Connectivity for power utility grids driver#
Connectivity for power utility grids Offline#
Connectivity for power utility grids series#

Connectivity for power utility grids Offline#

The views expressed are those of the author(s) and are not necessarily those of Scientific American.Since that day in June, Ercot has kept more than 2,500 megawatts offline through ECRS during peak hours each day - and dramatic price spikes have been common.

Connectivity for power utility grids series#

I highly recommend the Future of Electric Utility Regulation Series by Lawrence Berkeley National Laboratory for a deep dive on technical and policy issues related to the future of the electric grid. The trends in grid costs revealed through my analysis are just a small part of an ongoing debate about the future of electric utilities and paying for the electric grid. Thus, as more customers reduce their kWh consumption using solar panels, the cost of the grid per kWh of energy sold will approach the high values seen in the 1960s - and electricity prices will go up for everyone. Rooftop solar panels reduce the amount of kWh customers buy from the utility, but they don’t decrease the cost of connecting customers to the grid. This finding is important because it relates to the ongoing policy debate related to paying for the grid even as more and more utility customers adopt rooftop solar panels. In other words, the number of customers connected to the grid determines how many power lines, transformers, meters, and utility staff are required to reliably deliver electricity.

Connectivity for power utility grids driver#

This indicates the main driver of grid costs is the number of electricity customers, and not how much energy they use.

Why? Because the average customer used about half as much energy in 1960 versus the average customer today. However, when we look at the cost per kWh of energy sold, the cost was considerably higher in the 1960s. When we look at costs per utility customer, as shown in the first graph, the total cost has been remarkably steady since 1960, with a peak during a major buildout in the 1970s and a growing peak today. Perhaps the most interesting conclusion to be drawn from the graphs comes from their differences. It’s hard to say exactly what’s behind this increase, but it’s likely related to grid hardening efforts in response to storms such as Superstorm Sandy, and building out of transmission and distribution grids to accommodate both large-scale and distributed renewable energy. Second, total grid costs per customer and per kWh have increased significantly in recent years. First, administrative costs are more than a third of total grid costs, indicating that a significant portion of the price we pay for electricity goes to just running the utility business. Both of the charts illustrate some surprising facts about the cost of the grid. I show the costs in two ways: normalized per utility customer, and normalized per kilowatt-hour (kWh) of energy sold. Credit: Robert Fares using FERC Form 1 data and EEI data The decrease between 19 was likely driven by increasing energy consumption rather than decreasing service costs. Transmission is the high-voltage lines that move power over long distances, distribution is the low-voltage lines that bring power into buildings, and administrative costs are for managing customers’ accounts, reading meters, utility office buildings, administrative staff, etc.Īverage annual transmission, distribution, and administration costs per kilowatt-hour (kWh) of energy sold declined rapidly between 19, but have been approximately 2.5-3.5 ¢/kWh since 1980. They show average transmission, distribution, and administrative costs for U.S. Similar graphs appeared in a paper of mine recently published in the journal Energy Policy. The end results are shown in the graphs below. Federal Energy Regulatory Commission (FERC) and the Edison Electric Institute (EEI) to get an idea of just how much the U.S. I dug through years of data collected by the U.S.

The wires, poles, substations, transformers, control center operators, utility line workers, and hundreds of other components and individuals that make up the electric grid are absolutely vital - yet their cost is rarely included in critical discussions about the transformation of the electricity sector and pathways to decarbonization. We often hear news about the plummeting cost of natural gas, wind, and solar generation (and the poor prospects of coal), but almost no attention is paid to the cost of the grid itself.