Today, everyone’s appreciation and enjoyment of life hinge on electricity’s low cost and reliable availability. Electricity, delivered directly from generating stations or by means of battery storage, provides us with home comfort through lighting, heating, cooling, and appliance operation, as well as communication and entertainment equipment through smartphones and tablets.
The dependency on electricity, deep and addictive already, will only grow stronger given the new and distant horizons where ‘green’ concerns and innovative technology are pointing.
The construction sector, both in terms of its demand outlook and better productivity prospects, has a huge stake in where the tidal wave of greater electricity usage will flow next.
Construction activity during the last several years has been dominated by megaprojects, the name given to undertakings of a billion dollars or more each. Two categories of megaprojects have obvious close ties to electric power.
Consider the auto sector first. The big domestic and international car and truck assemblers have been racing to convert their production platforms to hybrid or pure electric vehicles. In complementary fashion, this has meant billions of dollars being invested in supplier battery plants.
While EV financial purchase incentives may be reeled in under the new GOP administration in Washington, the underlying push for a cleaner environment through the eventual abandonment of internal combustion engines (IOCs) will not simply go away.
To the extent that it does diminish, the U.S. will find itself out of step with the rest of the world, an ill-advised strategy versus what is transpiring in other countries. In Europe, a quarter of the new cars sold at present are electric; in China, the share has risen to half, and the low-end cost of an individual passenger car is as little as $10,000 USD. In the U.S., the proportion of EV sales to total is approaching 10%.
There’s a paramount need for more recharging stations along the nation’s roadway ribbons and for the provision of more power capacity through downtown infrastructure, often located underground, so that retail, office, and condominium sites can refresh vehicles through what might be termed functional parking.
Second, there’s a digital world that’s being overlaid on our physical world and it all runs on circuitry that only operates properly thanks to electric current. The cornerstone industry is comprised of computer chipmaking firms, which serve customers making everything from the smallest devices to rocket ships in the burgeoning space sector.
Where once these companies were firmly based in the U.S., they were allowed to slip away to foreign climes, especially Taiwan. Now, there’s a concerted effort underway to restore related jobs and investments, reinforced by the CHIPS and Science Act. The result, once again, has been nonresidential construction work initiated on enormous facilities worth tens of billions of dollars in many locations across America, with Texas, Arizona, and Ohio among the states in the forefront.
In a closely related field are the enormous data centers being built to handle cloud storage and everything else, from blockchain accounting to cryptocurrency mining. The already immense electric power demands of these sites are now being vastly increased by the next evolutionary step in the ultra-high-tech realm: artificial intelligence (AI). The progressive iterations required to make significant leaps forward, propelled by results garnered from historical analysis, chew up amounts of power that many communities are not equipped to supply.
Other growing demands on the power grid will come from industrial users in steel, cement, gypsum, and anywhere there’s the possibility of replacing oil or natural gas as a heat provider in the production process. Let’s also not forget the money that will be going into transmission lines or the upward-sloping trends in residential solar installations and utility-scale battery storage units.
As always, there is a caution. The outlook for extra power capacity from hydroelectric sources demonstrates the folly of relying on too simplistic expectations. The very climate change against which hydropower, in the form of dams and penstocks, was supposed to be a buffer has rendered its application less secure, thanks to the drying up of mighty rivers and the progressive shrinkage in some lake reservoirs.
The bottom line must also focus on the billions of dollars of construction that will be going into new power generation projects, especially in renewables, including wind and solar farms, geothermal, and nuclear, maybe more tentatively in the U.S. than in other countries. The shortcomings of some of these projects aside, commitments by major energy companies have been made, won’t be readily abandoned, and will almost certainly be spurred on further by next-stage improvements in design.
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About ConstructConnect
Construction Starts Here™ at ConstructConnect, where our mission is to help the construction industry start every project on a solid foundation. A leading provider of software solutions for the preconstruction industry, ConstructConnect empowers commercial construction firms to streamline their workflows and maximize productivity. ConstructConnect operates as a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the Nasdaq 100, S&P 500, and Fortune 1000.