America’s Vulnerable Energy Grid

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Introduction

On August 14, 2003, fifty million people in the Northeastern United States and Canada suddenly found themselves without electricity, some for more than twenty-four hours. In addition to eight lives, the largest blackout in U.S. history cost an estimated $6 billion to $10 billion. Contrary to initial fears, the outage was not the result of a terrorist attack or some other form of sabotage. Rather, untrimmed trees in Ohio set off a chain reaction that cast 9,300 square miles into darkness.

Sadly, this was no isolated incident. In July 2006, a nine-day power outage in Queens, New York affected one hundred thousand people. The apparent cause of that disruption was deterioration of the thirty- to sixty-year-old cables servicing the area. The same month, a violent thunderstorm in St. Louis, Missouri knocked out power leaving some seven hundred thousand people to brave a weeklong heat wave without electricity.

Current stresses on the U.S. energy grid presents cause for concern. With an aging infrastructure and growing energy consumption, major outages may become an increasing phenomenon. The specter of terrorism also looms large: Experts say jihadis in Iraq have proven adept at disrupting the electrical grid in that country and could easily apply that same skill set in the United States.

Pushed to the Limit

The U.S. electrical grid—the system that carries electricity from producers to consumers—is in dire straits. Electricity generation and consumption have steadily risen, placing an increased burden on a transmission system that was not designed to carry such a large load. According to the American Society of Civil Engineers, paltry investment in the aging infrastructure caused transmission capacity to drop 19 percent annually for the decade between 1992 and 2002. Since then, utility companies have begun sinking more money into transmission capacity, currently spending $3 billion to $4 billion a year. As a result of recent deregulation, some utilities own transmission lines and others do not, but the law requires transmission capacity to be shared, leaving companies unsure about major investment in transmission assets.

Unfortunately, these new investments will not alleviate the stress on the transmission grid: While transmission capacity is projected to increase 7 percent in the next decade, demand will rise some 19 percent. As a result, consumers will incur higher costs and blackouts could become more frequent

Prospects of Terrorism

Attacks on infrastructure are an almost daily fact of life in Iraq. Experts caution the war in that country will produce a whole generation of terrorists who have honed their skills sabotaging infrastructure. In his recent book, The Edge of Disaster, CFR security expert Stephen E. Flynn cautions, “The terrorist skills acquired are being catalogued and shared in Internet chat rooms.” But when it comes to Iraq’s electrical grid, RAND economist Keith W. Crane says terrorists are not the main cause of disruptions: “Most of the destruction of the control equipment was looting,” he says.

Either way, Clark W. Gellings, vice president of the Electric Power Research Institute, an industry research organization, thinks the U.S. grid is an unlikely target. “It’s not terribly sensational,” he explains, “The system could overcome an attack in hours, or at worst, days.” That said, attacks on electricity infrastructure could become common in future warfare: The U.S. military has designed and entire class of weapons designed to disable power grids.

Managing Risk

Overgrown trees alone did not precipitate the massive 2003 blackout. The greater cause was a grid so overloaded it had become unstable. The trees merely provided the catalyst for a chain reaction that, had the system been operating stably, never would have been possible. The North American Electrical Reliability Corporation (NERC) is responsible for ensuring such conditions are not repeated. NERC’s president and CEO, Richard P. Sergel, explains that three of his agency’s standards were not being met when the lights went out across the Northeast that summer: Trees went untrimmed, operators lacked the proper training, and monitoring systems showing the grid’s condition in real-time were not in place.

Since its inception in 1968, NERC’s regulations for operating power grids have been voluntary. But in 2005, Congress asked the Federal Energy Regulatory Commission (FERC) to designate an organization to establish and enforce rules of operation for the nation’s electrical grid; it settled on NERC, which assumes the responsibility on June 4, 2007.

