Why this article?
The Power Sector is going through some major changes, globally. I’m more familiar with the US where Natural Gas is killing Coal as the primary fuel of choice, and improving Wind Energy economics is ruining the Natural Gas party. In this royal rumble the Transmission & Distribution sector – how all that juice really gets to us – is often overlooked. Because it’s boring. But boring assets and good investments aren’t mutually exclusive categories.
The Power Transmission and Distribution network – The Grid – needs a major shot in the arm. There are 3 main reasons:
- In the US, The Grid is old – really old. Most of it was built more than 50 years ago, with minimal investments and replacements for the last 35 years or so.
- In much of the developing world, The Grid needs serious expansion. People, on average, are getting richer and are demanding more power.
- The proliferation of Wind Energy and other Renewables into The Grid is a game-changer. This creates some technical problems, especially when combined with #1 in the US.