The Case Against Fixing the Grid (Again)

The lights went out on the Iberian Peninsula on April 28. Immediately afterwards, the experts chimed in, either providing a reason for the failure or a cure for what ails the Spanish grid, although, as of this writing almost two weeks later, nobody knows for sure what went wrong. The engineers favored the explanation that the Spanish grid had too many renewable power sources and renewables, as everyone knows, lack inertia. So, maybe the grid needed more gas-fired, coal-fired, nuclear power plants or a better connection to France. The Spanish prime minister shot back that Spain was not going to pull back from renewables and the inertial problem could be dealt with. Probably no country in Europe has so much solar potential and so little spare water for conventional generation than Spain. So somebody said something sensible.

But that is not the point. Whenever the grid goes down, people try to fix it, by adding more safeguards, enlarging it, adding transmission, employing sensors, whatever. We think these improvers may have it wrong. Yes, the grid is an immensely complex, huge system—a wonder of modern technology— but the bigger and more complex it becomes, the more likely that a failure (or sabotage) will have major rather than minor consequences. They have been fixing the grid for decades (and enlarging markets to allow more competition) and the grid still breaks down. Consider this partial list of failures in the USA, since the Northeast Blackout of 1965, which first suggested to Americans that electricity service was not a sure thing. ( If we added in the non-US outages we’d fill pages.)

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All these fixes remind us of the comment by famous psychologist Abraham Maslow, “It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”  In other words, maybe the grid itself is the problem, so fixing it does not rid us of the problem. Why continue to sink money into fixing the grid instead of finding another solution? First, engineering studies usually find that big solutions are cheaper than small solutions per unit of output. That is, no doubt true, as long as you don’t count the costs to customers when the grid goes down or the project costs spectacularly more than expected.  Second, system planners may focus more on the probability of untoward events than on the potential harm caused by extremely low probability but high damage events. (In the old days, planners didn’t rely on sophisticated risk analyses. They had inviolable rules of thumb, such as the N-1 rule. The system had to be built to survive the loss of its largest component.)  Third, we see a switch in goals from reliability (don’t let the bad things happen), to resilience (get the system back on  as quickly as possible). Finally, market proponents want big markets to achieve scale and ensure enough competition in the markets. All of this says don’t look for solutions that might decentralize and distribute resources because that path will cause a lot of inconvenience (and possible financial losses) to those in the business.

This may seem theoretical. After all, electric service has been rickety for years, and we’ve survived. True, but the grid faces new short-term challenges. Climate change will surely raise demand, as will data centers (that could go from zero to one-tenth of load within a few years). If the grid is to support data center needs without degrading service for everyone else, everyone else will have to pay to upgrade the grid (even if the data centers make their own power deals). The rest of us might be better off if the data business ran its own separate generation and transmission network.

Back in the days when left-wing and anarchist graffiti artists had real style, one group painted this word of advice, “If the answer is the system, you are asking the wrong question.” Since 1965, sixty years of improving and enlarging the grid, and the lights still go out. Maybe it’s time to try something different? Or, maybe we should just get used to it?

By Leonard Hyman and William Tilles for Oilprice.com

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