The American Society of Civil Engineers (ASCE) has released Failure to Act: Closing the Investment Gap for America’s Economic Future, which is a 2016 update to 2013 report Failure to Act: The Impact of Infrastructure Investment on America’s Economic Future. The report estimates that there is a $1.4 trillion investment gap in infrastructure in the next decade 2016 to 2025.
|Roads, bridges, transit and commuter rail||$1.1 trillion|
|Water and wastewater||$105 billion|
|Ports and inland waterways||$15 billion|
Most of this gap is in roads, bridges, transit and commuter rail infrastructure, estimated at $1.1 trillion. Most of the remaining gap lies in electricity ($177 billion) and water and wastewater ($105 billion) infrastructure.
|Total requirements||$934 billion|
The average annual investment gap for electric generation, transmission and distribution through 2025 is expected to decrease from $21 billion to $18 billion with a cumulative investment gap of $177 billion through 2025. This does not include the potential impact of the 2015 Clean Power Plan because court action has deferred the earliest possible implementation to 2017.
The U.S. electric power grid includes 5,800 major power plants and 450,000 miles of transmission lines plus many smaller generation facilities and local distribution lines. The estimated gap is 22% due to generation, 24% for transmission and 54% for distribution infrastructure.
Compared to the gap estimate made for the initial Failure to Act series, the cumulative shortfall in funding for generating facilities is expected to be much smaller. This is due to improvements in the availability of generating capacity in the short-term and decreases in the rate of demand growth predicted by the North American Electric Reliability Corporation.
Transmission and distribution
Transmission and distribution are expected to have slightly larger cumulative gaps than the original reports predicted. This is the result of an increasingly decentralized generation network, which requires additional transmission capacity for load balancing and resiliency.
Distribution investments are required to maintain the existing power networks. Investment is also required to make the grid smarter to increase efficiency, optimize power flows and address growing customer requirements including increasing power being generated by customers.
If the gap is not resolved, the impact is expected to be a loss of reliability in electricity supply. This leads to direct costs to households and businesses. Without significant investments, failure of aging equipment could lead to longer lasting, more widespread losses of power.
Unreliable electricity service carries significant costs associated with power outages. The average outage cost per short-duration power interruption is estimated to be $2,600 to $6,600 for industrial firms and $900 to $1,700 for commercial firms. As costs to households and businesses associated with service interruptions rise, it is estimated that GDP will fall by a total of $819 billion by 2025 and that the U.S. economy will provide an average of 102,000 fewer jobs than it would otherwise have by 2025.