May 23, 2025
Is Underground Power Worth the Price? Upfront Costs vs. Long-Term Savings
How many of us have endured a storm-induced blackout while thinking to ourselves, "why don't they just put the power lines underground?" Severe storms that knock out power have a way of leading us down that road. But there's a very good reason underground transmission has been slow to catch on – cost.
Initially, the outlay for burying transmission lines and building underground substations is many times more than the cost of building overhead transmission infrastructure. Understandably, municipalities and utilities alike are reluctant to spend the money. But there is a bigger question here. Despite costing more upfront, what do the long-term financials of underground transmission look like?
A Question the UK Is Wrestling With
Long- and short-term costs are something the UK is wrestling with right now. Great Britain is in the midst of its most extensive grid upgrade since the 1960s. Projects are slated to both improve current infrastructure and add more to accommodate growing needs. And since the project began, debates have ranged over overhead versus underground transmission.
Costs are an issue in the UK just as they are in the U.S. A recent report from the Institute of Engineering and Technology (IET) only adds fuel to the fire. It details the cost differences between overhead, underground, and offshore transmission. Overhead transmission clearly wins the day. But again, costs are based only on installation.
Throw in maintenance and repair costs and the numbers change drastically. And when natural disasters destroy entire sections of the grid, cost estimates go out the window. That's really the crux of the debate. In the long term, do we save money by going underground and avoiding the catastrophic damage natural disasters are known for?
Building Costs Buy the Numbers
IET data suggests that a 400 kV transmission line cost approximately £1,190/MWkm. So a 15km 5,000MW line would cost £40 million to build. A similar underground transmission line would cost eight times as much to build under the best conditions. If installed in a tunnel, the underground line could cost upwards of £820 million.
It can be hard to convince taxpayers and municipalities to accept such a high cost for new transmission lines. People see those kinds of numbers and instantly see dollar signs flashing before their eyes. Those dollar signs represent higher taxes and utility bills.
The Cost of Natural Disasters
The counter to higher installation costs are the costs associated with repairing the grid after a natural disaster. Consider this: Florida Power & Light (FPL) spent in excess of $3 billion between 2006 and 2017 to harden their infrastructure against hurricanes. Then hurricane Irma hit in September 2017. FPL still spent more than $1.3 billion to get customers back online in the storm's aftermath.
It would be one thing if Florida was hit by major hurricanes only once every 50-100 years. But hurricanes are an annual occurrence in the Sunshine State. How many times will the grid be destroyed and rebuilt?
Certain sections of the UK are subject to equally serious storms. In those regions, politicians and residents are having the same debate. They are trying to decide if it's worth spending the money to put transmission lines underground in order to reap substantial savings down the road.
Unfortunately, there is no easy way to answer the question. Rebuilding costs increase with every storm that knocks out power. But so do the costs of new installation. Underground transmission costs more upfront, but perhaps it saves money via fewer repair and rebuild costs. At some point, we are going to need to figure it out.
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