Reading Notes: The Grid

About the fraying wires between Americans and our energy future

One of the most recommended books by people I met in the renewable energy ecosystem, The Grid by Gretchen Bakke is a riveting dive into a fundamental piece of infrastructure that moves American society — the electrical grid.

Bakke goes into the past, present and future of the grid and its stakeholders such as utilities and consumers. We all interact with the grid on a daily basis, but we just don’t think about it. We pay the bills to ConEd or PG&E but try to spend as little time as possible dealing with them. But as we transition the world from coal, oil and gas into one that runs on clean electricity, understanding this landscape becomes increasingly important. The Grid is a highly informative and valuable resource.

Below are some of my bookmarks. We’ll start with a noteworthy quote:

“The grid, as should be clear by now, is not a technological system. It is also a legal one, a business one, a political one, a cultural one, and a weather-driven one, and the ebbs and flows in each domain affect the very possibility of success of any plan for its improvement. If the integration of systems across domains, especially the irritating bits, cannot be made to flourish, the problem will be not with the machinery we use or the technology we govern, but with us.”

The Role and Controversy of Smart Meters

Smart meters were introduced in the US over the past decade, starting around 2012. Before this, utilities had to guess when there was an outage based on customer phone calls. Smart meters allow utilities to know if your power is out, but they also inform the utility about most of your electricity consumption. Smart meters were introduced at a point where utilities were suffering from attenuated revenue streams. The new meters would help combat this.
Utilities are also no longer in control of the relationship between generation and consumption. Power plants produce unpredictable amounts of electric current. And consumption is down after peaking in 2007 across the grid and across the nation.

“Utilities have lost their iron grip in the electricity business and are forced by circumstances to look elsewhere for stable revenue streams. It’s in the demand side — one of the lone domains left to them.”

By controlling and monitoring consumer behavior as users of electricity, utilities can control their revenue streams. Smart meters allow utilities to take steps to limit electricity usage at moments of peak demand. Before smart meters, 10% of a utility’s resources were always on standby for these moments of peak demand. It costs utilities a lot of money to turn on and maintain the power plants that are reserved for periods of peak demand. These power plants are also the dirtiest, on top of being expensive. Thanks to smart meters, utilities can charge a lot more money for the electricity that is more expensive for them to make — pass their expenditures onto the consumers.

Utility intervention caused a lot of controversy across the country. Some people, like the Taorminas, took out a gun to prevent installers of smart meters to go into their homes.

Many people found smart meter installations intrusive and felt like they didn’t understand what utilities are doing — and had no say in it.

More consumers are now trying to generate electricity on their own. The idea of “net metering” comes with smart meters, which is when homemade elctricty from rooftop panels can be fed back to the grid. The utility pays you for this power and the smart meter helps them keep track of how much they owe you at the end of each billing cycle.

Smart meters don’t benefit the consumers — at least not directly. They primarily benefit utility companies. Utilities vastly underestimated the degree to which the reformation of the industry would negatively impact them. There is also an increasing appetite for “disrupting” the grid, as people of Boulder were voting for a municipal takeover of their grid.

Utility death spiral

“It is as if the utilities woke up one chilly morning in 2014 and realized that their ship was about to be sunk.”

The utility death spiral is where, as grid maintenance costs go up and the capital cost of renewable energy comes down, more customers will be encouraged to leave the grid. This pushes the grid costs even higher for the remaining customers, who then have even more of an incentive to go off-grid and be self sufficient.

America’s for-profit utility companies are fighting for their continued survival. Many are dying. Some say that in a generation, kids won’t know what the word utility means anymore. The conversation about solutions to the revenue problem are only just getting started.

