FT: US high-voltage transmission construction falls to a quarter of its level a decade ago
Authority divided among communities, states and the federal government, with litigation adding obstacles
The United States is pressing ahead with the construction of artificial intelligence (AI) data centers but faces difficulties as construction of the transmission lines needed to supply them with electricity proceeds more slowly than expected.
The Financial Times (FT) reported on November 3, local time, that US grid construction had fallen to a quarter of its level a decade earlier. It said the resulting construction delays and rising costs were expected to hamper the country's AI ambitions.
Construction of high-voltage transmission lines has declined sharply. About 6,400 km were built in 2013, but the figure fell to less than 1,450 km in 2024.
Building a major transmission line takes an average of 10 years, twice the time required to build Hoover Dam in the 1930s.
A prominent example of delay is the 164 km Cardinal-Hickory Creek transmission line, which carries electricity from wind farms in Iowa to Middleton, Wisconsin. The line crosses the Mississippi River and passes through a national wildlife and fish refuge. Even after approval by local authorities in 2011, finding a suitable route, completing an environmental impact assessment and dealing with multiple lawsuits meant construction took 13 years. Costs also rose 40% above the original budget.
Krista Tanner, chief executive of ITC, which led construction of the transmission line, said, “We are competing globally right now. Whether it is AI or advanced manufacturing, the central question is whether we have the infrastructure to build it, and I worry that increasingly the answer will be no.”
US energy use barely increased over the past 20 years, but the emergence of AI has changed the situation.
Consultancy Grid Strategies expects electricity demand to increase by 166 gigawatts (GW) by 2030. That is equivalent to adding 15 cities the size of New York City.
This has prompted investment in new electricity generation, from building new nuclear power plants to attempts to restart aging coal plants, but generation alone is not enough. Transmission networks are also needed to deliver electricity where it is required. Much of the US grid was built during the construction boom of the 1960s and 1970s and is now approaching the end of its service life.
Infrastructure bottlenecks are not unique to the United States, but projects there are more frequently delayed because authority is divided among multiple bodies. There is no single institution that can oversee the planning and execution of large projects spanning multiple regions. State governments are adept at creating regulations but less effective at getting facilities built.
By contrast, China, a competitor in AI, has built more transmission lines over the past 15 years than the United States has built in its entire history. The Chinese government can centrally plan and direct infrastructure development, while in the United States authority is divided among utilities, landowners, grid operators and regulators at both the state and federal levels.
Ari Pesko, director of Harvard Law School's Electricity Law Initiative, said, “For more than 100 years, we have been able to supply electricity to the industries driving growth. If we can no longer do that, we will lose our economic vitality.”
Decentralization has traditionally been a source of US economic strength. With authority distributed among states, cities, businesses and civic institutions, local leaders found solutions suited to their regions. Population growth and new jobs encouraged innovation and investment, and successful ideas often spread nationwide.
But this decentralization becomes a weakness when projects begin crossing regional or state boundaries. An approach that worked in one city may be difficult to apply unchanged in another region or state.
The US electricity system illustrates these complex relationships.
Utilities and private developers own and develop infrastructure, while regional grid operators coordinate power flows and identify transmission needs. State regulations affect what utilities can build and the rates they can charge, while the Federal Energy Regulatory Commission (FERC) sets rules for regional planners.
Responsibilities and interests diverge across these institutions, leading to disputes over whether a particular transmission line is needed and who should pay for it.
Utilities often oppose long-distance transmission lines that could open their local electricity networks to cheaper power from other regions. The seven US regional grid operators rarely jointly plan large interregional transmission projects. States pursuing environmental goals may oppose transmission lines that would bring electricity generated by coal plants into their areas.
Chaz Teplin, who leads the Carbon-Free Electricity program at think tank RMI, said, “We often think political boundaries matter, but the actual grid boundaries do not align and overlap in complicated ways. So who has decision-making authority? A great many stakeholders are involved.”
Even agreement among the parties does not guarantee that a transmission line will be built. Federal regulators require regional grid operators to identify future infrastructure needs, but those operators cannot compel companies such as ITC to build transmission lines.
Advait Arun, a senior fellow for capital markets at the think tank Center for Public Enterprise, said, “You can require sufficient consideration of which transmission lines should be built. But the system does not allow anyone to compel their actual construction.”
Litigation can also delay transmission construction.
Of 18 related lawsuits examined by the Niskanen Center think tank, 16 were ultimately dismissed or ended in defeat for the challengers. But the accumulation of lawsuits delayed construction by years. According to the Niskanen Center's analysis, more than a quarter of major US transmission projects that underwent federal review between 2010 and 2020 were delayed or canceled because of opposition or litigation.
Ben Arling, co-founder of data center developer Monarch Energy, warned, “The data center construction boom depends on securing electricity. Being told that power will only be available in 10 years is effectively the same as being told it is unavailable.”
Original Korean article: Yonhap News
English brief by Korea Wind Intelligence, koreawindintel.com
