Tuesday, April 30, 2013

Improving the Grade Score of Energy Infrastructure

The Report Card for America’s Infrastructure, released by the American Society for Civil Engineer’s (ASCE), revealed failing grades for much of the system that consists of the roads, bridges, ports and the energy infrastructure. The infrastructure, that is made up of the power generation plants and the electrical transmission and distribution systems, brought home a D+ on its report card. The US power grid, that is the entire combination of these elements, is in dire need of upgrades and rebuilding.

Suffering through a lengthy power outage will make any person aware of the importance of the grid and how it can have a devastating, negative, economic impact when rendered inoperable. The aging system becomes more compromised due to increased demand and reliance by consumers. Power outage occurrences of significant proportion increased dramatically from 76 in 2007 to 307 in 2011. Operational failures were not far behind weather related failures as the cause. The introduction of new energy sources, while retiring older ones, has also strained the reliability.

Hurricane Sandy alone cost the economy $30 billion to $50 billion in economic loss. Service interruptions are expected to be near $200 billion per year if investments in the system are inadequate. The ASCE puts the required investment figure at a minimum of $1 billion, which is an apparently small price in comparison. In addition these costs are being passed on to the consumer, even though the actual cost of power has decreased, as reported in a recent article in Power Engineering Magazine.

There are many hurdles and obstacles, even where improvement agreements have been reached. Red tape is threatening progress in many areas. Simply creating new energy sources, combined with the rapid expansion of natural gas production, will not have much of a positive effect on the overall electrical transmission system if there are little or no improvements to the infrastructure.

Fortunately there are some potential heroes that are poised to enter the arena. Private financing is used for electrical transmission upgrades, unlike other forms of infrastructure that relies on funding through government. Investments in the grid system are always focused where required and can have a positive affect in a relatively short time. This is accomplished through targeted investment in competitive markets that reduce the cost of electrical transmission delivered to the consumer. As Sandy had a negative impact on the economy, investing in the nation’s energy infrastructure can have long term, positive results. Improving the grid with the necessary investments would prevent the loss of $656 billion in personal income losses, save over 500 thousand jobs and retain over $500 billion in GDP that would be otherwise lost.

Government is still required to keep us on the right path. Even though funding is primarily private, policies must be in place that are long term and are geared to advance economic growth. Our electric grid is the single most important system that keeps our economy motivated and moving forward. Bringing it up to modern standards of security and efficiency are paramount to our national overall growth.  (Power Engineering, 3/6/2013) 

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