Modernize the electrical grid

On any given day in the United States, about half a million people are without power for two or more hours. Once hailed by the National Academy of Engineering as the most influential engineering innovation of the 20th century, the North American power grid operates with technology primarily from the 1960s and '70s.

In recent decades the number and frequency of weather-related major outages have increased. Between the 1950s and '80s, outages increased from two to five each year; from 2008 to 2012, outages increased to between 70 and 130 per year. Meanwhile, electricity needs are growing fast. Twitter alone adds more than 2,500 megawatt hours of demand globally per year. It is projected that the world’s electricity supply will need to triple by 2050 to keep up with demand. That will require a significant commitment.

In the past decade electricity risk has increased due to aging infrastructure, lack of investment and policies conducive to modernization, and the threat posed by terrorism and climate change. As the climate changes, the variability of weather events has increased. We are going to see more extreme events. And we’ll see them with greater frequency. Hurricane Sandy appears to be an example of this.

In the aftermath of Sandy, questions were raised about power restoration in relation to extreme weather and climate change. It needs to be understood that a massive, physical assault on Hurricane Sandy’s scale is bound to overwhelm the power infrastructure, at least temporarily. No amount of money or technology can guarantee uninterrupted electric service under such circumstances.

It's also important to remember that the United States is just beginning to adapt to a wider spectrum of risk. Cost-effective investments to reinforce the grid and support resilience will vary by region, by utility, by the legacy equipment involved, and even by the function and location of equipment within a utility's service territory.

The electrical grid must change drastically.

We need a grid that will effectively and securely meet demands of a pervasively digital society in the face of climate change and other extreme events while ensuring a high quality of life and fueling economic growth.

The cost of a smarter grid is estimated at $340 billion to $480 billion. But it should immediately yield $70 billion per year in reduced costs from outages. In a year with frequent hurricanes, ice storms, and other weather events, benefits will be even higher. Currently, outages from all sources cost the U.S. economy somewhere between $80 billion to $188 billion annually. A smarter grid would reduce the cost of outages by about $49 billion per year, and reduce carbon dioxide emissions by 12 to 18 percent by 2030. In addition, it would increase system efficiency by over 4 percent—that’s another $20.4 billion a year.

We've wasted 15 years arguing about the roles of the public and private sectors while our global competitors adapt and innovate.

We need to renew public-private partnerships, cut red tape, and reduce the cloud of uncertainty on the return on investment of modernizing infrastructure. When the nation has made such strategic commitments in the past, the payoffs have been huge. Think of the interstate highway system, the lunar landing project, and the Internet.

Meeting each of those challenges has produced world-leading economic growth by enabling commerce, technology development, and a mix of the two. In the process we've developed a highly trained, adaptive workforce. Now, we must decide whether to build electric power and energy infrastructures that support a 21st century's digital society, or be left behind as a 20th century industrial relic.