The value of the grid
It’s not just that we take electricity for granted.
It’s that on-demand electric service is so reliable and so safe that it seems automatic.
Nothing could be further from the truth.
Whether turning on the television to watch a football game, flipping a light switch or a coffeemaker to start the morning, or reporting to work in any building or factory, we are conditioned to think of electricity like we think of the air we breathe. It’s just there.
But the reality is far more complex. For every electron coursing into your home or business, for every microwave meal, video game console or load of laundry, the electrical grid is constantly at work. This complex network of power plants, substations, poles, wires, transformers, switches, monitors and people ensures the reliable and safe delivery of energy to your home or business.
As the American minister Norman Vincent Peale sermonized 70 years ago, about the same time as the electrical grid was being built, “nothing of great value in this life comes easily.”
Much of the recent national energy conversation is almost exclusively about how electricity is generated and the push to move away from fossil fuels because of climate change concerns.
Indeed, Kentucky’s electric cooperatives have significantly reduced carbon emissions, down nearly 40% since 2010.
Missing from this discussion, however, is an appreciation of the core value of the electrical grid, that it works all the time thanks to a careful balance of reliable energy sources.
To understand the value of the grid, consider these five R’s:
Electric service is instantaneous. Any electricity you are using right now is being generated at this same exact moment. As a result, the electric system has to be built large enough to meet the biggest demand at any one time.
In Kentucky, each of the 24 local electric distribution cooperatives maintains the poles, wires and transformers that deliver electricity to you. Each local co-op is tied into one of three power providers, East Kentucky Power Cooperative, Big Rivers Electric Corporation or the Tennessee Valley Authority. These power providers not only generate power and maintain transmission systems, but are also part of larger networks that provide redundancy and flexibility to help keep rates as low as possible while ensuring power is available every moment of every day.
“Unlike water or gas, electricity cannot be stored in large quantities,” according to the North American Electric Reliability Corporation (NERC).
Batteries may become a future resource, but the current generation of utility-scale batteries typically discharge within four hours. Regardless, today the U.S. has just 1,650 megawatts of total installed utility-scale battery capacity, enough to back up about 0.5% of installed renewables in the U.S.
“Electricity must be generated the instant it is used,” NERC continues, “which requires supply to be kept in constant balance with demand.”
To maintain that balancing act, power providers must be responsive, forecasting the next day’s energy use and carefully managing energy generation every minute. If not for that painstaking process, demand could outpace supply, leading to damaging dips in voltage, brownouts or blackouts. Everybody wants to avoid that.
In most areas of the country, the electrical grid is built to be resilient, able to adapt to changing conditions and rapidly recover from potentially disruptive events such as severe weather. But two recent resiliency failures provide a cautionary tale about depriving the grid of sufficient energy sources.
California relies more on wind and solar than any other state. During last summer’s heat wave, when the solar panels and wind turbines that make up about 30% of California’s energy mix stopped generating electricity, the available supply of power couldn’t keep up with demand. Grid operators had to shut off power to millions of people.
“In other words, California’s electricity grid was not reliable with 30% renewables,” Big Rivers Electric President and CEO Bob Berry told a Kentucky legislative panel in October.
In a letter to President Joe Biden, East Kentucky Power Cooperative President and CEO Tony Campbell cautioned against energy policies that push a quick transition to intermittent energy sources.
“Renewable resources, particularly solar and wind, do not provide the same 24/7 assurance of reliable power as traditional baseload assets,” Campbell wrote, “…a fact that is especially pertinent during emergencies and extreme weather events.”
In Texas, problems with natural gas delivery contributed to a near complete collapse of that state’s stand-alone electrical grid last February, shutting off power to millions of people amid subfreezing temperatures.
Though the diverse energy mix of Kentucky’s power providers includes renewables and natural gas, their resiliency success story is linked directly to a dependable standby: coal. Kentucky relies on coal for almost 70% of its electricity. Last year, Kentucky’s electricity rates were 20% lower than the national average.
“Natural gas prices spike during extreme weather but having a coal supply on hand is invaluable. Coal is already purchased at a known cost,” says Berry. “With coal, we can ride out the storms. But if you rely on natural gas, the infrastructure is not in place to simultaneously supply residential spikes and utility spikes during extreme weather events.”
The value of the grid is that it is always ready.
“Whether it’s 7 a.m. on a cold and dark January morning or 100 degrees on a steamy July afternoon, thanks to the electric grid and the people managing it, co-ops are ready to meet the energy demand,” says Chris Perry, president and CEO of Kentucky Electric Cooperatives.
For the grid to have the necessary resources and innovations to ensure readiness, someone has to pay for it. But in many cases today, the rate structure used to calculate electric bills is woefully outdated. When rates are based almost entirely on the amount of energy used, they do not account for the value of access to a 24/7 grid. This rate structure also does not factor in energy efficiency long promoted by co-ops or renewable energy developments.
“The rate structures need to be modernized so the grid is adequately supported,” Perry says. “Electricity today is an on-demand service and not a commodity.”
“If you buy a car, you don’t just make payments on it when you’re driving it,” adds Berry. “You have to make payments on it every month whether you drive it or not, whether you drive it 1,000 miles or 100 miles.”
The same goes for the electrical grid, which operates constantly so it’s ready when you need it.
“You can’t just pay for it only when you use it,” Berry continues.
Because they belong to the people they serve and are led by people who live in those same local communities, electric cooperatives have an inherent responsibility and direct accountability to their members.
Understandably, some co-op members have questions about how their co-op balances reliability with the environmental impact of the electrical grid.
In the last 25 years, emissions of sulfur dioxide and nitrogen oxides have been reduced more than 85% at Kentucky power plants. And since 2010, carbon emissions from Kentucky power plants that serve electric cooperatives are down about 43%, without harming reliability. But the White House goal to achieve carbon-free electricity by 2035 is distressing to those who rely on the grid.
“Most factories are designed to run 24 hours a day and they need a stable, reliable power supply to keep equipment at its peak operational efficiency,” explains Carl Kurz, executive director of Kentucky Industrial Utility Customers. “A blip in the power causes an entire facility to shut down. That requires it to be restarted and results in a loss of product, damage and equipment failure.”
Kurz warns that by removing coal, natural gas and other storable fuel sources, “we are looking at a less reliable grid structure.”
“We’re not against renewable energy,” Berry adds. “But we have to be responsible and add it in a manner that protects the grid and protects the service people enjoy today.”
If the government forces the premature closure of fossil fuel plants, co-op members would be responsible for the cost of both the new renewable generation and the stranded asset of their current coal and gas plants.
“We hear a lot of talk about the ESG movement,” Berry says. “We not only have to focus on the environment and governance, we also have a social obligation to provide people affordable electricity. To do that, we have to have an all-of-the-above approach to energy generation.”