GridAging grid cannot keep up with growing demand for electricity

The U.S. power grid is in urgent need of innovation to keep up with the energy demands of the twenty-first century. The recent polar vortex, in which several Midwestern states reached temperatures twenty degrees below zero, left more than 27,000 homes and businesses in Illinois, Indiana, and Missouri without power. In response to the subzero temperatures, utility companies urged their customers to maintain low heat temperatures in their homes for fear of a grid overload.

Al Jazeera reports that nearly twenty-five million consumers in the United States were affected by blackouts in 2012, and economists estimate that such power outages can cost the country more than $70 billion in annual economic loss.

“It’s not for lack of effort or money, but rather because the American power industry deploys technology designed in the 1800s to manage a system of wires and wooden poles that is ill suited to the weather challenges of the 21st century,” wrote David Crane, president and chief executive officer of NRG Energy.

Al Jazeeranotes that the numbers reveal the growing problms the U.S. grid is facing:

• The demand for electricity increased by around 20 percent from 1999 to 2009, but transmission capacity only increased by around 7 percent in that time, according to a 2007 study by the University of Minnesota.
• Blackouts have been on the rise. From 2000 to 2004, there were 140 instances of power outages which each affected 50,000 or more consumers, according to analysis by Massoud Amin, director of the Technological Leadership Institute at the University of Minnesota. This number increased to 303 from 2005 to 2009. An annual blackout tracker report by power management company Eaton Corp. shows a steady rise in such blackouts. Between 2010 and 2012, there were 226 outages.
• The average age of a power plant is 30-years old, and around 75 percent of America’s power lines are 25-years old, according to a study by Hugh Byrd of Lincoln University in the U.K. and Steve Matthewman of Auckland University in New Zealand.

Despite the concerns of federal and private officials about the country’s energy infrastructure, the North American Electric Reliability Corporation (NERC) reported that from 2008 to 2012, dependability of the power grid was stable with high reliability of transmission lines. A lack of urgency discourages energy companies from investing in new technology. Regulation and the uncertainties that follow changes in regulations have also limited the amount of funds private firms have invested in the electric grid.

“The power sector, which is heavily regulated at the state level, is especially fragmented, but energy markets more generally may be slow to adopt innovation because of regulatory uncertainty, lack of information, and distortions introduced by past policies – including numerous existing subsidy programs,” noted a 2012 report by the Bipartisan Policy Center.

Experts say that to combat the slow implementation of innovation in America’s electricity sector, government and private entities must invest in research and development. The power industry spends less than 0.3 percent of annual sales, or about $600 million per year, on R&D. This is less than many industries in the country, yet all industries depend on reliable electricity. Government investment in energy does not yield immediate, short-term returns.

The White House is focused on innovating the electric grid. “In the face of an aging grid, investing in the grid’s infrastructure is crucial. Given this imperative, there is an opportunity to upgrade the grid’s efficiency and effectiveness through investments in smart grid technology,” read a 2011 framework to innovate the energy sector.

The immediate solution to the electricity crisis in the United States is the adoption of a smart grid, which will help consumers understand and measure their energy usage and will encourage energy companies to adopt renewable energy resources and better anticipate consumer usage habits. Smart grids offer more reliability and higher energy efficiency with a reliance on a diverse energy mix (wind, solar, and nuclear).

PG&E has adopted a smart grid concept labeled “demand response,” in which the supplier offers lower utility prices and in return, and customers agree to reduce usage when energy demand may potentially exceed supply.