Monday, October 23, 2017

Electric Infrastructure: Sky Keeps not Falling

By Steve Huntoon

Every four years, the American Society of Civil [not Electrical] Engineers releases its Chicken Little report on American infrastructure.[1] The report says our energy infrastructure — the second largest category after roads and bridges — should get a D+.

Huntoon

I don’t know if the rest of the infrastructure sky is falling,[2] but when it comes to electric infrastructure, most everything in the report is wrong.[3] [To see ASCE’s response, click here.]

For starters, there is this claim: “With more than 640,000 miles of high-voltage transmission lines across the three interconnected electric transmission grids … the lower 48 states’ power grid is at full capacity, with many lines operating well beyond their design.”

The fact is that 0 (zero) transmission lines are being operated beyond their design capacity. The grid has been and continues to be designed and constructed to cover projected peak demand years in advance. And every line is operated within its design limits. The ASCE claim is alarmist and wrong.

Then there is this: “Often a single line cannot be taken out of service to perform maintenance as it will overload other interconnected lines in operation.”

Palm Springs, CA | © RTO Insider

Hello, this is why most maintenance is performed in off-peak months — as has been done for decades.

And this: “As a result of aging infrastructure, severe weather events, and attacks and vandalism, in 2015 Americans experienced a reported 3,571 total outages, with an average duration of 49 minutes.”

Whoa! “Total outages” is outages, large and small, across the entire country. The total number of people claimed to be affected? 13.2 million out of America’s 325 million population.[4] The average number of people affected per outage? 3,714. Yes, less than 4,000 people per outage. For an average duration of 49 minutes.

And what portion of these 3,571 outages is even attributable to allegedly overloaded infrastructure, the gravamen of the ASCE report? According to ASCE’s own data, a mere nine (yes, nine) outages are attributed to “overdemand.”[5] Major outage causes are weather and trees at 1,069, faulty equipment and human error at 942, vehicle accidents at 419, squirrels at 89, etc.

So much for the present.

As for the future, the report relies on an obsolete projection of future electric demand. Increased efficiency and distributed energy resources, among other factors, have caused the U.S. Energy Information Administration to halve projected growth between 2016 to 2025, from ASCE’s assumed 8% to the current 4%.[6] Using ASCE’s methodology, it means “needing” $467 billion instead of $934 billion over the next 10 years.

ASCE projects spending of $757 billion, so under ASCE’s own methodology, using the current EIA growth projection, we will be spending hundreds of billions more than we need to.

There’s more. Buried in the study is an implicit assumption that the efficiency of electric generation is static; in other words, the capital cost of generating electricity remains constant, so we have to keep deploying the same dollars of investment per unit of increased electric demand.

The fact is that competitive market forces inexorably force down costs and thereby prices. Recent years have seen significant increases in the efficiency of natural gas generation and reductions in the cost of new electric generation capacity.[7] In other words, we are generating more electricity per dollar of capital investment.

Finally, the report doesn’t recognize differences in how infrastructure decisions are made in this county. Other infrastructure, such as roads and bridges, do compete with other governmental spending priorities in political decisions by federal, state and local elected officials.

Electric infrastructure investment is not a political decision. It is determined by long-term planning criteria overseen in large part by independent regional (RTOs) and national (NERC) organizations, that in turn are overseen by an independent, highly regarded federal agency (FERC).[8]

Our electric infrastructure deserves an A.

Let’s save the D+ for the ASCE report.

Steve Huntoon is a former president of the Energy Bar Association, with 30 years of experience advising and representing energy companies and institutions. He received a B.A. in economics and a J.D. from the University of Virginia. He is the principal in Energy Counsel.

[1]http://www.infrastructurereportcard.org/wp-content/uploads/2016/10/2017-Infrastructure-Report-Card.pdf.

[2]For critiques of the “roads and bridges are crumbling” theme, see http://www.npr.org/sections/itsallpolitics/2015/07/23/425292193/surprise-americas-roads-are-improving and http://www.economicpolicyjournal.com/2016/08/donald-trump-and-perennial-myth-of.html?m=1.

[3]This column reprises an article I coauthored 15 years ago, “The Myth of the Transmission Deficit,” https://www.fortnightly.com/fortnightly/2003/11/myth-transmission-deficit. Fifteen years later the sky keeps not falling. More recently I’ve explained why big transmission is a big mistake. http://www.energy-counsel.com/docs/The-Rise-and-Fallof-BigTransmission-Fortnightly-September2015.pdf.

[4]https://powerquality.eaton.com/About-Us/News-Events/2016/PR100316.asp. Eaton, an electric equipment maker, is the source of the ASCE outage information.

[5]https://www.switchon.eaton.com/pdf/journey/business-continuity/cost-and-causes-of-downtime-infographic.pdf.

[6]EIA’s 2017 Annual Energy Outlook projects electricity sales in 2025 of 3,892 billion kWh, which is about a 4% increase over 2016 sales of 3,727 billion kWh.

[7]“Heat rate” (Btu per kWh) declines for natural gas units are shown here: https://www.eia.gov/electricity/annual/html/epa_08_01.html.

[8]There are some states where reliability is more state-overseen than federal. Yes, state commissions face some political pressure to keep rates down … but even more to not have outages.

America’s Energy Infrastructure: Room for Improvement

By Chuck Hookham, Otto J. Lynch and Adrienne Nikolic

The American Society of Civil Engineers’ 150,000 members design, build, operate and maintain infrastructure in the U.S. and globally. While roads and bridges are often the first thing to come to mind when hearing the word “infrastructure,” civil engineers also ensure Americans have access to reliable, low-cost energy from its roots (oil/gas wells, electric generation, etc.) to its delivery at the pump or outlet. As an example, each transmission line is essentially a suspension bridge of steel, concrete, wood, cable and other materials, requiring surveying, site work, foundations, structures and construction — all areas of expertise for civil engineers, working in conjunction with other engineering disciplines.

