Andrew and The New York Times are right on this morning. Washington energy policymakers pushed electricity deregulation starting in the 1970s without much thought to what that would do to the grid. Deregulation did lots of good things: lower prices; peak load pricing; more flexible generation; and more innovation. Deregulation did lots of bad things too: Enron price manipulation; reduced safety; and reduced investment in the grid, a collective good not owned by many of the deregulated electiricty companies. This article gives an excellent overview. We never seem to learn that every panacea has its downside that needs to be guarded against.
One of my overarching themes in this blog is Washington's incoherent energy policies. This is a perfect example. Senator McCain and Senator Obama have campaigned hard in support of alternative energy sources, many of which depend upon transmitting more electricity throught the grid. Both also offer strong incentives for electric cars, which we won't be able to charge without big improvements in the grid.
General Motors, if it doesn't go bankrupt by then, plans to bring an electric car, the Chevy Volt, to market in November, 2010. It's a really exciting example of technology that could save the day and truly put us on the road to energy independence. Check out this Charlie Rose interview with Detroit legend, Bob Lutz, who is heading the project.
If I've learned one thing in 36 years of Washington policymaking, it is that no matter how smart you are, any policy change can have unintended consequences that you didn't think of, or that you minimized, at the time. It's more important to set up a self-correcting policy mechanism than it is to try to figure everything out in the first legislative effort. Unfortunately, that runs contrary to Congress's overriding desire to micromanage.
The good news is that Washington reacts to crises. If you look at figure 3 in this article, you'll note that Washington, D.C. imports 99.4% of its electricity. I can't wait for the blackout. If it comes soon enough, we might wriggle out of this.
Grid fixable?
I'd say it's unlikely or maybe what I mean is "only glacially".
The ability of locals to block national priorities is very well-developed and powerlines are favorite targets.
I expect that the more likely outcome will be for juice-hungry industries to relocate to where they can get affordable power as they have done in the past. If wind and solar become attractive, their generation sites will attract users quickly.
Such movement defers the crisis. Along with conservation distributed generation (e.g., rooftop solar) we may be able to accommodate our needs without spending the 60 billion.
Grid fixable?
Energy/grid capacity
I am a resident of Canada. The Province of Quebec has an abundance of good clean hydro generated power. As we do not have an east/west grid infrastructure but only a north/south one, then that is were the power flows. Ontario has suffered from reduced voltage and/or blackouts at times because of our inability to tape into this surplu power. We try to meet peak demands by coalfired and or gasfired generation, thus adding to greenhouse gases. What a crazy world.
Energy/grid capacity
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