Axios Pro Exclusive Content

Utilities shift to modernizing electric grids

Data: Wood Mackenzie Grid Edge Service; Chart: Axios Visuals
Data: Wood Mackenzie Grid Edge Service; Chart: Axios Visuals

Electric utilities plan to invest a record $5.9 billion to modernize their grids next year, but the bulk will be spent on reinforcing existing infrastructure.

Why it matters: Grid planners have adopted a bunker mentality in the face of recent extreme weather and catastrophic outages, and that's good news for the startups working to upgrade grid assets.

What's happening: Spending on grid upgrades will jump 71% this year alone, per a Wood Mackenzie analysis of 25 investor-owned utilities in the U.S.

  • Those utilities plan to allocate nearly half of their investments toward resilience measures such as hardier poles and wires.
  • A comparatively smaller share is allocated toward deploying and managing distributed energy resources like solar, wind and battery storage — the "DERs" referenced in the chart above.

Be smart: Distributed resources make a grid more resilient. Decentralized systems are less prone to full-scale outages, and devices such as advanced meters enable utilities to remotely monitor and reduce demand in real-time.

Plus: Utilities are spending differently based on where they're located. The storm-battered Southeast is putting more money toward grid hardening; the supply-constrained Northeast is prioritizing advanced meters.

Between the lines: Keeping the lights on is a utility's central mandate — and for investor-owned utilities, a sure way to keep its shareholders happy.

State of play: The move to prioritize resilience is good news for the startups working squarely in that area. They include:

Go deeper