Rebounding from Sandy, for economic development, Part II
- December 17, 2012
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Yesterday, in the first segment of this two-part interview, ("Rebounding from Sandy, for economic development") we discussed the role that smart grid played (or did not play) in Hurricane Sandy, the relative merits of hardening and resiliency and the broad economic benefits of grid investments and grid resiliency. Our source, Massoud Amin, is an IEEE senior member and professor of electrical and computer engineering at the University of Minnesota, where he also serves as director of the Technological Leadership Institute. Amin has researched and written about smart grid concepts and solutions for two decades. Some of his work is available on the TLI's website.
Intelligent Utility: It strikes me that the smart grid's value proposition would improve if it was in the context of other policies regarding, for instance, settlement in flood zones, distributed energy resources at the residential and commercial level. Do you think about smart grid in that broader societal context? And if so, what's your thinking?
Massoud Amin: We need "all of the above." It goes back to identifying and assessing risks. We've done this before. I directed the security effort after 9/11 at EPRI for our nation's utilities. We looked at everything, from cyber security and communication networks to physical infrastructure.
The societal impact is that, ultimately, consumers unfortunately carry the burden, either from increased outages, disrupted quality of life or increased rates. We need to look at interdependencies and understand how one factor affects another, and then protect critical assets based on risk.
Remember, risk is dynamic. Our sense of it needs to be updated at least annually to ensure we're protecting the right assets. Has the risk portfolio or the spectrum of risk changed? With climate change, the variability of weather events has increased. We are going to see more and more extreme events that have never happened before and we'll see them with greater frequency.
So dynamic risk should guide us, based on evidence and data. And the old way of doing these system upgrades needs to be revisited and updated because the whole environment is changing. We need a new set of tools and a fresh set of approaches in order to be more dynamic, more adaptive in terms of resilience and security.
Intelligent Utility: Have you developed any thoughts around the ratio of expenditures on hardening versus resiliency?
Massoud Amin: I have done it on a case-by-case, and it boils down, again, to what risk we are exposed to and what we are trying to protect. That ratio is very important, actually, because you could end up protecting an asset that's worth less than what you're spending to harden it. The best ratio depends on specifics and it's difficult to generalize.
Intelligent Utility: Would it be fair to summarize Hurricane Sandy's impact on the role of smart grid by saying it's too soon to judge? Based on your and other people's remarks, we have many years and a lot of dollars to spend to realize a self-healing grid.
Massoud Amin: It is fair. I would say the benefits begin at every phase of implementation, and we haven't done enough as a nation or as regions to move towards a smarter, stronger and more resilient grid. The current grid is an amazing achievement of engineering - for the last century. We need to do a lot more - an order of magnitude more - to bring it up to speed with the demands and needs of the 21st century. It powers our economy. It will power our continued progress. It underpins everything we do in America.
Intelligent Utility: Looking back, it strikes me that the grid's first century was characterized by spreading service to the widest possible customer base at the lowest cost. Having done that, we have a new set of challenges ahead: hardening and resilience, whether that's to withstand extreme weather or cyber assaults. Your thoughts?
Massoud Amin: I would add a broader, economic angle. The 20th century grid exceeded our expectations for lighting and refrigeration, rural electrification, turning flood zones into secure, electrified homes and businesses. Look, for example, at TVA or Bonneville Power Authority.
Today, however, we are talking about needing a high-quality infrastructure to provide electrons for our digital economy. Digital customers have very different needs. Our manmade and our natural risks have changed. If you came to America in the 1950s, you were impressed with the quality of infrastructure. But now, interestingly, as Americans, we have not advanced our infrastructure sufficiently.
The World Economic Forum's recent competitiveness report ranked our U.S. infrastructure below 20th in most of the nine categories and below 30th for the quality of air transport and electricity. We wouldn't have settled for something like that in the 1950s or 1960s.
We need to do a lot more to bring our infrastructure into an age where global IT superhighways are not just a dream. And that IT infrastructure depends on reliable electricity. Advanced manufacturing depends on electricity. All of the functions that we take for granted depend on reliable, affordable and low-carbon footprints. As a nation we don't really realize that we have fallen behind the rest of the world when it comes to infrastructure upgrades. So this is a great opportunity, one that can be an engine for our economic growth.
We need the creation of a public/private partnership, with clear milestones, to focus on much-needed repairs today and to bridge to a modernized, advanced, smarter, more secure, more sustainable infrastructure for the next 10, 20, 30 years. It can be done and it must be done.
Intelligent Utility: Where do we go from here?
Massoud Amin: Much of the early work has been done. But the order of magnitude needed is $25 billion to $30 billion in investments annually over 20 years. Benefits begin at the end of every phase, every project completion. So it's not like we have to do it and wait 20 years for its value. The return on investment begins immediately, of course, with job creation. But making those local systems and the backbone for the nation's power grid stronger and smarter, resulting in reduced outages and more efficiencies, will pay huge dividends in the long run.