What Is The Power Grid For?
Who is the master and who is the servant?
In 2023 I wrote a long white paper for the Pacific Energy Institute about how different the power grid could be, in order to stimulate thinking about making a step change from the 20th Century grid to one fit for the 21st Century. You can read the whole paper here.
In the first part of the paper, I wrote:
“The S2 grid depiction given below is based on a small set of core [principles]:
Service to consumers, not control of them
Abundance thinking instead of constraint thinking
Ubiquitous use of buffering for volatility decoupling
Fast (sub-minute to sub-second) grid dynamics at all levels
Focus on reliability and resilience
The first principle says that decision processes for the grid place the consumer at the reference input level, not buried at the bottom of a set of nested decision loops (i.e., driving the decision processes, not being the objects manipulated by them). The second principle means that electricity users should have the amount of energy they want, when they want it, and in the form they want. The third principle changes the intrinsic characteristics of the grid. The fourth principle addresses organic changes to grid behavior. The fifth principle places a premium on grid planning and operation that serves the users, in line with the first principle.”
The first principle should not have to be stated but in recent years there has arisen a widely promoted view that electric grid operators should dump grid constraints onto customers so that customers are put into the position of serving the grid rather than the grid serving them. A whole industry has grown up around how to do this in both technological and regulatory terms. How peculiar!
The electricity delivery systems (collectively “the grid”) are operated in a unique way, the industry having been granted regulated monopoly status due to practical issues with infrastructure deployment and operation. It used to be that if you asked people at the electric utilities what the job was that they did, almost universally they would say “we keep the lights on.” In fact, the top three issues for electric utilities were:
reliability
safety
regulatory compliance
Of course they had fiduciary responsibilities as well.
Somewhere along the way, the idea that customers should buy appliances and home equipment that could be manipulated automatically to accommodate grid constraints caused by insufficient grid (generation and/or delivery) capacity became all the rage (except among electricity customers). Vast amounts of money were spent on new technologies to make all this possible, new kinds of businesses arose to insert themselves between the electric utilities and consumers, and all sorts of regulatory schemes were promulgated to get consumers to serve the grid by compromising their quality of life whenever the grid proved to be inadequate to serve what the customers.
Now, I have worked with many people in the industry for more than 20 years and I have enormous respect for all the folks who work hard to keep the lights on. But here is an example of the kind of pressure they are put under: many regulators have glommed onto an idea that allows them to avoid permitting electric utilities to spend money that would necessitate rate increases. The electric distribution lines at many utilities are close to fully loaded now and the push to electrify transportation and buildings would add enough demand to overload those lines. Rather than approving utility expenditures to fatten up the lines (called “re-conductoring” in the industry) many regulators have bought in on a concept called Non-Wires Alternatives (NWA). This means that the utilities must find ways to get customers to cut down usage whenever the lines are threatened with overload. To that end, customers are supposed to agree to let their thermostats and various appliances be controlled by or at the insistence of the electric utility (called “demand response”) so as to back off usage when demand becomes too large for the line capacities. This means homes that are overly hot in the summer, overly cold in the winter, not doing laundry or cooking when the customer wants, etc., all in service of the capacity constraints of the utility.
But this is a trap. It is a trap because consumers will opt out or ignore the utility signals when conditions are bad (like a summer heat wave, a winter cold spell, a forest fire, or other emergency), just when the cutback is needed most to protect the overloaded lines. Unfortunately, since the wires were never upgraded, when this happens there is no Plan B to fall back on and so outages will occur under some of the worst possible conditions.
In California, electric vehicle owners are told not to charge their cars between 4 pm and 9 pm due to generation ramp constraints caused by massive amount of solar energy being injected to the grid (when the sun goes down, the fading solar supply must be replaced by ramping up controllable forms of generation- too much solar means not enough ramp-able generation). In northern England, homeowners, having been pushed into adopting heat pumps, are now being told not to heat their houses at night in the winter!
If you accept principle 1 above, then principle 2 follows directly: use abundance thinking instead of constraint thinking. Most businesses work that way, but not the electric utility business, which is rife with constraint thinking. I once had a chief economist at an electric system operator tell me, “I see no reason why people should be allowed to use as much electricity as they want.” Excuse me? Why does the grid exist, again? Back around 2014, the US Department of Energy (DOE) had a statement of principles about the future grid which included, “Users should be able to use as much energy as they want, whenever they want it, and in whatever form that want.” That was a pretty good description of abundance thinking for electricity. That statement no longer exists at DOE; instead they have funded massive amounts of effort to turn consumers into grid servants. However, they reckon not with human nature. There is a reason why incentivized demand response programs top out at about 20% of customer participation and then decline thereafter.
Principles 3 and 4 above have to do with technical aspects of grid structure an operation. But principle 5 hits directly home for consumers: their two primary requirements for electric service are availability and affordability. Once that is established, then a whole bunch of grid characteristics become operative, including what is called resource adequacy (basically supply abundance) and the related concepts of resilience (the grid standing up to many stresses without failing) and reliability (handling the failures that do occur).
So why do electric utilities not think in terms of abundance? I believe they want to, but public policy pushes them into constraint thinking.
Reference
Jeffrey Taft, “Envisioning an S2 Grid,“ July 2023, Pacific Energy Institute, available online: https://pacificenergyinstitute.org/wp-content/uploads/2023/09/Envisioning-an-S2-Grid-final.pdf