When this happens, NERC guidelines for safe operation of the electrical grid, which are currently voluntary, will become mandatory. Under NERC’s oversight, Sergel says, consumers can rest assured the conditions that made the 2003 blackout possible will not be replicated. “No matter how stressed the system is,” he says, “We still insist it operate stably.” At times this could mean less reliable service; brief, managed outages could occur in order to avoid overburdening the system and risking massive failure. Such was the case in Texas in April 2006, when hundred-degree temperatures pushed energy demands beyond the capability of the transmission infrastructure. Though not everyone had power all the time, the relatively brief service interruptions helped allay a massive system failure.

Inherently Vulnerable

With some 160,000 miles of high voltage lines and 250,000 substations, the U.S. power grid remains open to a host of threats. “It’s extremely difficult to harden,” says Gellings.

The system was built at a time when its vulnerabilities had little impact; even today, under normal conditions a downed line or a substation can easily be bypassed. “It’s like a web, you can go around issues,” explains Ed Legge, a spokesman for the Edison Electric Institute, an association of publicly owned electric companies. Of course, when a grid becomes overloaded, losing a line increases the strain and could cause failure. Circumventing one or two disruptions is one matter, but a host of simultaneous interruptions will still cause widespread outages. This was the scenario in St. Louis in 2006, when a powerful storm knocked out so many lines at once that the grid could no longer function.

Some points on a power grid could have a larger impact than others should they fail. In particular, transformers—the devices that take electrical current from high voltage lines and reduce it to lower voltages for local distribution—could prove troublesome. Transformers are large and costly and therefore not easily replaced. Spare transformers exist, but not readily: Bringing a spare online usually takes days, says Gellings. If several transformers were to simultaneously fail in a single region, it would be particularly difficult to overcome. Flynn has argued for maintaining a larger inventory of spares to avoid such a situation. Low-cost transformers could help make this a financially viable option, though Sergel cautions the cheaper equipment is less efficient, and could only provide temporary relief.

“Terrorists or Trees”

Terrorism is hardly the only hazard facing the transmission system. “On any given day, five hundred thousand people in the United States are without power for two hours,” Gellings says, “A lot of it is squirrels.” Vijay Vaitheeswaran, the Economist’s energy correspondent, explains that with few exceptions—mainly cyber security—protecting the energy grid requires the same measures whether guarding against “terrorists or trees.” The aim is to have as resilient a grid as possible, one that can mitigate the impact and expedite recovery when something goes wrong.

Boosting transmission capacity is certainly one way to do this, but resistance to building new lines in local communities and disputes over who should pay for construction (power companies share transmission lines) have made this difficult. “It’s easier to build a new power plant than it is to build new transmission lines,” Legge laments.

Technological innovation could offer some solutions. Superconducting cables, for instance, could carry five to ten times the load of existing lines. Unfortunately, says Vaitheeswaran, the industry only invests about 1 percent of its turnover in research and development.

A Smarter Grid

Experts say some of the most useful improvements to the U.S. electrical grid wouldn’t require any new technology. 1990s-era communications systems paired with sensors placed throughout a power grid could provide accurate, real-time assessments of the grid’s performance. These so-called “smart grids” can predict and manage around potential failures, Gellings says.

Another function of smart grids is managing demand. A smart meter hooked up to a smart grid could advise consumers in times of peak demand. “Right now,” says Vaitheeswaran, “There’s no incentive to run your dishwasher or washing machine later in the day.” Some smart meters tell customers when to avoid such activities by flashing a light; others communicate directly with the appliances in a person’s home. Such a system is within reach: Italy has installed smart meters in every household; in the United States, California has begun testing its own smart grid. Any cost of upgrading the grid would be quickly recovered, Vaitheeswaran says. Smart grids help to eliminate the costs of more frequent outages as well as the high price tag that comes with providing electricity in times of peak demand.

Distributed generation—producing electricity at or close to the source of consumption—such as solar cells or wind turbines operated near homes and businesses, can also help alleviate some stress. As Vaitheeswaran explains, the “dumbest” part of the grid is the last mile of lines leading to a consumer’s home.