By: Bart Tichelman, Serveron Corporation
A large underground pipe bursts, sending scalding hot plumes of steam and water into the air one block from New York’s Grand Central Station. An interstate highway bridge, jammed with rush hour traffic, collapses in Minneapolis. A large power transformer explodes in Lakeland, Fla., and 2,500 residents are urged to evacuate. Besides the lives lost or changed, and the collateral damage left behind, public confidence is shaken yet again.
Our national infrastructure is showing its age, with dire consequences. In these situations, after dealing first with the emotional impact, the government and taxpayers must simultaneously begin to deal with the financial and other challenges of investigation and rebuilding.
North America’s electric grid infrastructure is no exception to this national problem. Let’s look at some selected analyses:
- Approximately 60 percent of the electric power grid’s current assets will need replacement within the next 10 years, and
- The average age of power transformers is more than 42 years.
These ominous statistics underlie the reality of increasing failure rates of key assets such as power transformers. Compounding this are the pressures of increasing average power loads and Electric Reliability Organization (ERO) reliability requirements.
Electricity consumers, benefiting from solid performance by utilities, are accustomed to declining, adjusted for inflation, rates. Rate increases to cover escalating fuel costs are difficult enough to implement. Infrastructure rebuilding costs are an even tougher sell. With $200 billion in asset replacement costs for the North American power transformer fleet, alternatives to replacement must be pursued to mitigate the financial, efficiency, reliability and safety concerns.
There is increasing recognition by power industry executives that the costs of grid failures – which can be immense, but are mostly preventable – increase such risks as business interruption, collateral damage and penalties, lawsuits, share price erosion and balance sheet impairment. Additionally, there are environmental and brand considerations. Furthermore, investors, governments and the public want technology standardization that can contribute to a higher and demonstrable standard of governance and power reliability.
Technology standardization is available that can bring solutions to our industry’s infrastructure problems. Various industry groups – including the GridWise Alliance, research organizations, government, vendors and utilities – are collaborating to develop technology platforms under the umbrella term “smart grid.” Smart grid solutions are being deployed today and forward-thinking utilities are reaping the benefits. An intelligent grid is no longer just a future state. It is evolving now with real-world implementations and delivered benefits. When the term smart grid is used, many outside our industry see it mainly from the “demand-side,” in the form of AMI and demand response applications. While true, utilities have much to gain by implementing smart grid on the “supply-side” to effectively manage aging infrastructure. Smart grid supply-side solutions available right now improve asset utilization, reliability and extend asset life, each of which are critical to addressing our aging grid infrastructure issues.
Smart grid supply-side applications include on-line monitoring of key assets such as our aging power transformer fleet. Power transformer insurers predict only higher, not lower, failure rates going forward. New power transformers have doubled in cost recently and lead times are approaching two years. Given this scenario, the way forward is tricky and the impact of a single asset failure is multiplied from where it was just a few years ago. Monitoring technology has already proved itself by preventing many transformer failures and extending the life of these assets. Other smart grid supply-side applications include communications and automation solutions providing the grid operator broad and immediate information about the grid’s state. A little intelligence in the grid goes a long way toward solving the financial and reliability problems that our aging grid presents.
Today, the GridWise Alliance and other interested parties are seeking to educate state and federal legislators and regulatory agencies about the benefits of an intelligent grid and how it addresses our infrastructure issues. This effort is not vendor-driven. It is a collaborative endeavor by utilities and other stakeholders to show a workable way forward.
As the focus sharpens on efficiency, reliability and safety, the utility industry can expect to see broad, compelling returns on investment from adopting new smart grid technologies and strategies.
Bart Tichelman is the president and CEO of Serveron Corporation, which is a member of the GridWise Alliance.