Transmission grid operators aren’t just transporting the electricity that lights up people’s homes and streets. They’re fueling the growth of the entire economy. After all, economic growth always comes down to energy, and the transmission grid is the backbone of any modern economy.

Building a new city? You need the grid. Powering electric vehicles? You need the grid. Deploying data centers or artificial intelligence to create new efficiencies? You need the grid. The list goes on.

Those of us who work in the industry know that there are looming issues facing rate-payers and continued economic growth, as power grids across the U.S. are struggling to keep up with the increasing demand. Massive electrification of the economy combined with extreme weather incidents are pushing power grids to their limits. And the challenges will only continue to grow: according to a report from the U.S. Energy Information Administration (EIA), global electricity demand is anticipated to climb by about one-third to three-quarters by 2050.

To solve this, we need to build a lot more transmission lines : however, this cannot be the only solution. Transmission lines cost billions of dollars and take 10 years or more to complete. If we are to keep rates within acceptable limits while meeting current load growth, we need to optimize the use of the existing grid using grid-enhancing technologies.

According to the DOEs Liftoff report, grid-enhancing technologies, such as Dynamic Line Rating (DLR), can reduce congestion costs by 25-50%, providing rate-payers in the U.S. with $5 to 10 billion (USD) in annual cost savings. New technology combining software and sensors can unlock 30-40% of untapped transmission capacity of existing transmission grids. Historically this untapped capacity has not been used, but now, the U.S. government is stepping in to ensure that utilities start utilizing parts of this capacity by mandating Ambient Adjusted Ratings (AAR) on all transmission lines.

However, we need to do more and unlock the full potential through DLR because consumers and the economy can’t wait for more capacity–nor do they need to.

Getting more out of existing infrastructure

In order to completely understand the landscape, we need to understand what capacity-unlocking technologies are available to utilities. These technologies generally provide AAR or DLR typically, taking the form of either software or physical sensors. Their goal is to measure the safe levels of electricity that can be transmitted through the power lines.

Safe transmission, however, depends on several factors, which historically have not been measured. Instead, grid operators have mostly operated their grids through seasonal or static line ratings. These rigid estimates typically account for fixed weather, wind and other conditions for a block of time – typically a full quarter or season. In other words, they don’t account for actual conditions that affect the capacity, minute-to-minute, day-to-day or even week-to-week. Instead, they ensure safety by relying on a highly conservative common denominator that results in a whole lot of untapped potential for increased transmission.

Needless to say, they also don’t account for the variability experienced at different points on a line, such as lines that cover different altitudes, fall in the path of wind farms or span different microclimates. AARs and DLRs differ from these conservative line ratings by taking into account more environmental variables at a much higher frequency.

AARs are often adjusted daily or hourly by assessing ambient temperature, typically assigned from software. DLRs, by comparison, are derived from sensors that collect real-time data about every single factor that affects transmission capacity at multiple points on a given line, including hyper-local weather conditions, air temperature, wind speed, current, voltage, line angle, sag and more.

Both of these more advanced ratings naturally enable a more complete picture of what’s happening on and/or around the line, so operators can assess the actual capacity with higher accuracy than before. Unsurprisingly, when their assessments are based on real conditions, rather than estimated ratings that prioritize safety through inaccuracy, they discover that their transmission capacity typically is significantly higher than they realized.

While both DLRs and AARs are vast improvements over static ratings, the differences between the two are stark. DLRs offer a far more holistic and precise view of line conditions than AARs, but upcoming government regulations aren’t looking to make DLR the standard yet.

Government regulations and incentives don’t reflect the actual potential for increased capacity

Recent regulations have shown governments’ willingness to intervene, requiring transmission operators to adopt technologies that enable at least AARs by July 2025. Current efforts, such as the FERC Order (881) in the United States, however, don’t require operators to meet their full potential, as they only require them to implement AAR, rather than DLRs.

While FERC regulations are a step in the right direction, there are solutions in the market that bypass the potential gains of AAR by a significant margin.

Members of Congress are already seeing that regulators need to step in more to ensure that grid operators are doing enough to alleviate upcoming demand, calling for “shared savings” incentives. This incentivizes new infrastructure, but again, distracts grid operators from realizing the current potential.

Utilities can fuel the economy and keep costs low with better technology

DLR technology is already readily accessible and can go beyond what regulations like the upcoming FERC Order stipulate, and we should be preparing and encouraging grid operators to adopt them immediately, for the sake of economic growth. There is no time to waste and focusing only on building new power lines or focusing exclusively on AAR technology is not going to get us to where we need to be.

Real-world case studies have shown that DLR sensors can increase transmission capacity in power lines by over 40%, while AAR software is limited to increases in the ballpark of 4-10%. For instance, Minnesota-based Great River Energy recently conducted a pilot program with DLR sensors and saw an average possible increase of more than 40% on the line in question. Different geographical areas with different altitudes, fluctuating temperatures and high winds, can have an even bigger impact on the increase that could be derived.

While installing sensors through a grid may seem like a high initial cost, it would be just a drop in the bucket for grid operators, especially when compared to the costs they would face building completely new lines. There is an even larger opportunity cost of not installing these new technologies and enhancing grid performance when taking into account the economic growth that physically can not happen without it.

Looking ahead

Grid operators are going to be under an increasingly intense microscope as time goes on. The U.S. economy is going to be straining at the seams, potentially only held back by how fast we can transfer more electricity. As economies find new outlets to grow, infrastructure costs will continue to skyrocket, but utilities can’t be the ones holding progress back.

We now have the time to prepare for the massive spikes in energy demand that we know are coming, and can’t waste the opportunity to grow where we can. Governments are in the unique position to stipulate this essential technology, to encourage widespread adoption. In the meantime, utilities need to explore the entire suite of solutions available to them to make sure they won’t be left behind.