The big idea and why it matters: The grid –the electrical infrastructure that powers our day-to-day lives – has three major sections covering the US. In addition to being outdated, it is threatened by several issues. However, there are also a number of related opportunities for making it far more robust as we look to the future.
“We’re a superpower with a Third World grid” –Bill Richardson (former governor of New Mexico and US Ambassador to the UN)
I’m not the on the cutting edge of what’s hip these days, so I hadn’t heard of “The Griddy” until I watched the Netflix series, Receiver (spoiler alert: it’s about NFL receivers) that talked about the touchdown dance Justin Jefferson (of the Minnesota Vikings) and Ja’Marr Chase (of the Cincinnati Bengals) made famous. Here’s a link to a solid Jeffersonian Griddy performance if you want to see what it’s all about. As you can see, the Griddy is a perfect little dance and a fun form of human expression. It doesn’t need to be fixed.
However, the grid – i.e., the US electrical infrastructure that Mr. Richardson succinctly describes in today’s quote – has some problems. When I think about the grid, it makes me go “eeee” (like that wincing smile emoji 😬) and that Grid-E needs some fixin’. My impression is that the grid is far from robust, in constant need of repair (ever heard of a power outage?), and represents a genuine national security threat. But these aren’t accusations I should be throwing around loosely, so today, the goal is to learn more about the issues making it a “Grid-E,” and how we can make it into something better – like a “Grid-A.” Think of The Fonz saying, “The grid. Aaay!” As in, the grid is all good! We’ve got it under control, it rarely breaks down, and we’re excited about it…and then we can use a positive emoji of your choosing, like 😎, 💪, or 🙌. Here we go!
What is “the grid”?
I’m glad you asked. Per energy.gov, “the ‘grid’, or transmission system, is the interconnected group of power lines and associated equipment for moving electric energy at high voltage between points of supply and points at which it is delivered to other electric systems or transformed to a lower voltage for delivery to customers.” Thus, the construction of the grid involves several key steps, including generation, transmission, and distribution.
- Generation: Power plants and renewable energy sources generate electricity.
- Transmission: High-voltage transmission lines carry electricity over long distances.
- Distribution: Local distribution networks deliver electricity to homes and businesses.
- Maintenance and Repair: Utilities and contractors are responsible for maintaining and repairing the grid infrastructure.
Interconnected now…
The US has two major interconnections: the Eastern Interconnection and Western Interconnection. Along with the Electric Reliability Council of Texas (we touched on the Texas grid and some other classic blowups in March of 2021), these interconnections cover the electrical needs of most Americans. There are regional and state-specific transmission system operators (TSOs) that help to manage and operate the grid; you can find them listed on this Wiki page, but you’ve probably never heard of them, and knowing their names isn’t going to have any utility (😊) for this conversation.
The general idea behind the grid is to create very high voltage (e.g., 700,000 volts!) as the output of a power plant (via a transformer), which can then be sent efficiently over long distances to where it is more locally needed. Then, another transformer can step that high voltage down to a low voltage for local distribution into our neighborhoods and homes (e.g., 120 volts).
The intention of interconnectivity is for greater robustness; more power can be directed to where it is needed because of general demand or an issue. Back to our above Texas example, they were hung out to dry (or freeze) because the Texas interconnection (aka “Electric Reliability Council”) was largely separate and couldn’t tap into power from other states in its time of need. The three interconnections have limited connectivity to one another – a situation that should be significantly enhanced via the Grid Modernization Initiative (GMI), hopefully setting the stage for a brighter future (these puns just write themselves).
…but not then
With the advent of electricity, people started generating power locally, and things grew from there. Shoutout to NYC, where a steam engine on Pearl Street – regarded as the first power station and a model for other cities to quickly follow – was used to power Edison’s incandescent lightbulbs back in 1882. Coal and water were used to generate power in many other places and distribute power, and it eventually made sense to connect these local grids together. So, here we are, with a modern-day patchwork of what man has constructed over the past century and a half, and we need to make the best of it. Piecing things together is a common theme within infrastructure, but it’s slightly more complicated to connect electrical grids and the flow of electricity than it is roads or rails and their local traffic flow.
Areas of Opportunity
The main threats to the grid can be summed up in the following areas:
- The grid itself: aging infrastructure, lack of complete interconnectivity, etc.
- Sabotage: cybersecurity and physical threats/terrorism
- Severe weather: hurricanes, earthquakes, tornadoes
How do we get from an E to an A?
No solution will be perfect, but there is a lot that can be done to combat all of the above via increasing the robustness of the grid itself and the systems that protect and support it. For example, I live in New Jersey, and there is often an appalling mess of wires hanging from the telephone poles that line our streets. I’m not saying it’s an inexpensive upgrade or one without tradeoffs, but I’d bet that moving those lines underground would reduce future power outages (and one would think that a place with some of the highest taxes in the country would be in a reasonable position to make such upgrade, but I digress…). More generally speaking, here are some things we can do:
- Modernization: Replace old equipment, enhance cybersecurity, and integrate smart-grid technologies that allow for real-time monitoring and management (and move powerlines underground).
- Diversification: Embrace renewable energy sources (wind, solar, and hydroelectric) along with more traditional fossil fuels where possible. Some of these lend themselves to hyperlocal implementation (like solar panels on your roof) and would come with efficient storage improvements to help manage intermittent power sources.
- Decentralization: Encourage the development of localized power sources and grid-connected microgrids that can operate independently of the broader power grid if needed; this could greatly enhance resilience by allowing communities to generate and manage their own power, help us bid large-scale outages farewell, and diminish the impact of targeted attacks.
- Nuclearization: Surely, many hurdles remain to fully embracing the next generation of nuclear power. However, I wanted to include this as a standalone bullet point because nuclear could be the option with the least tapped potential. If we get it right, it stands to bring about an abundance of clean, safe power, and there is a lot of expected progress on the horizon, including small modular reactors (SMRs). BUT, even if nuclear magically gave us unlimited free energy, we’d still need a reliable grid to harness and distribute it (until we all have personal atomic power plants at home). It’s a multi-faceted problem.
Without the support of legislators (either through sensible regulation or deregulation) and the public, much-needed grid improvement could be accelerated, slowed, or even reversed. However, by addressing the above areas, we can move from our “Grid-E” towards a “Grid-A,” where our power infrastructure is reliable, efficient, and capable of meeting future demand. We can turn that dream into reality with the right combination of investment and innovation. Aaaay! 😎
Now that we have a better handle on the grid and its issues, we’ll look at it from an investment perspective in the next edition and, of course, bring some Alts into the equation.
Until next time, this is the end of alt.Blend.
Thanks for reading,
Steve
