Jeffrey Leonard has a fascinating article in the Washington Monthly regarding the future of our electrical grid. He seems cautiously optimistic about natural gas as a replacement for dirtier forms of carbon such as coal and gasoline, but there's a hangup. Without major upgrades to our electrical grid, this boom might be for naught.
For the government, the bottom line is this: we need to repair and maintain the entire infrastructure of the grid, and protect it against new threats that could cause catastrophic failure. Congress should give FERC an explicit mandate to set age and reliability standards for critical components of the grid, and make sure that there are sufficient inventories of such components. This is necessary to ensure that weak links in the entire transmission and distribution chain are not created by the failure of some utilities to replace badly antiquated equipment or undertake necessary maintenance. FERC also needs to have sufficient power to deal with a national emergency that might befall the entire bulk electricity system. Congress should clarify such authority and direct FERC to develop national emergency plans that require utilities, power companies, and others to prepare for cyber and physical attacks. And, with the right regulatory framework, the investments necessary to meet all these challenges will be made by the private sector, not the government.
To its credit, the Obama administration has, over the past four years, become increasingly aware of the problems facing our basic grid and taken some useful steps to address them. Recently, for example, FERC has issued a number of administrative rulings to promote more investment in new transmission lines in congested areas and to new renewable energy sources, like wind farms. In addition, the administration has funded a plethora of such renewable energy sources, including three of the world’s largest renewable power plants: a wind farm, a photovoltaic solar array, and a solar thermal plant. And in August 2012, President Obama signed an executive order titled “Accelerating Investment in Industrial Energy Efficiency,” which could help reduce transmission congestion and the need to build new power plants in the future. Steps like these are crucial. But they are not enough.
Thus far, the administration has neglected the basic infrastructure repairs necessary to keep the current grid up and running. It has also neglected the critical linkages between gas and grid. Instead, it has concentrated on adding what are in effect digital bells and whistles to a broken machine.