The Need for a National Energy Grid Strategy

from Government Security News, July 2016

U.S. energy consumers have been able to count on reliable, always-on and relatively resilient electrical power for so many decades that for most people the availability of electrical power is essentially taken as a given.  And yet there is a looming sense among many experts of a rise in systemic risks that have begun to come into the light, ranging from threats of physical and cyber attack to space weather and other natural phenomenon. Indeed, just last year the Department of Defense released a request for proposals involving resilient electrical power that led to a recent commentary noting, “The declaration of DOD is clear: military bases and the civilian institutions that they depend on are overwhelmingly vulnerable to their own near complete reliance on unprepared civilian power grids. The DOD has already started the process of changing by developing distributed energy systems under their own control.”

And yet the U.S. electric power grid remains indispensable for continued American prosperity and well-being, even as the grid’s infrastructure is aging and increasingly outdated. The massive capital needs of this enormous system require constant investment and occasional system-wide overhauls. These represent a particular concern for the investor-owned electric utilities, for whom making the business case for higher rates to enable investments just to tread water is hard enough, much less investments meant to innovate and implement large-scale modernization programs.

At the same time, the grid is a very large system, with a long list of items that need to be replaced for a variety of reasons including: physical wear and tear, technical obsolescence, and the critical importance of meeting the security and power surety needs of Americans in the 21st century. This includes everything from integration of environmentally friendly alternative means of power generation to replacing the beyond-expected-service-life equipment such as the large power transformers, as well as the two-way communications built into smart meters and making the move towards interchangeable parts and other standardizations that increase efficiency of ‘spares and repairs.’

While the concerns over a truly resilient and “disaster-proof” electrical power system are on the rise, however, there is no central effort to develop a smart roadmap to get the nation from where we are to where we need to be.  Part of the problem is bureaucratic – there are multiple competing equities among the Departments of Energy, Homeland Security, and Defense, and that is just on the federal side.  The power grid is also awash in competing demands from state and local regulations as well as increasing public desires for “green” energy.

Perhaps more importantly, there also is a need to modernize the 100-year-old business model of the industry, one that relies on selling watts to earn revenue and requires decades-long massive infrastructure investments – neither of which fits the growing imperative to harness technologies that encourage greater user efficiency and greater dependence on distributed energy such as rooftop solar.   And that daunting list of challenges doesn’t even include the issue of who is going to pay for the necessary changes – which include everything from more sensors and massive data aggregation to the newly trained grid operators that can assimilate and make best use of such data.  With estimates of a necessary expenditure of $2 trillion in upgrades over the next ten to fifteen years, surely there should be some deliberate consideration given to how best to manage all the potential promise – and to mitigation of risks associated with – the already evolving and newly invigorated U.S. electrical power delivery system.

What is needed, then, is some sober analysis and a deliberate plan jointly developed by and agreeable to industry leaders and the people they serve.  In other words, the grid represents another complex and critical area which requires a true “public-private partnership”, one that can address the issues of system design, integration of key factors such as smart meters and alternative energy sources, and appropriate cost-sharing over time.  To do any less would be a disservice not only to the future, but also to the all the past good that has been enabled by the revolutionary accomplishments enabled by widespread and reliable access to electrical power.