Failure is not an Option Unless We’re Talking About American Energy Infrastructure

Published: Mon 12 Aug 2013
A blog entry by Christine Hertzog

Contributed by:

Christine Hertzog
Managing Director
Smart Grid Library

Christine Hertzog's Blog

If your child came home with a report card that had a cumulative grade of a D, what would you do?  You might make investments in tutors, or pay closer attention to homework quality.  You wouldn’t shrug your shoulders and just continue on.  When it comes to American infrastructure, the nation just received a report card, and American citizens should be alarmed.  Our world-class economy and modern society cannot be sustained with our current infrastructure.

The American Society of Civil Engineers (ASCE) published their quadrennial review of national infrastructure, which examines energy, transportation, water, aviation, schools and other critical infrastructure in our modern society.  The 2013 Report Card for America’s Infrastructure points out the deplorable state of existing assets – we collectively depend on systems that earn a cumulative D+ grade.  The American energy infrastructure, which includes oil and gas production/distribution as well as the electric grids received a grade of D.  The D grade is defined by the ASCE as:  “infrastructure in poor to fair condition and mostly below standard, with many elements approaching the end of their service life.  A large portion of the system exhibits significant deterioration.  Condition and capacity are of significant concern with a strong risk of failure.”

The report contains telling statistics.  Significant power outages have climbed from 76 in 2007 to 307 in 2011.  Most of the outages occur in the distribution grid.   Congestion has also been increasing as demand outstrips the capacity of existing transmission and distribution lines to carry sufficient electricity.  The traditional answer has been to build more centralized, large-scale generation plant and string miles of transmission lines to address these capacity issues.  This is borne out with a comparison of where utilities have been investing their money too.  Despite the number of Smart Grid projects in the distribution grids across the USA, the investment gap between now and 2020 is estimated by the ASCE to be $57.4 billion.  We are underinvesting in the distribution grid that already experiences the most service disruptions.  In contrast, investment in transmission infrastructure has been increasing at a respectable 7% since 2001.  However, the ASCE report points out that build-out of new transmission lines is fraught with problems that range from costs to obtaining necessary permits to gaining concurrence from local residents who may see the power lines but not see the benefits.

The report accurately diagnoses how dire the situation is for the nation’s electrical grids, but their recommendations for the energy sector put too much emphasis on transmission investments as a solution.  A continued reliance on centralized generation and the relative fragility of high voltage transmission lines is completely out of alignment with the growing acknowledgement amongst regulators, political leaders, and industry that grid resiliency is not addressed this way.   Climate change adaptation planning recognizes that investment needs to be focused in distribution grids.  Policy makers and planners should heed suggestions to decrease dependence on fossil fuels and increase energy efficiency through improved technologies and consumption behaviors.  The Report Card’s summary recommendations also make sense:

  1. Increase leadership in infrastructure renewal.  Agreed – but we need more than renewal, we need revisions and upgrades to inject resiliency into the grid.
  2. Promote sustainability and resilience.  Agreed – we need to emphasize solutions that are sustainable to protect our natural environments, like renewable energy sources.  That’s been ignored for too long, and the result is climate change.  We absolutely need to promote resilient designs and technologies into the grid and particularly at the distribution level.
  3. Develop and fund plans to maintain and enhance America’s infrastructure.  Agreed – we need consistent, reliable, and cost-effective funding sources so federal, state, and local projects can be completed.  We can close the $57 billion finance gap by recognizing that investing in resilient distribution grid-based solutions that harden the grid to withstand more extreme weather events caused by climate change is the smartest strategic investment.  That’s the most effective way to go from a D grade to an A+.

But how will we pay for this?  In part three of this series, some financing options will be explored.

Christine Hertzog
Smart Grid Library