The American electrical grid is a large and complex network of independently owned and operated power stations and transmission lines. Most of the infrastructure currently available was put in place in the 1950s and 1960s. Her now divorced age earns her a comment like this, on NPR:

“Too often the American power grid is interconnected with the highway system, a system that has been seriously neglected and is now being pushed to its limits with the demands of our growing and changing energy needs. As demand for renewables rises to combat the environmental ramifications of fossil fuels, the grid will continue to prove outdated and in need of reinvention.”

The Department of Energy estimates that electricity demand has increased by about 25% since 1990 while construction of transmission facilities has fallen by 30%. According to Media Red Herring Inc. US energy demand is likely to increase by 32% by 2015.

The grid failure in 2003 that affected the lives of more than 50 million people is an oft-cited example of the need to modernize the power grid in the United States. This is not only to deal with growing demand, but also to accommodate a new focus on renewable energy sources such as wind, solar and hydro: which cannot be easily connected to the existing grid without major renovation. The goal, of course, is to address energy security in the long term. However, opting for renewable energy and creating infrastructure such as “smart grids” requires significant investment.

The main objective of reducing power losses in the distribution process is the emergence of higher efficiency requirements for power and distribution transformers. Right now, transformers are responsible for a great deal of lost energy and this is where the DOE is introducing rules to increase efficiency. According to rules published by the Department of Energy, the cost of liquid immersed distribution transformers increases by up to 12%, but must reduce electrical losses by up to 23%. It can also raise the cost of medium and dry voltage transformers by up to 13%, but it should reduce electrical losses by up to 26%.

Although much of the energy-efficient technology is a bit more expensive, private and government-owned utilities are beginning to invest in it for the reliability it guarantees. Additionally, the initial investment more than pays for itself in the long run, due to the lower energy lost in the transmission and distribution system.