Growth in Power Grid Projects Presents Opportunities for Manufacturers
By Katie Klaber
Last week, the Biden-Harris administration announced an effort to fund $3.46 billion in the U.S. power grid. These funds will support 58 projects across 44 states for the purpose of improving the reliability of the electric grid. Additional aspects of the announcement include 35 gigawatts of new renewable energy brough online, investments in 400 microgrids. This funding is part of a broader $10.5 billion Grid Resilience and Innovation Partnerships (GRIP) program.
In the Clean Energy Manufacturing project’s footprint, a Pittsburgh-based project is identified in last week’s announcement for Duquesne Light Company to “enhance system capacity to unlock clean energy generation and meet targets established in the State’s Climate Action Plan while also mitigating customer cost increases, growing high-quality job opportunities and training, and boosting equitable access to clean energy.”
Elsewhere in Pennsylvania, in the southeastern part of the state PECO Energy Company will “increase grid reliability and resilience through substation flood mitigation, upgrading underground monitoring and control technologies, deploying battery systems for backup power, replacing aging infrastructure, and installing advanced conductors to increase grid capacity.” In eastern Pennsylvania, PPL Electric Utilities Corporation will “integrate distributed energy resources and enable real-time grid control to reduce outage duration and frequency, create more than 200 new jobs, and boost electric service reliability for more than 800,000 people.”
Whereas no Ohio and West Virginia projects were referenced, projects were identified in Georgia, Louisiana, Michigan, Oregon, as well as a broad interconnection study across midwestern states and a wildfire resilience work in the western US. Earlier this year, DOE announced $95 million in federal funds to harden energy grids in Hawaii.
The International Brotherhood of Electrical Workers (IBEW) were citied in the Department of Energy press release as being partners in a majority of the projects announced.
These federal funds represent a fraction of what could be required if 2040 net-zero emissions goals were to be reached. Also last week, the International Energy Agency (IEA) issued a report on the grid investment that is needed to carry additional renewable energy – requiring the world to spend $600 million per year on grid upgrades in the near term. The report states that 49.7 miles of transmission lines would have to be built or replaced to meet net-zero goals. The Wall Street Journal calculated that to be enough to wrap around the planet 2,000 times!
What does this all mean for our region’s manufacturers? Lots of materials and parts are required for these grid upgrades. Whereas most of the metals – copper and aluminium – are the major components of the power lines, there will be a need for tens of thousands of extra power transformers to adjust the voltage along the lines. Transformers are made of specialized steel and smaller transformers require non-oriented electrical steel, both of which are in short supply due to their demand in electric vehicles. However, many other transformer parts and the assembly of these units will see growth opportunities with these federally funded projects. Insulators, such as cross-linked polyethylene and ethylene-propylene polymers will also be needed.
Any manufacturer supplying parts to the major components of the power grid, as well as to the infrastructure that supports it, will have an increase in potential business with last week’s announcement and the many other grid modernization projects now underway across the nation and internationally.
Power Grid Components