In January 2016, nearly 351 million megawatt hours (Mwh) of electricity was generated for the entirety of America’s electrical grid, according to statistics reported by the U.S. Energy Information Administration. Of those generated, a little more than 318 million Mwh were sold to American energy consumers, including residential, commercial and industrial. Two-thirds of all electricity generated for American consumers throughout 2015 came from coal and natural gas sources, each of which contributed 33 percent of American electricity supplies. Nuclear sources contributed 20 percent of our nation’s electricity, seven percent came from other renewables and six percent from hydropower plants.
Development of America’s electrical grid got underway in 1882 with the opening of Manhattan’s Pearl Street Station, the country’s first commercial power plant conceived by famed American inventor Thomas Alva Edison, the inventor of electric lighting. Since this inception of the electrical utility industry, the nation’s electrical grid developed on a geographically based system of transmitting one way flows of energy from a generation station to end-use customers. The typical electrical grid model employed in America starts with an electricity generating station, whether that’s a nuclear, hydroelectric or coal power plant. Upon leaving the power plant, the electricity reaches a transformer which steps up the voltage level of the electrical current, allowing it to pass through transmission lines in a more energy-efficient manner. Transmission lines transfer high-voltage electricity to a step-down transformer which sends the current to distribution lines, which in turn delivery the electricity to subtransmission customers, primary customers receiving currents between 4 kilovolts (kV) and 13kV, and then secondary customers receiving currents between 120V and 240V, which includes most residential customers.
With an average price of 12 cents per kilowatt hour (Kwh) as of January 2016, the American electrical grid system still does a good job of getting electrical energy to consumers in a cost-effective fashion. However, the electrical grid is an aging infrastructure in desperate need of modernization. A 2013 report card issued by the American Society of Civil Engineers issued a D+ grade to the country’s electricity infrastructure despite increased investment since 2005. A report card synopsis cites the age of distribution systems, some of which were in use during the 1880s, as well as weather events and limited maintenance as serious issues. As more electrical grid resources become connected to the Internet in the race to develop smarter grids, cyber attacks will become an area of growing concern, which utility providers will have to stay ahead of.
The electrical grid system of North America, including most of Canada, can be broken down into three major alternating current (AC) power grids known as interconnections. The Eastern Interconnection spans from north central Canada all the way south into Texas and then covers the majority of land going east towards the Atlantic Ocean. The Western Interconnection splits the difference, covering the vast majority of Canadian and American land west of the Great Plains. Most of the state of Texas is served by the Texas Interconnection which handles 85 percent of the state’s total electricity needs. Alaska also has its own interconnection, and it should be mentioned that Hawaii has its own grid, for completely obvious reasons. In each case, all electric utilities in a single interconnection are electrically tied together during normal system conditions and operate at a synchronized frequency averaging about 60 hertz (Hz).
Aging electrical infrastructure poses many problems to American communities. Poorly maintained transmission lines can cause widespread outages, such as one last April which caused wide outages in the nation’s capital after a power transmission line was severed in Maryland. But poor infrastructure is more than just a temporary inconvenience during an outage. New line construction can be expensive, running into the hundreds of millions of dollars, but those upgrades are necessary in many communities to attract new business. Last April also saw the release of the first installment of the U.S. Department of Energy’s (DOE) Quadrennial Energy Review, commissioned by the Obama administration, which indicated that billions of dollars would need to be invested into America’s power and energy infrastructure, which includes oil, natural gas and transportation, to address serious vulnerabilities.
Updating electric grid equipment, much of which is many decades old, would do much more than keep our current system running longer. The next generation of electric grid technologies would seek to create the “smart grid,” a digitized system enabling more automation and remote control of grid resources. This would involve introducing two-way digital communication technology which would enable communications among many components of the grid, from transformers right down to the electric meters within American homes.
Part of current smart grid developments involve advanced metering infrastructure (AMI) approaches which allow end-user consumers of energy to determine periods of low energy demand so as to use appliances at times when electricity pricing is reduced because of extra supply. Making sure that a grid does not reach a peak demand which it cannot handle, leading to blackouts, is a major goal of AMI development.
Visualization technologies are also used by the smart grid to assess the health of electrical systems in real time. Perhaps the most robust system is the Visualizing Energy Resources Dynamically on the Earth (VERDE) project undertaken by researchers at the Oak Ridge National Laboratory. This system seeks to provide electrical maintenance workers and system administrators alike regional information which improves situational awareness of a blackout event. VERDE visualizations can be overlaid with weather patterns, model grid behavior as well as help in the analysis for contingencies in case of extreme situations.
Smarter electrical grid health analysis can be performed thanks to readings taken by phasor measurement units (PMUs), a measuring device designed to collect precise measurements of electrical waves coming from a grid in order to assess the grid’s health. PMUs can obtain highly accurate readings by taking 30 observations of electrical waves every second, compared to conventional measurement techniques which take four observations per second. Time stamping allows PMUs, also known as synchrophasors, to be synchronized across utilities to provide a comprehensive view of the health of an entire interconnection.
Reliability is of utmost importance in electricity distribution systems and there might be the opportunity to bolster America’s electricity reliability in the coming years with the establishment of microgrids. Compared to the large interconnections which serve major swaths of the U.S., or even large power plants which provide energy to entire regions, microgrids are highly localized groups of electricity sources that can be connected to the traditional grid but can also operate autonomously as an island. In previous years, where coal, gas or nuclear were the only types of electricity generators, microgrids have not been so feasible. With the advent of renewable energies, however, the use of microgrids becomes much more possible; unlike coal or gas, sun and wind don’t have to be mined and transported to a central power plant. Conversely, microgrids could help America incorporate more alternative, renewable forms of energy during a time when it’s well known that none of those sources could replace coal or gas overnight.
Along with the decentralization of grid resources, grid reliability could also be improved if the electricity generated by power plants could be stored without being distributed. Current grid technologies do not incorporate energy storage and typically try to produce the exact amount of electricity to meet demand. Excessive demand can lead to a strain on grid resources leading to electrical blackout. The DOE reported statistics as of August 2013 which indicated that the United States was home to 202 energy storage systems with a maximum capacity of 24.6 gigawatts (GW), much of which comes from hydroelectric sources. That amount won’t be enough to handle high demands placed on a system which could need to produce between 4 and 5 terawatt-hours (TWh) each year by the year 2050. Costs are a major barrier, only 30 to 40 percent of which are eaten up by the system’s storage component, as is a lack of a regulatory environment with a market plan.
For the most part, electrical infrastructure upgrades come in response to adverse events like significant outages. An $11 million project announced by Edison International (NYSE:EIX) subsidiary Southern California Edison will install new hand switches and underground vaults in Santa Barbara, but the renovations are in response to significant power failures in recent years. In the Hoosier State, Duke Energy (NYSE:DUK) will be improving the electrical infrastructure in Indiana to include AMI and “self-healing” systems which can detect an outage and reroute electricity to reach consumers.