For more than 100 years, electric companies in the U.S. have maintained the same basic business model, carefully fine-tuned to sometimes conflicting local, state, and federal regulation. But over the last decade, changes in both supply and demand for electricity has proven the old ways won’t work forever.
If America’s grid doesn’t adapt, it might break.
Aiming to chart a more sustainable path for governing our nation’s grid, representatives spanning physics, law, energy regulation, economics, and even evolutionary dynamics is meeting April 9–11 at SFI for a working group on “Governance Institutions for a Polycentric and Technologically Complex Electric Power Grid.”
“When you flip a switch and your light turns on, you may not realize the many complex layers involved in delivering electric power: physical, legal and regulatory, business model, markets, human behavior. This isn’t squeezing Peeps out of a tube in a factory — this is producing electric current,” says SFI External Professor Lynne Kiesling, a Northwestern University economist who co-organized the event.
The physical layer behind our grid is a complex network of power plants, high-voltage transmission, and low-voltage distribution. Under certain conditions, small problems on the grid can quickly cascade into huge problems and extensive blackouts.
Human elements complicate the process just as much, because no single person, regulator, or agency is in charge of the grid as a whole. Consider the social norms of handling a shared good between millions of people, or conflicting regulation between states and the federal government. Today consumers have increasing sway over markets, now that we can install rooftop solar panels or run our washing machines at the cheapest time of day.
But the biggest stressor to America’s electric grid is a sudden spike in demand.
“The utility industry is facing the first major increase in demand for its product that most professionals have seen in their lifetimes,” says SFI External Professor Seth Blumsack, another co-organizer and a Pennsylvania State University energy-policy expert.
“Data centers, electrification of transport and building heating and cooling, even giant agricultural greenhouses: there is massive clamoring for electricity. All the while, concerns are only growing about our grid’s reliability, climate and environmental impacts, and affordability,” he explains.
Many areas face looming supply shortages. The old solutions — relying on coal and gas plants to make more current — can be inefficient, expensive, and environmentally dangerous. Our physical power systems badly need innovation to sustainably handle the ever-increasing demand. New solutions might incorporate more renewable energy sources, tech-managed “smart grids,” modernized energy-storage solutions, and beyond.
“You need a governance system that will support, not thwart, the technological innovation that will ensure the grid lasts another century,” Blumsack says.
Working group participants will discuss creative adaptations for supplying, distributing, and transmitting electricity; building power lines; and addressing yet another layer of complexity, the mismatch between theory and practice. Organizers hope to kickstart a series of meetings on how to wield theory to solve this pressing real-world problem.