The American Society of Civil Engineers (ASCE) has warned that growing energy demand in the U.S. is straining an already aging electric grid. This has led the organization to lower the energy sector’s rating in its 2025 Infrastructure Report Card to a D+, down from C- in 2021.
ASCE highlighted several significant challenges, including a shortage of distribution transformers, increasing severe weather occurrences, and insufficient transmission capacity. Meanwhile, the reliance on various technologies such as data storage facilities, artificial intelligence, and electric vehicles (EVs) is placing additional demands on the grid.
The report notes that the demand for electricity from electric vehicles and data centers is expected to soar to 35 gigawatts (GW) by 2030, a sizeable increase from 17 GW in 2022. This rapid growth, combined with federal and state goals for net-zero greenhouse gas emissions, will require utilities to double their current transmission capacity to accommodate new renewable energy sources.
Between 2017 and 2022, investments in transmission increased by $5 billion. The 2021 Infrastructure Investment and Jobs Act (IIJA) includes funding aimed at enhancing transmission infrastructure. One significant initiative announced in 2023 includes a $1.3 billion investment for three interregional transmission lines spanning six states.
This IIJA is set to allocate $73 billion from 2021 to 2026 for modernizing the electric grid, constructing thousands of miles of new power lines, and boosting renewable energy efforts. A major focus of this funding is to strengthen transmission and distribution lines, making them more resilient to challenges like extreme weather.
Additionally, the IIJA has placed considerable emphasis on grid resilience, establishing a $10.5 billion program aimed at innovation in grid infrastructure. This includes a specific initiative, the Grid Innovation Program, which is set to provide $5 billion between 2022 and 2026 for projects that enhance the grid’s reliability and resilience.
However, ASCE has expressed concerns regarding the combined pressure from surging energy demands and federal decarbonization initiatives, which are leading to significant funding needs in both generation and transmission sectors. They estimate that the energy sector will face a $578 billion funding gap by 2033, potentially increasing to $702 billion if federal funding levels revert to pre-IIJA levels after 2026.
To improve the U.S. energy infrastructure score, ASCE recommends creating a federal energy policy that accommodates evolving technologies, developing a comprehensive national transformer inventory, implementing a national grid hardening strategy, and ensuring that energy providers adhere to the strictest safety and reliability standards for transmission lines and substations.