Upgrading the Grid

How to Modernize America’s Electrical Infrastructure

The U.S. electrical grid has hardly changed since the War of Currents, the 1880s fight that saw George Westinghouse’s alternating current triumph over Thomas Edison’s direct current as the preferred method for generating and transmitting electricity. It remains a network of long-distance transmission and distribution lines designed to move electricity in one direction: from giant, lumbering fossil fuel plants to faraway households and businesses. This system has endured because it has proved safe, reliable, effective, and affordable.

Until now, that is. Although the grid is still safe, its reliability, effectiveness, and affordability are increasingly being brought into question. The culprits are twofold. First, recent natural disasters, such as Hurricane Sandy, have revealed just how vulnerable the grid is, increasing the political pressure to invest in making it more resilient. Second, the rise of distributed sources of renewable power is adding new stresses to the inflexible grid. Solar power is wreaking particular havoc, as utilities struggle to forecast and react to variable customer electricity demand that, for the utilities, falls when the sun is shining and swells when it is not.

But help is on the way. Utilities are investing in a smarter grid that will provide unprecedented insight into electricity distribution and consumption. The resulting technological improvements will enable grid operators to better manage the rise of renewable power, resulting in a cleaner, cheaper, more reliable grid than Edison and Westinghouse could have ever imagined.

Much work remains to be done, however. The challenge is to convince regulators that these investments not only are necessary to make the grid more reliable and open to renewable power but also can be cost effective. The struggle stems from a lack of forward thinking by both utilities and regulators; in many cases, the regulators responsible for authorizing these investments are content to maintain the status quo when it comes to improving the grid’s infrastructure, 80 percent of which, in some areas, has not been upgraded since the Kennedy administration. If the

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