It all started with a bookbinder with no formal education, named Michael Faraday, who “discovered” electricity. Amazing story. Essentially he held a wire over a magnet and saw that it (the wire) moved (electromagnetic induction) which is the basis for the generation of electricity which now allows us to plug just about anything into a wall socket to make our lives better. What you are plugging into is the electrical grid….the simplest user interface in the world attached to the largest machine in the world (all those interconnected rotating electromagnetic induction machines)…..Faraday would be so proud. (1)
The grid started with Edison in New York (it was not called the grid at that time). Light bulbs (Humphry Davy invented them 70 years before Edison patented them) were just beginning. At first it was a pretty local thing. Edison’s power plant generated electricity and transmission lines carried it nearby to where is was needed. As people used more and more electricity the grid became this giant haphazardly constructed continental spaghetti web of thousands of power plants with millions of miles of transmission lines delivering electricity to where it was needed. Which was everywhere. Oh. And also there are now thousands of regulated (because a capitalism by itself won’t run a line to some isolated rural farmer unless made/rewarded to) utility companies in charge of this. This “grid” is a complex adaptive system (2) that you CANNOT think about with nice linear math making nice predictions about what will nicely happen if you poke it with a stick (a ground fault). (3)
The reason that the grid is the most important (in addition to being the biggest) machine in the world is that if it goes down people die. Think ventilators in hospitals that don’t work if backup generation is used up. AND. In the darkness it does not take long for the criminal psychopathic animals of this world, with nothing to lose, to show up at your door. Biblical would be a mild adjective.
You can see from the history that that the grid started out local then became continental but it is now becoming a bit more local again to a certain extent with each local grid producer trying to be its own puppet master as far as the environment (so called) issues go. This has led to more distributed decisions so more weird unpredictable things happen (emergent properties) that you cannot predict….like blackouts that hopscotch across the country. (4) It is almost like a reverse Enron. (5)
The grid BY LAW is tuned to the lowest common denominator which basically means that when everyone gets home after work to cook and turn on the airconditioning there has to be BY LAW enough electricity. But. This means that if you average over an average day the grid is only really used at 60%. But if everyone plugs an EV in at the same time it CRASHES. (6)
The electrical market is different than any other commodity market where, let’s say, somebody or something, produces a bushel of wheat, for instance, and it is delivered from point a to point b through a complicated system of storage (grain silos) and transmission (trucks, trains, ships). When somebody or something produces some electricity, it is delivered to the grid like a giant wave to EVERYWHERE in the grid. It is almost like quantum mechanics.
There is not as much storage in the electrical market compared to some other solid commodities like wheat or oil or whatever. Storage is good. It provides resiliency. Remember Joseph in the first book (genesis) of the great book (yeah, whatever) who saved Egypt from famine by getting the pharaoh to store wheat after seven years of good harvest so his people could eat for the seven years of bad harvests? You can store electricity (a voltage difference that flows as an electromagnetic wave) in chemicals (hydrogen) or electrons (elon’s batteries) or by pumping water up a hill (by far the most common). There is a big push from some big money and some smart people to increase storage with hydrogen in salt mines in Utah, or big batteries made of lithium or even calcium, or fixing the dams in front of reservoirs of water so they don’t collapse and don’t kill fish and eels. (7)
Improvement?
a)There are lots of things that could/should be done to improve the generation electricity (more efficient fuel burning power plants…yep…nuclear), the transmission of electricity (clipping sensors on lines to adjust power to temperature…real simple but not rewarded vs deploying tons of capital like utilities are paid to do), and the storage of electricity (see previous paragraph). This stuff will get done. Eventually.
b)Utilities are starting programs to give you a break on you bills if you don’t really care when exactly things get charged up. Like an EV needs maybe three hours of charging but it is plugged in for thirteen (ie-when you get home from work until the morning). All you care about is if it is charged in the morning so Duke Energy has a deal for its customers if you sign up for that (50% off).
c)There is a lot of room for VPP’s and DER’s. (8)
d)Electricity for the most part is pretty cheap so we waste it like crazy. Just like Tesher did. Most living spaces have too many little “on” lights glowing in the middle of the night. A big spike in prices (that the individual rational economic actor pays) would change this in a nanosecond.
Ever heard of The Carrington Event? Again. Biblical. Will make Noah’s Ark look like a smooth lake paddle in a canoe. (9)
Notes:
1)There is a(n) (apocryphal) story about Faraday being asked by British prime minister Gladstone what his discovery could possibly be used for and the reply was something along the lines of someday the government will be able to tax it.
2)Complicated is a Boeing passenger jet. Hundreds of thousands of parts that can be dismantled and put back together again. Complex means that something (the grid) is so complicated (big and interconnected) that it seems capable of collecting information and adapting or not adapting to it. This mean cause and effect are not linear and unambiguous, but non-linear and ambiguous in complex systems.
3)There are three big areas in North America. Click on the link to see 10 graphics.
Note that the Texas Ercot system makes it easier for the secessionists there to separate from the USA. Don’t laugh. There is a long history of Americans clamoring for the Un-United States of America.
4)https://www.powermag.com/miso-warns-immediate-and-serious-challenges-are-threatening-reliability/
5)Enron was caused by: a)some top down rule changes imposed by then Governor Gray of California, and b) some total shysters at Enron making huge bank on the gaming of those rules. The election of Arnold Schwarzenegger was due to this disaster. Some rule changes and somebody games it….. Still happens today in the electrical business for sure. Google Matt Levine’s recent post called “Ketchup Caddy”.
6)
7)Dams kill a big percentage of fish that go through their turbines. Eels too. Apparently eels are important for the lifecycle of mollusks. The water gets really shitty really quickly without mollusks. So tell that to some overly proud hydro power Quebecer. Or BCer. There is always a tradeoff. But the hydro power worshippers don’t believe it. Or say they don’t believe it. I guess everyone has something to sell.
8)https://www.brattle.com/insights-events/publications/brattle-qa-energy-leaders-innovators-us-department-of-energys-jigar-shah-on-the-future-of-virtual-power-plants/
9) https://assets.lloyds.com/assets/pdf-solar-storm-risk-to-the-north-american-electric-grid/1/pdf-Solar-Storm-Risk-to-the-North-American-Electric-Grid.pdf