Politicians are trying to rush the inevitable; it won’t work


By Warren B. Causey

Throughout the first quarter of 2009 electric utilities were front and center in the political arena, particularly in the United States. The same is true in other parts of the world. Politicians have “discovered” the usually slow moving and tightly regulated utility industry. Now they are pushing utilities to convert a natural “evolution” to a “revolution”. It likely won’t work, at least not in the timeframe envisioned by those politicians.

Politics has been involved in the electric generation and distribution industry since its founding in the late 19th century by Thomas Edison. Utilities have been regulated entities almost since the beginning.

What is new as we are about to enter the second decade of the 21st century is that not only is the industry being in large part blamed for a newly discovered pollutant, carbon dioxide, which is naturally ubiquitous in the Earth’s atmosphere, but it also is being tasked with pulling the U.S., and a major portion of the rest of the world, out of its worst economic recession since the great depression of the 1930s. Oh, and in your spare time, electric utilities enable the remaking of the automobile industry, eliminate the fossil fuels that you have used to generate ubiquitous electricity for 100 years, and accomplish all this while remaining fiscally sound and providing service to all.

It’s doubtful that very many people have ever accused politicians of being logical, but in 2009 they seem to have decided to simultaneously defy the laws of physics, gravity, time, history and economics. They want the industry to completely remake itself, going from the centralized large plant generation model created by Edison to widely dispersed smaller generation; from fossil fuel generation to clean “renewable” generation; from being a mostly manually controlled and maintained system to becoming a self-healing ubiquitously digitized and computer controlled enterprise. Oh, and don’t make electricity unaffordable for the majority of consumers!  

Is all this possible? The answer likely is yes, but in the timeframe being posited, definitely not.

Despite political co-option of the terms “intelligent utility” and “smart grid” in recent times, the electric utility industry has been working in these directions for many years. Distribution automation (DA) – being able to control the grid remotely – is nothing new. Utilities have been working on DA and SCADA (Supervisory Control and Data Acquisition) systems for more than 20 years. They also have been building out communications systems, first analog radio for dispatching service crews to far-flung territories, and in recent times, digital systems to reach all of the millions of pieces of equipment they service. The terms themselves were not invented by politicians, but by utilities themselves. Prior to 2009, all of these concepts were under way at utilities around the world.  

As examples, WE Energies has a working “pod” of all digital, self-healing, radial designed feeders that works. The concept is being tried in Oklahoma, Canada and elsewhere. But the pods are small and still experimental. Pacific Gas and Electric, PEPCO and a few others have demonstration projects of “artificial intelligence” on the grid to automatically switch power around outages. TVA and several others have new substation level servers that allow communications with, data collection from and monitoring of IEDs (intelligent electrical devices) while simultaneously providing a “view” into the grid from anywhere else in the utility, including the boardroom. European utilities are ahead in some areas, behind in others.

The transformation to a “smart grid” is under way and accelerating. However, to this point, the penetration is relatively small in the U.S. and even further behind in many other countries. Utilities in Africa struggle just to provide a few light bulbs for much of that continent. Most of the worldwide grid still is big and dumb – in some places barely advanced from Edison’s days.

Advanced metering infrastructure (AMI) actually was invented by utilities, although vendors serving the industry have greatly advanced the art since the mid-1990s. Utilities in the U.S. installed earlier generation AMI, called AMR (automated meter reading) for about 50 percent of all customers, although the other 50 percent still were being read by meter readers traipsing through people’s yards monthly. AMI, which allows two way communications with the meters (AMR is mostly one way), is advancing rapidly, but still has reached less than 20 percent of American homes, according to research by AMI guru Howard Scott and Sierra Energy Group, the research and analysis division of Energy Central. Current large scale installations by Southern Company, Pacific Gas and Electric, Edison International and San Diego Gas and Electric, are pushing that percentage up rapidly in the U.S., and other utilities are in various stages of pilots. The first installation of a true two-way metering system was at Kansas City Power & Light Co. (now Great Plains Energy) in the mid-1990s. There are large scale AMI installations in Italy and other parts of Europe, but in other parts of the world it hasn’t started yet.

So the intelligent utility and smart grid were under development by utilities before politicians got into the act. However, the build-out was expected to take perhaps 30 years or more before completed down to the smallest municipal and co-operative utilities.

Major other portions of what is being envisioned by politicians have yet to be invented or developed. There is no reasonably priced, reasonably practical electric cars, nor standardized connection systems to re-charge them. There are no large scale transmission systems to reach remote windmill farms or solar generating facilities and there is large scale resistance from environmentalists to building such transmission facilities. Despite some political pronouncements, renewable generation, other than hydroelectric dams, still produces less than 3 percent of America’s electricity in the U.S. and that percentage is climbing very slowly around the world  

Yes, the U.S. federal government was throwing some money at the build-out in early 2009, about $4 billion for smart grid and some $30-to-$45 billion at renewable energy. But these are drops in the bucket to the amount of money – estimated by responsible economists at $3 trillion or more – required just to build and replace the aging transmission systems and automate the grid. This is money utilities don’t have and can’t get without making the cost of electricity prohibitive for a large percentage of the population. Despite one political pronouncement, windmills in the Atlantic Ocean are not going to replace coal fired generation in any conceivable time frame, certainly not in the four years of the current political administration in the U.S.

Then, you have so-called “global warming” which has become a major political movement, despite disputed and questionable “science” behind the movement. As a political movement global warming serves as a useful “stick” to the “carrot” of government funding for renewable energy. However, the costs for the average consumer of any type of tax on carbon dioxide are likely to be very heavy.

Despite a shortage of engineers and other highly skilled workers in the U.S., the smart grid and intelligent utilities will be built there and elsewhere around the world. Utilities already were working the problem before politicians got into the act. But it is a generational transformation, not something that can be done overnight. To expect the utility industry to gear up to get all this done in time to “pull us out” of the most serious recession of modern times just isn’t realistic – it’s political.  

Add to the scale of the problem political wrangling over every concept and every dollar, mix in a lot of government bureaucracy that takes months to decide how to distribute deficit dollars, and throw in carbon mitigation for global warming and it’s a recipe for disaster. Expect the lights to start flickering in the U.S. soon, they’re already doing so in India, South Africa and other parts of the world. Whether they only flicker or go out for longer periods is out of the hands of utilities – it’s become a political issue. Of course, politics usually is the worst possible way to accomplish anything.