(December 2011) Lafayette Utilities System selects Elster’s EnergyAxis as its AMI system; ABB wins contract from Hydro-Quebec; Sapphire Power Holdings acquires...
End the Gridlock: Why Transmission is Ripe for New Technology
Recent advances in materials science promise a new, truly competitive paradigm for grid investment without land-use headaches or "big-iron" solutions.
It looks like high noon for electric industry restructuring. Price spikes and the threat of brownouts and blackouts have led to intense pressure to reverse course in California. Reform efforts in other states are stalling. Another Congress has adjourned with little headway on the issue. Prospects for the incoming session are highly uncertain, given an election that yielded virtual dead heats in races for the presidency, Senate and House alike. Some political commentators are suggesting that the "benign gridlock" of the past could give way to "detrimental gridlock" in the coming two years.
Few areas more urgently call for action than the safeguarding of customers' access to reliable, competitively priced electricity. More than ever, electric power is the lifeblood of our technology-dependent economy. Done right, competitive reform can strengthen both reliability and market price discipline. Indeed, after years of low commitments to new power generation, reforms in that sector have led to a huge infusion of capital and tremendous innovation in efficient, "green" distributed generation technologies.
But it's become clear that the bottleneck is the power grid itself. The past decade has seen a sharp falloff in new transmission additions. Since the late 1980s, growth in power demand has outstripped grid expansion by a factor of 2:1-and the ratio is widening as obstacles to grid construction become nearly insurmountable. The North American Electric Reliability Council projects a mere 6,000 miles of new transmission by 2009. This expansion of 1 percent in grid mileage lags far behind forecasts of 25 to 30 percent growth in power consumption.
Many factors have contributed to this slowdown in grid construction. The prolonged transition to competition has driven utilities to defer investment decisions. Rapid growth in urban and suburban areas limits land availability in the very areas where new power infrastructure is most needed. The specter of distributed generation has undermined confidence in the traditional regulatory framework. Perhaps most of all, we are facing the consequences of a dysfunctional split between federal (ratemaking) and state (siting) authority over the transmission grid. Reforms that have succeeded reasonably well in other nations with unified regulatory regimes are perceived as failing in the United States.
The future promises more grid stress: continued electrification, huge new point loads such as "Internet hotels," and rapid changes in flow patterns spurred by competitive power market dynamics. A change in course-in both policy and technology-will be required.
What's needed is a competitive framework that reflects the true value of new transmission capacity. Such a framework is certain to spur technology innovation, adoption, and investment to meet market needs for improved capacity and reliability in an environmentally acceptable fashion. For too long, the restructuring debate has assumed that environmental, competitive, and reliability-related goals are in conflict. New transmission technologies offer a path to break the gridlock and reconcile these important objectives.
The revolution in electric industry structure and governance is at a hiatus. A second electric industry revolution-in the very materials that comprise the