Power industry unveils $100B upgrade plan

The electric power industry, under scrutiny since the August 14 blackout for allowing the nation's power grid to crumble into the worst state of disrepair in more than 30 years, Monday unveiled a $US100 billion campaign to modernise the grid

The electric power industry, under scrutiny since the August 14 blackout for allowing the nation's power grid to crumble into the worst state of disrepair in more than 30 years, Monday unveiled a $US100 billion campaign to modernise the grid.

In a 250-page report released today, the Electric Power Research Institute (EPRI), a Palo Alto, California-based nonprofit consortium of utility companies focused on science and technology research, concluded that there's an urgent need to introduce modern information technologies into the nation's dilapidated network of interdependent regional power grids. Such an effort, however, will be neither easy nor cheap and hasn't met with unanimous support from utility stakeholders, the report warned.

Earl Nye, chairman of the EPRI board of directors and chairman and CEO of Dallas-based TXU, said in a statement today that "the extreme complexity of the situation — adequacy of the power system, economics and the environmental consequences of our action —" were the driving forces that brought the industry to what he called a "critical juncture."

In a similar statement, Tennessee Valley Authority CEO and EPRI board member Glenn McCullough, who also chairs EPRI's Membership and Strategic Issues Committee, called the report a "declaration of interdependence" for the industry.

The technological centerpiece of the plan is what is known in the energy industry as a "smart grid" capable of monitoring its own health at all times, alerting officials immediately when problems arise and automatically taking corrective actions that enable the grid to fail gracefully and prevent a local failure from cascading out of control, as happened 10 days ago.

Critical to the smart-grid program is the ability to gain digital control of the power grid "by replacing today's relatively slow electro-mechanical switching with real-time, digital electronic controls", the report said. In addition, EPRI envisions a massive effort to create "an interactive power system that is merged with the communications network into a new 'mega infrastructure' of real-time information and power exchange."

That integration would yield a two-way business and consumer "energy information portal," through which businesses and consumers could make energy consumption decisions based on the availability of real-time pricing information. However, the report warned that any deployment of innovative IT solutions that lead to "disproportionate allocations" of cost savings to the consumer (and not the utilities) would do little to encourage utilities to implement those IT advances.

IT-enabled cost savings as well as new efficiencies and greater reliability are urgently needed. In 2001, for example, the US economy experienced approximately $120 billion in lost productivity as a result of poor power quality and poor reliability, according to Clark Gellings, EPRI's vice president for power delivery and markets. And with total retail sales of electricity at $220 billion, the cost of lost productivity equals half of what US businesses spend on power in the first place, according to Gellings.

Gellings added that a national electricity-communications superhighway that links generation, transmission, substations, consumers, and distribution and delivery controllers is needed to create a modern power grid. Deployed throughout the system would be sensors that send time-stamped information to a central control center where it would be subject to computational analysis. On a national scale, that process would be daunting, according to Gellings. In California alone there are 55,000 power grid nodes, including critical pieces of electrical infrastructure, that must be monitored.

"At this time, the computational horsepower doesn't exist to do this, the software doesn't exist, and the low-cost sensors don't exist," said Gellings. "To make this work, we have to have communication, control and a lot of secure data flow."

Utility owners and operators told EPRI that communications upgrades are imperative for improving the security of the grid. "A wide-area, secure communications system is needed to replace use of the internet for critical monitoring and control functions," the report warned. "There is nearly universal agreement that a new, private communications network must be designed from the ground up to provide required levels of security, including authorisation, authentication, encryption, intrusion detection and redundancy."

Work on the Integrated Energy Communications System Architecture is currently under way at the Electricity Innovation Institute, a subsidiary of EPRI.

EPRI recently tried out a pilot for a fully modernised system at the World Financial Centre in New York. The system was integrated so that real-time pricing signals could be received by a computer and transmitted to an energy management system. The system monitored power usage as well as temperature, humidity and the level of volatile organic compounds so people in the building were comfortable and not subjected to "sick building" syndrome. According to EPRI, the system worked well, but it's expensive.

In its report, EPRI also warned that much remains to be done on the political front to push the power industry into the 21st century. EPRI paints a picture of an industry that has taken a "treading water" approach to modernisation. "In the meantime, an aging, obsolescent infrastructure continues to grow older, and little planning is being done to maintain one of the country's key strategic advantages," it reported. "Any effort to effectively change the terms and conditions of electric service, and the physical and institutional infrastructure on which that service is based, ultimately depends on a political sale."

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