a16z (Andreessen Horowitz) · 2026-04-01 · 64d

Grid Infrastructure as the Critical Bottleneck to America's Energy Transition

The U.S. electricity grid, built decades ago, cannot support accelerating demand from electrification, AI datacenters, and renewables without modernization. The problem is not energy generation capacity but aging delivery infrastructure and misaligned incentives that prevent efficient grid upgrades. Solid-state transformers and advanced power electronics offer solutions to increase capacity and reliability while maintaining affordable electricity rates.

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Metrics in this report

Distribution Transformer End-of-Life

50%

more than half

United States

Generation Capacity Growth Required

4x

minimum

For full economic electrification

Imported Transformer Steel

80%

of supply

United States

Infrastructure Quality Rating

D+grade

ASCE 2025

U.S. energy infrastructure

Residential Electricity Rate Increase

25-30%

since 2019

Average U.S. residential rates

Transformer Cost Increase

80%

since 2019

Transformer pricing

Transformer Demand Growth

2x

doubled

Since 2019

Transmission and Distribution Cost Share

50%

nearly half

Customer electricity bills in many regions

Transmission and Distribution Equipment Age

70%

of transmission lines and large power transformers

United States

U.S. Transformer Supply Deficit

30%

shortage

Current market