Who better to assess the health of the nation’s energy infrastructure than civil engineers?

That’s why, since 2001, ASCE’s Infrastructure Report Card has included energy infrastructure, with particular emphasis on electricity transmission and distribution infrastructure. Released every four years, the Report Card follows the familiar A-to-F format of a school report card, grading 16 categories of infrastructure. Prepared by a team of civil engineers with expertise across all categories, the Report Card serves as an unbiased, go-to source for information on the state of the nation’s infrastructure, and has been cited by U.S. presidents, countless elected officials at all levels of government, academics and media outlets.

Unfortunately, much like the overall grade across all 16 categories, the energy grade has been stalled in the D’s. In the 2017 Report Card, ASCE graded the nation’s infrastructure a D+ and energy also received a D+ — both the same as in 2013.

To determine the grades, we assess relevant data and reports, consult with technical and industry experts, and assign grades using the following key criteria: capacity, condition, funding, future need, operation and maintenance, public safety, resilience and innovation.

While U.S. energy systems are sufficient to meet the country’s projected energy needs, the 2017 Report Card highlights both issues of concern and potential solutions. Most existing power lines were constructed in the 1950s and 1960s with a 50-year life expectancy, meaning they were not designed to meet today’s significant demand or the evolving need to integrate distributed energy resources. While projections for energy consumption indicate only modest increases between 2015 and 2040,[1] the country still faces significant challenges in ensuring energy is available where it is needed, including transmitting energy from renewable sources to population centers. We cannot build a new wind farm in Kansas and expect the power to just magically appear in New York.

Aging lines and equipment in America’s multiple power grids are operating well beyond their designed maximum operating temperature and peak load, and congestion creates transmission constraints for delivering power from remote generation sites to areas of demand, also affecting reliability and cost of service.[2] NERC’s standards for tree clearance and vegetation only go so far when confronting increasing extreme weather events and exposure to human threats. And just as one closed road causes traffic jams, one power line outage can affect transmission and distribution to millions. Because of a lack of storage and near constant demand, the interruption of any energy system is immediately felt by the user.

While there are certainly more potholes in America’s roads than there are estimated power outages each year, loss of electric power or gas flow through a major pipeline causes a ripple effect on Americans’ daily lives and the economy. The U.S. energy system is the critical infrastructure that keeps America’s lights on, transportation moving and information flowing. Yet the current system in many parts of the country is not adequately resilient and efforts to change that through investment and improvement are highly politicized, often caught up in larger debates about climate change, fuels and national security.

As part of the Report Card, ASCE also commissioned an independent economic analysis of the investment needs and consequences across 10 sectors of infrastructure, including electricity, by a well-respected economic research group. The series, titled “Failure to Act,” was first released in 2011 but was updated in 2016.[3] [4] The 2016 study examines the investment needs, projected funding and remaining gap for building new infrastructure as well as maintaining or rebuilding existing infrastructure. The analysis also presumes the mix of generation technologies and sources continues to evolve, resulting in new efficiencies and approaches for meeting demand. The study concluded that in electricity, while the investment gap totals $177 billion between 2016 and 2025, more than 80% of the total infrastructure investment needs are projected to be funded, thanks in no small part to the significant involvement of the private sector in the nation’s energy systems.

No American who has experienced an extended electrical outage, lost appliances because of a power surge or seen downed wires in their neighborhood would grade our electric infrastructure an A, nor do the engineers who design, build and desire to maintain that infrastructure day in and day out.

Chuck Hookham, P.E., M.ASCE, is director of NBD services at CMS Energy, a large regulated electric/gas utility and non-regulated developer of energy projects, headquartered in Jackson, Mich. He has more than 35 years of experience in power generation, transmission and distribution, natural gas and oil pipelines and refineries, and infrastructure systems, and is a member of the ASCE Committee on America’s Infrastructure, which prepared the 2017 Infrastructure Report Card.

Otto J. Lynch, P.E., F.ASCE, F.SEI, is vice president of Power Line Systems Inc. in Nixa, Mo. For more than 28 years, he has participated in the design and construction of numerous high-voltage transmission line projects around the world and was a pioneer in the use of LiDAR in the transmission line industry. He is a member of the ASCE Committee on America’s Infrastructure, which prepared the 2017 Infrastructure Report Card.

Adrienne Nikolic, P.E., M.ASCE, is an energy and utilities consultant based in Philadelphia, Pa. She is responsible for assisting energy and utility clients with the management of projects that modernize the grid, and is a member of the ASCE Committee on America’s Infrastructure, which prepared the 2017 Infrastructure Report Card.

[1] U.S. Energy Information Administration Annual Energy Outlook 2017. https://www.eia.gov/forecasts/aeo/executive_summary.cfm

[2] U.S. Department of Energy. Quadrennial Energy Review Energy Transmission, Storage, and Distribution Infrastructure. 2015.

http://energy.gov/sites/prod/files/2015/08/f25/QER%20Summary%20for%20Policymakers%20April%202015.pdf

[3] American Society of Civil Engineers. Failure to Act: The Economic Impact of Current Investment Trends in Electricity Infrastructure. 2011. http://www.asce.org/electricity_report/

[4] American Society of Civil Engineers. Failure to Act. 2016. http://www.infrastructurereportcard.org/the-impact/failure-to-act-report/

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