Why US power transmission needs reinventing

The current state of the US grid is characterised by a defining contradiction: while electricity demand is growing at a pace unseen since the turn of the millennium, high-voltage completions in the 2020s are running at half the rate of the 2010s. 

With the help of data and intelligence from our Lens Power & Renewables Americas platform, Wood Mackenzie’s expert US analysts have assessed the current state of US power transmission. Their findings will be of interest to stakeholders across the power value chain, from developers, utilities and large-load consumers to banks and other providers of capital. The full report is only available to subscribers, but below we offer a brief overview of the challenges facing the US power sector. 

A defining contradiction: unprecedented demand growth meets severe underbuilding 

After more than two decades of more-or-less stagnant demand, US power grids are set to experience almost unprecedented structural growth over the coming decades. By the end of the 2030s, data centres alone will account for 20% of total US electricity demand, with other large loads, electric vehicles and broader electrification adding further pressure. 

Having been systematically underbuilt for over a decade, the transmission network that will need to underpin this growth is ill-prepared for the task, however. In fact, the average length of high-voltage transmission lines (i.e., lines operating at 230 kilovolts and above) completed during the 2020s is less than half the average completed each year in the 2010s. 

Barriers to buildout are driving up costs and exposing structural gaps in grid capacity 

The reasons for the ongoing lack of transmission buildout are mainly bureaucratic rather than technical. Progress has been stalled by systemic failures, including disputes regarding cost allocation, fragmented permitting, reactive planning, misaligned incentives for utilities and weak interregional coordination.  

The failure to build enough transmission capacity results in congestion delays and cascading costs across the value chain. With projects taking an average of three years to secure an interconnection agreement, renewable curtailment is rising and congestion costs now exceed US$10 billion per year. 

Despite federal reforms and transmission provider commitments, significant challenges remain 

The Federal Energy Regulatory Commission (FERC), which sets the rules for the US power sector, is faced with the difficult task of incentivising investments while ensuring reasonable rates for customers. Its Orders 1920 and 2023 represent significant attempts to reform power transmission. The US$100+ billion pipeline for transmission development across plans announced by Independent System Operators (ISOs) and Regional Transmission Organisations (RTOs) is also positive, demonstrating a real commitment to build. However, with many of the core issues still unaddressed, execution risk remains high. 

Grid-enhancing technologies offer respite but are not a long-term solution 

In March 2026, the US Department of Energy announced its US$1.9 billion Speed to Power through Accelerated Reconductoring and other Key Advanced Transmission Technology Upgrades programme (‘SPARK’). SPARK prioritises grid-enhancing technologies (GETs) including dynamic line rating (DLR), topology optimisation, advanced power flow control (APFC) and static line uprating. These technologies provide a bridge solution to optimise the existing grid; however, they complement new transmission rather than replace it. 

Complete the form on this page to download a selection of slides from the report that explore these issues in more detail.