General Counsel Nahigian Strategies, LLC

With an increasing focus on developing and utilizing alternative energy sources to ensure a secure and reliable energy supply, the need is becoming abundantly clear for a modernized energy infrastructure capable of facilitating such innovation and enhancing America’s resilience. The U.S. electrical power grid is a critical component of our national defense and infrastructure, but it is quickly reaching the end of its design cycle. Instead of relying on energy-inefficient fixes to mend an overburdened and outdated system, modernization of the grid that enhances national resilience, energizes the economy, and empowers consumers must become a priority. The practical adoption and implementation of a next-generation electrical power grid – Smart Grid – will reduce the consequences of the electrical grid being targeted by terrorists or adversely affected by a natural disaster while improving energy efficiency and reliability.

Hampered by rising demand, a lack! of investment in transmission facilities, and federal policies that deter increasing domestic energy supply, the existing grid has been taxed to the limit and lacks the capacity to meet the Nation's growing energy demand. The existing grid does not possess the capability to mitigate the occurrences of blackouts and their adverse consequences, provide incentives to consumers to reduce consumption, or improve environmental impacts through the utilization of more renewable resources. These inadequacies place in peril our national, economic, and environmental security and are unsuited to meet the long-term demands of the digital age. The task of hardening our critical infrastructures against a catastrophic event must begin with efforts to bring resilience and security to the electrical grid, which connects them all.

An Aging Grid

The U.S. electrical transmission and distribution system – installed over a half-century ago – is the largest machine in the world and powers virtually every aspect of American society.! However , it is ill-suited to meeting America’s needs going forward.

The dramatic increase in the number of new and larger homes, rising urbanization, and the widespread adoption of digital technology and other energy-thirsty devices has overloaded our electrical delivery system and driven up costs as utilities search for new sources of energy to meet demand. The electric grid is further burdened by public policies inhibiting the increase in domestic energy production.

The most significant corollary to our increased dependence on the electrical grid is the increased consequences of power fluctuations. Power fluctuations, which were once merely an inconvenience, now are a major grid vulnerability that threatens our Nation’s security and cost tens of billions of dollars in lost commerce each year. Should the electrical grid become a deliberate target of a terrorist attack, a casualty of a natural disaster, or simply malfunction, an overloading of the system would create a ripple effect that could bring our economy to a standstill, jeopardize our national security by disabling defense capabilities and imperil lives through interrupting basic needs including heating and cooling, as well as emergency services.

Blackouts and power quality issues are not the only reason for concern. The inefficiencies of the energy sector also burden the economy. Of all energy consumed to produce electricity, only 30 percent reaches consumers in the form of electricity; transmission and distribution losses are valued at more than $25 billion a year. Adding more generators only increases these inefficiencies. Further exacerbating the problem is the physical limitations of the current grid. The aged grid has become so problematic in its limitations that it is incapable of employing new and renewable energy generation sources (e.g., solar, wind, hydro) at a capacity that justifies building new generation plants powered by such clean domestic energy. In some areas the energy produced outweighs the transmission capacity by 6 5 percent. There is a vast need to increase the efficiency, consistency, and capacity of our electric infrastructure.

The increase in demand for electricity and other sources of power is vastly outpacing the increase in power supply. The challenges and opportunities of the new century dictate that we not rely on an outmoded electrical grid system. The existing grid is a liability to our nation’s security and resilience.

Modernizing Towards a Smarter Grid

The Smart Grid should be the centerpiece of modernization of the domestic electrical grid. The Smart Grid is an integration of advanced, two-way communications systems and sensors into the electrical transmission and distribution network enabling utilities to optimize grid performance in real-time, provide incentives to consumers for reducing energy consumption through demand response, and integrate renewable energy resources into grid operations. This smart system allows utilities to understand demand and regulate supply, and most importantly for the purposes of resilience, either reallocate electricity during times of crisis or peak demand or prevent outages through proactive diagnosis of the grid and its individual elements.

Current Grid Deficiencies

The functional deficiencies of the current electrical grid include, but are not limited to, the following:

• It is an inefficient push system that requires utilities to flood the system with electricity – much more than is needed – to ensure reliability and meet demand.
• It is based on a consumption- and revenue-based business model that offers no incentive for utilities to conserve energy.
• It is woefully inadequate as its “static” design does not allow utilities adequately to monitor data pertaining to electricity consumption or outages, and thus respond and recover in the wake of a catastrophic event.
• It places in peril the ability of our military and ! homeland security forces to fulfill their missions to defend Americans .
• It veils the true costs of electricity until month’s end and, in turn, has a limited ability to provide end-users with the control to understand and regulate their individual electricity consumption.
• It requires maintenance costs from remote and automated disconnects/reconnects and trips to the field.
• It causes a lapse of a significantly higher number of minutes without power incurred by end-users during outages during the restoration process.
• It lacks the communications overlay that would enable the expansion of existing cyber security capabilities.
• It has a more significant carbon footprint due to higher peak demands, higher supply and consumption, a lack of incentive to conserve, and inability to utilize fully the potential of renewable and alternative sources of energy.

Each of these deficiencies cut adversely against our Nation’s resilience in that the current grid lacks the ability to sufficiently protect itself and related critical infrastructure, reduce our dependence on foreign sources of energy, conserve energy, capitalize on alternative sources of energy, improve our environment, and lower end-user costs. Thus, modernization that would improve efficiency and reliability would have a stabilizing effect on the economy, national security, and the energy-dependent critical infrastructure.

The Smart Grid offers the next generation of power delivery and furthers the ability of the grid to continue to provide power in the immediate wake of a catastrophic event. But the Smart Grid’s benefits span far beyond resilience as a modernized grid would have a dramatic positive impact on the environment by lowering consumption and increasing the utilization of renewable energy sources, and provide incentives and control for consumers and businesses to make decisions regarding their individual energy consumption.

Part II of this article will detail the benefits of the Smart Grid and examine impediments to its development.

1. National Energy Technology Laboratory. The NETL Modern Grid Initiative Powering our 21st-Century Economy: Modern Gird Benefits. Study Conducted for the U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability. August 2007.

2. Ibid

3. Power Troubles: Transmission Lines Can’t Handle Demand. Watertown Daily Times. February 27, 2008.