Myths Associated with the 'Smart' Electrical Grid

Media accounts about the electric grid, the “smart grid,” and cyber attacks have been misleading, if not completely wrong. Much hoopla and misinformation comes from vendors selling panaceas, and scaremongers selling their services.

Disclaimer: In the time between the writing of this article and its publication, this blog post came out and was linked at Instapundit. The author was completely unaware of any such industry group and any such agenda (though the issue itself is obvious), and is completely unconnected with any such industry group. This specific issue will be addressed in Part II of this article, and has no direct bearing in this, Part I.

Much has been written in the popular media and blogosphere in the past decade about the electrical power grid, some of it good, much of it bad, much of it downright silly, and almost all of it incomplete.

A good example of the silly can be found in this recent piece in U.S. News & World Report by Alex Kingsbury:

But while it may have been a technical wonder at the time of construction, the nation's power grid has become dangerously antiquated over the past few decades. If technology in the home is racing ahead at broadband speed, the power grid is stuck back in the days of rotary-dial phones. According to industry statistics, the dog food industry spends more on research and development than the electrical sector does. Aging technology means more frequent blackouts, a greater vulnerability to computer hackers, and, perhaps most insidious, colossal inefficiency. As part of the economic stimulus package, the Obama administration has pledged $3.4 billion toward "smart grid" technology -- the next generation of infrastructure, meant to stabilize the grid in the event of a failure, incorporate green technology, and vastly improve efficiency. But those billions are a drop in the bucket toward bringing the entire national grid into the 21st century, which could take decades and cost upwards of $100 billion, some experts estimate.

This is silly on several levels, starting with the comparison with the dog food industry and the internet, and the specious reference to “it” as a single entity constructed all at once. And I would question his numbers, but the article isn't sourced.

“Aging technology” is a nonsensical term, because the technology can't get old unless there's a new technology in the wings to replace it, and the argument that there's not enough money in R&D undercuts the implication that there has to be newer technology waiting. Furthermore, older analog technology can't be more vulnerable to computer attack, if it's not based on computers. The “colossal inefficiency” claim is completely unfounded, and as I will show, nonsensical. But then, somehow, by making everything “smart," the system will be less vulnerable to a cyber attack than without all the computers. And that's not even touching the “green technology” wasp's nest, which is a whole article by itself.

Clearly this leaves a bit to be wanted in the way of an explanation. Let's start from the beginning.

Myth #1: There exists a monolithic “national electric grid.”

The North American continent north of the Mexican border consists of a number of regional reliability councils as designated by the nonprofit North American Electric Reliability Corporation. Those are members of one of three major “interconnections,” which are essentially independent networks, with very limited ability to exchange power between them, since it must be done with expensive D.C. interconnects. The three major interconnects consist of Texas, Western, and Eastern. There are also smaller ones in Alaska and Quebec.

Myth #2: The “national grid” is vulnerable to a system-wide failure.

Because of the minimal connections between interconnections, a system failure in one interconnection won't spread beyond that interconnection. In fact, historically, the major cascading failures in North America have all been in the Eastern interconnection, and further, have been limited to the densest portion of the Eastern interconnection. So the argument that the entire national grid is vulnerable to a system-wide failure is wrong on at least two counts: 1) any doomsday failure will be firewalled at the limits of the interconnection, and 2) history has shown us that these kinds of failures usually fizzle out, leaving most of the Eastern interconnection unaffected.

Myth #3: The federal government needs to rebuild the grid.

With the exceptions of the federally owned hydropower authorities (Bonneville, TVA), the federal government doesn't own or operate the transmission or distribution infrastructure. It's never been the mission of the federal government to own and operate a national grid; indeed there is no such thing. The utilities that own and operate the existing transmission apparatus should be able to finance any capital improvements the way it's always been done -- with private financing, based on expected return on investment.

There are only certain specific corridors that are under great stress. The capital improvements that must be made are not spread all over the country. Much of the existing infrastructure is at less than full capacity. There is a benefit to having wires at less than full capacity, aside from the ability to handle growth: they waste less energy. So part of the economic calculation that the owners take into account is how much power can be saved by having oversized wires.

Do certain pieces need to be replaced? Probably. But the financial mechanism for that should already be in place. There should be funds for periodic replacement of capital equipment. This is nothing new, and should be a routine matter of finance. This is basically an internal matter that their maintenance departments should be dealing with on an ongoing basis.

There is a minor federal role in regulation of the grids. NERC, the private nonprofit corporation founded to regulate reliability, operates under the auspices of the federal FERC, which has responsibility for regulating other utility networks, such as gas pipelines.

Let me repeat part of the breathless claim in the above linked article:

As part of the economic stimulus package, the Obama administration has pledged $3.4 billion toward "smart grid" technology -- the next generation of infrastructure, meant to stabilize the grid in the event of a failure, incorporate green technology, and vastly improve efficiency.

This doesn't merely suggest that “smart grid” technology will improve energy efficiency; it outright claims that it will “vastly” do so. This is nonsense. The “smart grid” (which the author never bothered to define) will provide other benefits to the utilities, and will result in some very marginal energy savings, but will not “vastly improve efficiency." Let me explain: