June 16, 2007 / 2:39 PM / 10 years ago

Business Books: Strain on U.S. grid to make blackouts common

4 Min Read

<p>The jacket cover of the book "Lights Out" by Jason Makansi is pictured. Most people in the United States only think about where electricity comes from when the lights go out suddenly. But unless the antiquated transmission grid is fixed, expensive blackouts that bring modern life to a grinding halt will become ever more common, according to this new book.Wiley/Handout</p>

NEW YORK (Reuters) - Most people in the United States only think about where electricity comes from when the lights go out suddenly.

But unless the antiquated transmission grid is fixed, expensive blackouts that bring modern life to a grinding halt will become ever more common, according to "Lights Out" (Wiley, $27.95), a new book by Jason Makansi.

Before the 1980s, power generating companies were responsible for the entire chain of supply, from securing fuel to transmitting power to homes. Deregulation, meant to increase competition, has busted that chain apart and left the wires and substations that deliver electricity as a "neglected stepchild," Makansi writes.

As demand for electricity rises, especially in the hot summer months when air conditioners are humming, the result is an overstretched grid, exploding transformers, brownouts and blackouts.

Transmission only accounts for about 10 percent of the industry's assets, and for decades utilities and regulators have focused on more expensive parts of the system. Now, even electricity generated in ultramodern plants is dependent on the brittle transmission grid. "Imagine driving a Maserati over a road littered with potholes," Makansi writes.

Other parts of the U.S. power system make transmission rough.

Financial engineering has displaced systems engineering, Makansi writes, the worst effect of which was the California power crisis in 2000 and 2001, when power trading deals led to inefficient transmission, rolling blackouts, and spiraling prices.

Dwindling resources such as supplies of domestic natural gas and the exhaustion of local coal mines are likely to exacerbate the problems in coming years.

The U.S. government plans to import large quantities of liquid natural gas, but supplies will be vulnerable to the whims of producer countries, much as OPEC has influenced oil prices.

Increasingly, power plants as far away as the Midwest and even the East are relying on Wyoming for coal. A train derailment, for example, could slow generation, putting stress on other parts of the grid to make up the difference.

Makansi offers solutions, not all of which will be popular. He favors boosting nuclear supplies from about 20 percent today to 50 percent because they emit virtually no greenhouse gases. But he devotes little ink to the possibility and cost of an accident at an older plant.

Power production from coal should be placed much closer to the mine mouth, he says, a move that could push power-hungry industry to relocate to the U.S. West.

Wind power won't take off unless there's more investment in how to store the energy, according to Makansi.

An innovation that is likely to be popular is for homes and businesses to add smart meters and other devices that would let them see how much power costs at particular times and adjust their use accordingly. If they are willing to have short power interruptions when the grid is stressed, or have usage hours like cell phone plans, they could pay much lower rates year round, he writes.

"It should be the consumer who decides how competition should unfold and not the regulator."

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