Adaptation And Rigidity?

I’ve got to spend the day preparing my fall classes, so I am happy to have a guest post from my knowledgeable friend and colleague Mike Giberson. Mike wrote in response to my claims yesterday that the grid we’ve got is rigid and maladaptive. I was insufficiently clear: the regulatory treatment of transmission has made it maladaptive to changes in other parts of the supply chain. Here are Mike’s observations:

Let’s not get crazy and call the current grid “inflexible” or “brittle” – actually, like many networks, the current grid has proven itself fairly reliable under many different kinds of circumstances. One major failure every 30 or 40 years is not a bad record. Contrary to the remarks of some (was it former Energy Secretary Bill Richardson?), we don’t have a “third world grid.”

But just building more capacity for the existing grid is not the right approach. In my view the big problem creating the blackout was not a lack of transmission capacity so much as a failure of control systems that should have kept the problem localized. Much has been made of the growth in grid traffic over the last decade and the relative decline in grid investment, but some part of that trend is simply more efficient use of transmission resources. (More efficient use of resources due to wholesale market restructuring over the last decade? Why are we surprised?)

But still there is an interesting puzzle – how to decide which possible network improvements should be made – and I don’t think that the current government/industry structure provides a very good answer to this question.

* I’m tempted to think that telecom companies may provide some clues to competitive network designs, but given the apparent overbuilding of networks and collapse of a many telecom companies, maybe they don’t know either.

* It is likely that “real” independent transmission companies – like Trans-Elect and American Transmission Co., for example – are better positioned to do this kind of thinking, but still the decision making process involves a lot of state and federal reg review, and likely also depends a lot on the support of the regulated utilities operating in the region.

I’m also intrigued by suggestions to “fragment” the grid – say break the eastern interconnection into seven or eight blocks that are linked only by DC connections. My understanding is that such a framework would dramatically reduce the complexity of the control problems, but I really don’t understand enough of this approach to judge what the tradeoffs are.