Here are seven key questions and answers about the electricity economy and smart-grid technology.
1. What is “electronomics” and where does it fit in today’s energy world?
One of the best ways to understand the new electric smart grid of the 21st century is by applying electronomics, which helps you analyze the rapidly emerging electricity economy. Electronomics means jobs, progress and prosperity; but it also spells huge financial opportunities and brand new companies and industries that will be created on a vast scale, a scale we haven’t seen in the United States for many decades or more.
Electronomics is also one of the key underpinnings for the stimulus package currently being shaped and fashioned in Washington DC. There are lots of stimulus ideas that create jobs for a year or two and that refurbish aging infrastructure. That’s really important. We need new bridges and roads and highways.
But the smart grid infrastructure that we’re talking about is much more lasting in its impact. It is the development of a new infrastructure that will permit new forms of commerce to take place. It is akin to the transcontinental railroad, the phone system, the interstate highway system and the Internet in the way that it will help enhance new fortunes and spawn new Googles and Microsofts.
Building out this grid will also allow us to remain competitive in a world that is rapidly moving from a petroleum economy to an electricity economy. Right now, we’re falling behind. Many of the most exciting and aggressive smart grid initiatives are coming from overseas. Much of the Middle East is using its oil money to create a state‐of‐the‐art smart grid along with sustainable cities. Europe spends 10x what we do on smart grid research. And China is leading the world in high‐voltage transmission and next‐generation grid efforts. If we want to keep pace, we have to master Electronomics and really dig in here.
2. What is the current state of the U.S. electric infrastructure?
The electric infrastructure in the United States has been called the most complex machine on earth, and with good reason. There are so many moving parts. For starters, the system has 14,000 transmission substations and 4,500 large substations for distribution. And, just as importantly, there are over 3,000 entities—each with a competing agenda—that own a piece of this national electric infrastructure. Actually, it’s not a truly cohesive infrastructure at all. Many countries around the world have one national electric grid. We don’t. Ours is fragmented, to say the least, and this makes it hard to implement technical and political “repairs.”
In addition to being fragmented, our electric infrastructure today is aging, outmoded, underfunded and overstressed. Basically, we’re talking about a 19th century system from the days of Edison and Westinghouse that uses 20th century equipment in an effort to keep up with a 21st century economy. This is the digital age and our electric grid is using electro‐mechanics from the 1960s and 70s rather than microprocessors. Approximately 70 percent of the transformers and transmission lines are 25 years old; and 60 percent of the circuit breakers are 30 or more years old.
We are paying the price for this. Congestion within our current electric infrastructure costs ratepayers $2 billion a year, and commercial ventures are losing more than $100 billion to outages. That’s not all, though. We’re simply not investing in our electric infrastructure. In fact, when it comes to our electric grid, we have an embarrassingly low R&D rate—about 1/20th the average of all U.S. industries.
No wonder that communities with decaying electric infrastructure lose jobs that shift to places with low‐cost, high‐quality power; and no wonder that our country is losing clean‐technology jobs to other nations around the world. The regulators are well intentioned, but they are out of touch. They are still rewarding utilities for installing instantly obsolete equipment, and they are still allowing utilities to sell more power at a time when we need to use less. This is a demand issue—not a supply issue.
The bottom line is that the electric system, as it’s currently configured, is out of sync. Wholesale power transactions jumped more than 300 percent between 2000 and 2005; near misses in terms of outages skyrocketed by 1,000 percent between 1997 and 2002; and there’s no way we can release the pressure by using alternative energy like solar and wind because they require intermittent bursts of power that today’s infrastructure just isn’t capable of providing.
3. What should / could the U.S. electric infrastructure look like if we really focused our energy and resources?
Infrastructure has always been the key to prosperity in the United States—whether it’s been the transcontinental railroad, the interstate highway system, rural electricity, or the telephone or Internet network. And building a smart electricity grid for the 21st century is no different. What we need to aim for is pretty clear. Our goal should be one vast, interconnected, intelligent system that is
