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The Electric Grid in Transition
The United States has one of the world’s most reliable, affordable, and increasingly clean electric systems—a
system that powers its economy and provides for the well-being of its citizens. The U.S. electric system is at a
strategic inflection point—a time of significant change for a system that has had relatively stable rules of the
road for nearly a century.
The structure of today’s U.S. electric grid grew organically over the course of the last century (see Figure 3-1).
Historically, it was geographically based—with one-way flows of energy from central station generators, over
transmission networks, through substations to distribution systems, and over radial distribution circuits to
end-use customers.
Figure 3-1. The Electric Grid 1
Transmission Lines
765, 500, 345, 230 and 138 kV
Distribution
Lines
Subtransmission
Customer
26kV and 69kV
Primary Customer
13kV and 4kV
Generating Station
Generator
Set-Up
Transformer
Transmission
Customer
138 kV or 230 kV
Substation
Step-Down
Transformer
Secondary Customer
120V and 240V
Generation Transmission Distribution Customers
Six components comprise the grid: four physical components, including generation, transmission, distribution, and storage; the information
infrastructure to monitor and coordinate the production and delivery of power and operate the grid; and customer demand—the driver of power
system operation and investment. New storage technologies could be deployed throughout the power system in the future.
The U.S. electricity sector is influenced by a variety of new forces, some of which will affect the future growth
and management of the grid. Current drivers of change within the electricity sector include the growing use of
natural gas to power electricity generation; low load growth; increasing deployment of renewable energy and
the retirement of coal and nuclear generation; severe weather and climate change; and growing jurisdictional
interactions at Federal, state, and local levels. Innovative technologies and services are being introduced to
the system at an unprecedented rate, often increasing efficiency, reliability, and the roles of customers, but also
injecting uncertainty into grid operations, traditional regulatory structures, and utility business models.
The changing nature of grid operations, the implications of demand response and distributed generation
deployment at increasing scale, the introduction of other new technologies, and growing consumer interaction
with the grid are putting pressure on the regulatory boundaries that have evolved over the past century.
Resolving the institutional, regulatory, and business model issues that could enable the grid of the future will
help the United States take full advantage of the range of available energy sources and technologies that will
help meet its climate change goals. These sources and technologies include energy efficiency; energy storage;
carbon capture, utilization, and storage; electric vehicles; microgrids and other distributed technologies; and
nuclear, natural gas, and renewable energy generation. A positive resolution of these issues will also help
mitigate the growing vulnerabilities of the grid to cyber, physical, and climate change threats, as well as ensure
the grid’s reliability under its current institutional structures.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 3-3