The Failure of the Grid – A Possibility?

Released last Friday was a report from the Department of Energy concerning the power grid, and the extreme need for its renewal and expansion.

Highlighted is the lack of a national policy for energy production or distribution, and the problems encountered when there are changes to implement.

Despite the fact that we’ve been talking about energy independence for decades, we still don’t have a decent national policy, which has made planning at any level extremely challenging. Nearly everything about the energy infrastructure—generating capacity, transmission lines, research on new technology—requires decades of lead time. Without a clear statement of the intended national goals and the planned route to meet them, any investment in infrastructure or R&D has been extremely risky. Incentives for things like fossil fuel exploration and renewable power generation have come and gone from the federal budget with regularity, changing the economic equation for any long-term project on a nearly annual basis. Environmental regulations, such as a carbon tax, have had the air of inevitability for years, but the lack of an definitive structure during that time makes planning for the actual implementation impossible.

The lack of a national plan also means any infrastructure work faces a patchwork of federal and local regulations. For example, even a single generating plant might face environmental reviews by the Departments of Energy and Interior, as well as the EPA and local governments. For transmission equipment, which frequently crosses state lines, regulatory agencies within the states will also get involved. The net result is that any project will often be reviewed by a half-dozen different government agencies, each with its own set of distinct priorities and long-term plans.

Not only is the government badly fragmented, but business is too. The report lists the huge number of companies involved in producing electric power in the US as follows: 220 investor-owned utilities, approximately 930 rural electrical cooperatives, and roughly 2,000 public, non-profit groups nation wide. There are, of course, larger, regional organizations, but these have to coordinate the actions of this group, which is undoubtedly challenging, especially since different states now have different targets for renewable energy production and carbon emissions.

The report continues explaining how changes are both expensive where they should not be, and counterintuitive to those who would try to make strides in bolstering the grid.

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This is just another large item on the list of things to do for President Obama, as we begin to repair the infrastructure of the country, long neglected.

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