Like a physician with her stethoscope at the outset of a check-up, astute shareholders and directors should use the level and trend of a utility’s market-to-book ratio (MtB) as one of the first...
Evolutionary directions for electric system architecture.
the way power flows are accommodated by the T&D system. This might include techniques for increasing power flow capacities along existing wires or existing rights-of-way, such as higher-density power flows and direct-current (DC) links, as well as techniques for more optimally controlling power flow along different links, such as active phase-angle shifting supported by detailed synchro-phasor measurements.
In addition, technological development might make T&D facilities less objectionable by allowing smaller profiles or economical underground siting. At the distribution level, technology could enable not only bi-directional power flow but also options for deliberately islanding portions of the system, i.e., allowing microgrids of various scale whose power quality and reliability is negotiated locally rather than supported by distant resources. The overall result is that providing the same level of end-use service requires a smaller amount of visible metal between generation and load.
Along the policy continuum, traditional T&D build-out is either resisted or promoted. At the resisting end, permitting of transmission projects would take longer and projects would be delayed or denied by public opposition and environmental regulations. Cost and benefit allocations become more contested and prolonged, and there’s pressure to minimize power transfer rates among states or control areas. Policies might also incentivize distributed generation that relieves some transmission loading.
On the other hand, increases in power outages, congestion costs, and concerns about national security or economic health could plausibly lead to more public tolerance of T&D facilities, or increased use of eminent domain to force their permitting. At the same time, policies such as tariffs and incentive regulations for demand response or distributed generation, aiming toward relieving T&D congestion, might fail to achieve timely results. Consequently, at the other extreme, legislative and executive branches might support an interstate highway-style build-out of a national transmission network, and traditional T&D facilities could be sited relatively freely.
In considering these two dimensions of uncertainty, with plausible extremes at each end, the analysis in effect creates a two-dimensional matrix with four distinct quadrants, representing the four possible combinations along the two axes. The next step involves imaging what the evolving T&D system might look like in each of these four quadrants.
Function and Form
Figure 2 labels the scenarios I through IV in the clockwise direction, starting from the upper left. 5
Quadrant I presents what might be called the “beefy” scenario, with policy that favors traditional build-out while featuring low technological advances. It’s characterized by many more wires, towers and poles. Quadrant II represents the “nimble” scenario, which combines a robust T&D backbone with more intelligence and flexibility. Quadrant III is the “radical” scenario, in which advanced technical capabilities substitute for traditional power lines. The scenario in Quadrant IV, finally, might be called the “T-Rex”; with neither bulk nor smarts being added to the grid, its functionality might be expected to decline over time, with alternative energy carriers (for example, hydrogen) deploying new technologies and taking the place of large-scale electric power delivery.
Consider the three properties of function, operation and form for each scenario. The “beefy” T&D system continues to fulfill the same