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Despite the rapid advancements in renewable energy, the US electric grid remains outdated, with much of its infrastructure dating back to the 1960s and 1970s. This aging grid struggles to accommodate the growth of renewable energy, leading to bottlenecks and inefficiencies. Investments in transmission lines have lagged behind those in renewables, causing grid congestion and curtailing the potential of clean energy sources.

Developing transmission lines is a complex process that involves securing approvals from multiple counties, states, landowners, and regulatory agencies. The TransWest Express Transmission and the SunZia Transmission projects, for example, took multiple decades to develop and construct due to right-of-way disputes and environmental reviews. Unlike renewable energy projects that can be developed in a shorter time frame, transmission projects face numerous regulatory hurdles, leading to timing discrepancies between generation and transmission investments.

To improve grid congestion, governments can streamline permitting processes, reduce regulatory delays, and offer better financial incentives. Easing regulatory approvals and enhancing cost recovery can encourage developers to invest in transmission lines. Additionally, boosting regulated returns on equity (ROEs) for transmission projects can help grid developers capture a larger share of the financial upside, accelerating infrastructure development.

Aside from direct investments in grid infrastructure, investors can also capitalize on transmission bottlenecks by investing in energy storage projects. These systems can absorb excess renewable energy in congested areas and store it for later use, reducing curtailment and enhancing grid efficiency. Energy storage not only helps stabilize the grid but also supports the integration of more renewable energy sources. As AI-driven electricity demand and regional grid disparities persist, new investment opportunities arise in both transmission and energy storage.