: https://www.fastcompany.com/91441607/why-every-leader-should-get-behind-grid-modernization

America’s power grid is about to buckle under the strain of energy demands from digital infrastructure such as AI data centers, electrification, and industrial manufacturing. While energy may account for just 7% of America’s GDP, former FERC Chair Mark Christie claims, “it’s the foundational seven percent, everything else in our economy and lifestyle flows from it.” 

Between grid overload and extreme weather, sudden power outages cost the U.S. economy an estimated $150 billion per year. The 2021 Texas freeze alone inflicted $130 billion in losses from property damage, lost business, and cascading supply chain disruptions.

We face a simple reality: Our 20th-century grid wasn’t built to support a 21st-century economy. We need leaders who will step up and demand that we upgrade U.S. grid infrastructure—because without a modern, robust grid, our economy, national security, and global standing are at serious risk.

DEMAND IS SURGING AND THE GRID’S NOT READY

According to the latest forecasts, electricity demand is expected to rise sharply over the next few decades, increasing by over three-quarters (78%) by 2050. Electrification and AI have already begun to blindside grid planners. Major utilities report load forecasts five times higher than in 2023, driven by the opening of hyperscale data centers across states like Virginia and Texas.

We can’t afford complacency while demand grows, extreme conditions escalate, and our rivals invest in modernization. While our legacy infrastructure works today, we’re vulnerable to foreign supply chains, and our system is strained by transmission bottlenecks, permitting delays, and a shortage of skilled workers. We’re struggling to deliver power The gap between what our industries require and what the grid can deliver is growing.

We need to change direction, collectively. But change doesn’t happen without a catalyst. Business leaders often think their technology will create its own demand. But there needs to be a catalyst for change. I would argue that these converging pressures are creating a catalyst like we’ve never seen before. True leadership requires seeing around corners and investing in solutions today.

HOW WE GET THERE

The energy revolution we need goes beyond adding more wind turbines and solar batteries. It demands a complete reorg of grid architecture, technology, and management. We need to move from analog to digital thinking. A digital, AI-enabled grid can slash technical losses, enable real-time balancing of supply and demand, and support clean power at scale. New and refreshed technologies, such as grid-enhancing technology (GETs), fusion, and advanced nuclear, need to be part of the solution.

But modernization is complex. Without a collaborative, stable foundation built through public-private partnerships, investments in new technology, grid permitting reform, and strengthening our U.S. workforce, manufacturing, and supply chains, we will never get there.

LEAD BEFORE THE NEED

Across the U.S., nearly 75% of the country’s 35 leading utility companies have reported data centers are demanding more electricity, a demand that will continue to climb. Industry leaders need to make big moves and take bold bets. Investments in grid resilience show a high ROI. A $1 investment in preparedness can yield up to $6 in savings by reducing lost economic activity and recovery costs.

Visionary leaders are already partnering across sectors to reduce constraints to modernization and strengthen our talent pipeline. Microsoft and Google are taking on risk and working with utilities and start-ups to pave the way for innovative energy projects, with companies like Commonwealth Fusion Systems, Antora, and Helion, building domestic solutions, supply chains, and workforce capacity well before full-scale commercial fusion, thermal storage, or grid-scale batteries are the norm.