America’s energy infrastructure is reaching a tipping point. Following two decades of relatively flat demand, electricity consumption is now growing rapidly thanks to the electrification of our economy, reshoring of manufacturing, and expansion of data centers.

According to Grid Strategies, US peak load is projected to grow by 166 gigawatts between 2025 and 2030, the equivalent of adding 15 times the peak load of New York City by 2030.

A generational shift for the power sector

Data centers represent roughly half of projected demand growth, but aging electric grid infrastructure, power plant retirements, extreme weather events, and other systemic issues are also responsible for a strained grid and electricity prices that rose more than twice the rate of inflation last year.

America needs energy policy that addresses these challenges. ITI has issued energy policy recommendations that call on the tech industry and government to partner to modernize the grid while ensuring ratepayers get both innovation and affordability. We also support several bipartisan proposals in Congress that are consistent with these recommendations.

While critical, longer-term efforts are underway to streamline permitting processes and build large-scale generation and transmission infrastructure, we must also address the immediate challenge at hand. We need scaled deployment of commercially available, modern tools that can unlock transmission capacity and optimize real-time grid operations right now.

Modern tools for a 21st century grid

Grid-enhancing technologies (GETs), advanced conductors, AI-enabled grid software, and flexibility solutions like battery storage and virtual power plants (VPPs) enable better use of the existing grid without the large investments of time and money needed for new generation and transmission assets. Improved existing grid utilization could save consumers more than $100 billion over the next decade.

These tools are working in targeted deployments. Advanced conductors, which can be deployed using existing rights of way, have demonstrated increased capacity, higher efficiency, and less thermal sag compared to traditional transmission wires. Montana-Dakota Utilities unlocked 40 percent cost savings and reduced line losses by 20 percent in a reconductoring project.

Dynamic line rating (DLR) technology utilizes sensors and real-time conditions like ambient air temperature, wind, cloud cover, and precipitation to determine actual line capacity (instead of fixed assumptions). A DLR pilot project conducted between Avangrid and LineVision in New York on two transmission lines found an average capacity increase of 20 percent and 14 percent, respectively.

VPPs orchestrate distributed energy resources in homes and businesses so when electricity demand spikes, automatic discharge of local batteries or adjustments to smart thermostats in aggregate reduce grid stress and free up capacity.

Last month, Google signed a first-in-kind agreement with Voltus to unlock up to 100 megawatts of new capacity in PJM through a Google-funded VPP. Sunrun, Tesla and Renew Home also announced an agreement to deliver nearly 17 gigawatts of capacity by orchestrating hundreds of thousands of home battery systems and over eight million smart thermostats and devices.

Regulatory and policy enablers are needed

These tools can make an important difference, but we need a policy and regulatory framework that more effectively drives their adoption. Despite being commercially available today, barriers are keeping these technologies from deploying at necessary scale, from misaligned incentives for utility investments to lack of familiarity with some new technologies among regulators and the broader workforce to justify associated upfront costs. Industry should encourage government partners to take action to overcome these barriers.

The Federal Energy Regulatory Commission (FERC)’s recent show cause orders to accelerate the integration of data centers and other large loads onto the grid are a major regulatory step forward. The orders directed the six regional grid operators to evaluate alternative transmission technologies like DLR, advanced conductors, and advanced power flow control devices to satisfy large load transmission service needs and justify in detail when they choose traditional technologies instead.

Further, FERC directed the regional grid operators to provide new transmission services for flexible large loads. This is progress, but we need much more.

Public-private partnerships between government and industry can also unlock scaled investments in modern tools to bridge the gap while larger infrastructure projects are developed. Government programs should support initial pilots, produce implementation playbooks, and provide technical assistance to regulators and utilities.

This includes expanding initiatives like the Department of Energy’s SPARK program, which supports reconductoring and other upgrades with advanced transmission and smart grid technologies.

Rapidly growing energy demand and an aging grid are a generational challenge. Either we will define the moment, or the moment will define us. It’s imperative that policymakers advance frameworks to ensure it’s the former.