The U.S. power grid transformation faces a dilemma

Driven by rapid growth in electricity demand, the United States’ power system is under mounting operational pressure, and the U.S. power grid is nearing its maximum operating capacity. Not only does it struggle to effectively align energy production and consumption, but it also poses potential risks to energy security and economic operations.

Recently, the U.S. Department of Energy disclosed that it has already launched a grid upgrade initiative called “Spark,” aiming to boost power transmission capacity by accelerating interconnection and upgrading existing key transmission technologies.

Driven by rapid growth in electricity demand, the United States’ power system is under mounting operational pressure, and the U.S. power grid is nearing its maximum operating capacity. Not only does it struggle to effectively align energy production and consumption, but it also poses potential risks to energy security and economic operations. With limited grid capacity, it is becoming a key obstacle to U.S. energy production and use.

A stopgap measure cannot solve the underlying problem

The full name of the “Spark” plan is “to improve power transmission speed by accelerating interconnection and upgrading other key existing transmission technologies.” When the initial letters are combined, the acronym forms the word “Spark.” The plan consists of two parts: financing and execution of specific projects. Starting this June, the U.S. Department of Energy will lead an effort to complete large-scale financing totaling as much as $10.5 billion over five years. The first-phase financing will be $1.9 billion. The initial funding will be used to purchase high-capacity conductors to replace existing transmission lines, while also upgrading existing infrastructure—“squeezing” more space in two directions to increase grid capacity.

However, industry insiders have raised doubts, saying that directly building new infrastructure and replacing new transmission lines would have better results and could more effectively spur and promote the production, use, and development of U.S. energy and electricity. But the fact is that, from the time perspective, the U.S. is “out of time.” Building entirely new transmission lines takes 10 years or longer, while the current upgrade plan is a compromise after considering inputs from multiple parties. In addition, land partition in the United States is complex, and land-dispute issues will further drag out the timeline for entirely new construction.

A piece by Oil Price Network pointed out that the “Spark” plan behind the scenes reflects a reality that the U.S. power sector has long ignored: most of the U.S. power grid has been close to its maximum operating capacity for a long time. When public electricity demand surges during extreme hot or cold weather, operators typically can only rely on adjusting the available power output per megawatt to keep the system balanced as much as possible. Therefore, while simply replacing transmission lines to expand grid transmission capacity is not the best solution, it is already the fastest way to ensure that household lights across the United States stay on as usual.

Although the U.S. Department of Energy has not directly acknowledged grid “vulnerability” in public statements, its policy language repeatedly emphasizes keywords such as “rapid deployment” and “improving reliability,” indirectly reflecting the urgency of the problem. U.S. Energy Secretary Chris Wright said that in recent years, electricity demand in the utilities sector has grown rapidly; the “Spark” plan will help enhance the reliability and economic efficiency of energy production, use, and consumption, and is a solid step for the United States to modernize the power grid. Catherine Jerriesa, Assistant Secretary for Electricity at the U.S. Department of Energy, said that the “Spark” plan is intended to increase grid capacity and the day-to-day safety of electricity use.

Rising demand and delayed transition highlight the contradictions

Amid the global trend toward energy transition, the main purpose of upgrading power grids in countries around the world is to reconcile the contradiction between surging electricity demand and the volatility, intermittency, and randomness of renewable energy supply. Most countries face a problem of absorbing “green power.” However, it can be said that upgrades to the U.S. power grid have little to do with the development of the renewable energy industry or with the energy transition.

According to the latest data released by the U.S. Energy Information Administration, in 2025, the total installed scale of U.S. solar power generation was 358 megawatt-hours, up 25% year over year, compared with the 28% increase in 2024. Over the past year, the deployment of U.S. solar power projects has been slow. Against the backdrop of steadily growing electricity demand and national policies that are complex and changeable, the United States has struggled to meet its established renewable energy development targets.

The U.S. Energy Information Administration noted that the pace of development of the U.S. renewable energy industry and the energy transition is insufficient to support the current growth in electricity demand. The data show that from 2005 to 2021, U.S. electricity demand increased cumulatively by only 1%, but since 2021, this figure has jumped significantly to 8.7%. In this situation, the U.S. has had to rely on fossil energy to fill the electricity gap, leading to an increase in both the scale of electricity generation from fossil fuels and overall emissions.

Under the dual effects of rapid electricity demand growth and insufficient progress in the energy transition, contradictions within the U.S. energy system continue to accumulate. On the one hand, accelerated growth in electricity demand places higher requirements on grid operations; on the other hand, the lagging development of renewable energy makes it difficult to form effective support. This structural imbalance creates even more severe real constraints for the U.S. energy transition.

Delaying green power projects and undermining investment confidence

The impact of the grid has moved from the operations level to the level of industrial development. Although growth in U.S. renewable energy installations is limited and has not caused a greater shock to the grid, aging grids are restricting the development of renewable energy projects.

Alon Mashkovich, CEO of enSights, a software supplier for energy management businesses, said that grid congestion limits the value that renewable energy assets can provide, creating development pressure for companies participating in renewable power generation projects. “This is both a business problem and a technical problem.” Alon Mashkovich said, “At present, many renewable power generation projects in the U.S. have already been built, and they are just waiting to connect to the grid. But because of grid congestion, the number of renewable power generation projects allowed to connect to the grid has been forced to be cut. Many investors and operators have had to face the predicament of investment failure.”

Alon Mashkovich believes that the issue of grid congestion in the future will persist in the United States. Currently, solving the grid congestion problem comes at the cost of slowing the development of renewable power generation projects. This not only fails to resolve the problem at its root, but also drags down the U.S. energy transition process.

By | Dong Zitong, Reporter

Produced by | China Energy News (cnenergy)

Editors | Li Huiying