Smart Grids, Margins and Risks

Issue 2 and Volume 3.

By Dr. A. David Rossin

I teach a course called “Energy Politics” at the Academy for Lifelong Learning (ALL) in Sarasota, Fla. The ALL “students” are grown-ups who have had careers and enjoy new slants and thoughtful discussion. Most are more familiar with politics than energy. They are really interested in the interactions that brought us to where we are and eager to explore what is ahead. That’s why I started digging into the Smart Grid.

As readers of this magazine realize, “Smart Grid” means different things to different people. For example, it may mean that we will charge a lot more hybrid vehicles.

Studies by the North American Electric Reliability Corp. (NERC), the Electric Power Research Institute (EPRI) and the Department of Energy (DOE) project that our generating capacity will be sufficient as electric vehicle fleets begin to grow. That’s when I began thinking again about margin.

Half a century ago utilities planned future capacity additions based on projected peak load growth. One rule of thumb that seemed acceptable to state rate commissions was that each system’s total generating capacity should always be at least 115 percent of its projected peak load.

Simplistic? Sure! Understandable? Yes! Based on studies? Certainly! There were many filed in rate cases and published in journals and periodicals. Experience showed that the rule served pretty well (except for the exceptions; a few weird combinations of events really did happen!). There was some margin in actual operations over and above long-term supply contracts: utilities could buy emergency power and rolling blackouts could be enforced to prevent disasters.

Then computers arrived. Software was developed. The tools got sharper. Probabalistic risk assessment replaced simple rules of thumb. Margin could be squeezed a bit without violating actual reliability standards. Maybe a new plant could be delayed or even cancelled. State regulators welcomed the possibility of putting investments further off into the future. But there could be risks in doing this.

Margin popped up as a factor in nuclear plant licensing and safety reviews. A modification or even an uprate could be supported by new studies that showed safety standards were still being met even though some margin that had been pointed out in the design at licensing time would be reduced.

In some cases the Nuclear Regulatory Commission (NRC) did not approve a modification. Their argument was that it reduced margin. Wait! The standards would still be met! For those of us who lived in “licensing space” this could very well stifle improvements and introduce new avenues of intervenor challenges. Committees and plant managers debated the margin issue with NRC staff and settled the issue reasonably 20 years ago. (But licensing space has funny curves and parties must remain vigilant.)

In California in the 1990s, activists and academics projected exciting increases in energy conservation and alternative energy supply that gave the public utility commission, an energy commission and powerful legislative factions all they needed to delay or scuttle one utility proposal after another. Political forces killed 900 MWe at Rancho Seco nuclear station and 600 more at the San Onofre 1 nuclear generating station.

Then Silicon Valley grew again! A 600 MWe combined cycle gas plant was proposed near San Jose to support new server farms. Years of delay followed. Margin got eaten up. By the time deregulation arrived, the utilities were weak, their public image was under fire, their generation backbone was behind schedule and those glowing projections simply had not come true. Deregulation did not solve the problems; it made them worse. California is still more than $20 billion in the hole from the 1999-2001 electricity fiasco.

Every utility is different. Some systems will have more margin than others, we just won’t know how much and where. This is my concern about EVs and utility grid capacities.

The Smart Grid will allow system engineers to design better. Less margin will be required. The Smart Grid is supposed to assist companies, offices and homes conserve energy and adjust peak loads, improve power flows and make timely adjustments to avoid major outages.

Regions counting on projected grid savings and mandated solar and wind projects will be watching their margins. Failure to build capacity and lines when they will be needed means that risks may become greater. With less margin, we’re cutting things closer to the line.

Author: Dr. A. David Rossin was president of the American Nuclear Society 1992-93. He was U. S. DOE Assistant Secretary for Nuclear Energy from 1986-1987 and director of the Nuclear Safety Analysis Center at EPRI from 1981 to 1986. In 1982, Dr. Rossin was voted Electric Industry Man of the Year “for his efforts to improve public understanding of nuclear, energy and environmental issues.” Dr. Rossin is writing a book on the history of the people and events that led up to the U. S. policy decision in 1977 to abandon reprocessing spent nuclear reactor fuel.


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