Reaching Paris Agreement

The author points out the guidance from the 2015 Paris climate change talks:

1. Eliminate burning fuels wherever possible in favor of using electricity
2. Generate electricity with clean power sources such as wind and solar, and eliminate coal and gas-fired power plants
3. Dispatchability and storage for solar panels so that they can be part of the renewable energy revolution

But we also need to reimagine electricity use in a way that’s not capped by existing renewable solutions such as rooftop solar. We need to think about other possible electric futures for storage as well.

Why Hawaii loves solar

Hawaii is not the sunniest place in the US or the most cloudless. But the solar power generating capacity in the state has doubled every year since 2005. It has the second highest penetration of rooftop solar in the country after Arizona. Also the quickest payback on the investment anywhere: A home-owned rooftop solar system will pay for itself about 4 years.

The main reason why Hawaii loves rooftop solar is because it is the only state in the nation that still makes electricity from oil, which is floated over on tankers from the mainland. So it has electric rates more than twice that of any other state, and almost 3.5 times the national average. More than 12% of Hawaiians now have panels on their roofs. They produce more than 100% of the state’s electricity needs.

All the power made by rooftop solar systems is fed by law back into the public grid. These panels are essentially tiny power plants that produce 10-kilowatt packages of power that in aggregate, can become megawatts. they’re provided by any private citizen who manages to set up the initial investment.

These small producers will still consume power from the grid at night when there is no sun and on cloudy days.

How net metering works

This turn toward economic rationality and away from ideological points of argumentation for solar has caused a lot of people in America who don’t think much about the environment to adopt home solar systems. While those who do care about making the world a better place by making power differently were always an easy sell. Together, the two groups have contributed to a 1,500 percent jump in solar panel sales since 2009, and not just in the Southwest or on tropical islands.

When considering rooftop solar, you hire an installer/contractor who comes to your roof to get a sense of how many panels would be needed. They give you a rate per month for the panels, to zero out the owner’s electricity bill.

Once the panels are set up, they feed roughly the same amount of electricity into the grid over the course of a year. The numbers might not cancel each other out day to day, but the long-term amount of power in and power out is more or less equal. Electric bill becomes cheaper or nullified.

Designing Integrated Solutions

There are three problems of different kinds that meet at the grid and get stuck there:

1. How to deal with the combined interests of many different players — which does, and should, include global warming.
2. How to deal with the legacy technology, which the grid we’ve got
3. How to deal with the fact that the grid is made and run by humans, who are by their nature rather shortsighted. Rather than letting it all go wild, giving everyone a blunderbuss, a dedicated banker, and an agent of the press — the way the grid was won in the late 1880s — a more practicable solution would be to design something radically integrative.

The author proposes the approach of a “platform,” to use a digital concept for solving mechanical or “analog” problems. Uber is a platform. It takes drivers driving around and organizes them into a means for nondrivers to also move around, in the same cars. It brings existing resources together and creates a functionality where once there was only traffic. Facebook and Twitter are platforms for sharing information and opinions across vast social networks. In the process they produce actively intertwined relationships between strangers as well as friends.

These ties move news more quickly than more traditional media and thus allow for concerted action and organization significant enough (at times) to bring down governments. This pattern of using platforms to organize unrelated and competing interests into new social and economic formations is a comfortable one now, in America. Comfortable enough that some already exist for our grid.

Bakke calls for a grid capable of bringing together different value systems as much as different mechanical systems into a functional whole.

There are many other interesting topics covered by the book, such as vehicle-to-grid enablement, nanogrids, microgrids, and more. There is also a fascinating look at the history and monopoly of utilities, and how/why the grid became what it is today. The Grid left me thinking of an energy future that has:

• Better integration between the grid and clean “power plants”
• Increased ownership and transparency by customers. Perhaps a more direct connection between energy producers and consumers
• Clean energy that is easily stored and dispatchable
• A more open and efficient platform (exchange) for energy. More revenue and value streams beyond selling electricity to the grid by rooftop solar panel owners (net metering) or EV owners (V2G)

It’s going to take a lot of work and coordinated effort to get there, but it feels inevitable.