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Toward A More Secure, Strong and Smart Electric Power Grid

Department of Energy data show that power outages have become more frequent and severe. What's more, as the grid becomes more interconnected and complicated, it also becomes more vulnerable to attack. Addressing those problems will be costly—but the payoff in terms of efficiency and energy savings will be huge.

Perhaps, to correct the poet T.S. Eliot, August, not April, is the cruelest month. This last August marked the seventh anniversary of the 2003 blackout in the North American Northeast and Midwest, which caused more than $6 billion in losses; the fifth anniversary of Hurricane Katrina, with more than 1,800 deaths and $150 billion in economic losses; and the third anniversary of the collapse of Minneapolis’s I-35W bridge, which killed 13 people and disrupted traffic and the local economy for a year.

The silver lining in those tragic events is that the general public is now much more acutely aware of how much we need to accelerate programs of replacement, rehabilitation, and new investment in infrastructure.

In the electricity sector, outages and power quality disturbances cost the economy, on average, more than $80 billion annually and sometimes as much as $188 billion in a single year. Due to heavier use of transmission and distribution systems and more frequent congestion, T&D losses almost doubled between 1970 and 2001, rising from about 5 percent to 9.5 percent. That 4.5 percentage point increase translates to 184 million MWh, or electrical power for about 13 percent of U.S. households. Since 1995, the amortization and depreciation rate on old transmission investments has exceeded new construction expenditures.

With utility construction expenditures lagging behind asset depreciation, a mode of grid operation has ensued that is analogous to harvesting crops more rapidly than replacement seeds are planted. As a result, it has been apparent for a decade that the grid is increasingly stressed and that the carrying capacity or safety margin to support anticipated demand is seriously in question.

Reliability According to data assembled by the U.S. Energy Information Administration (EIA) for most of the past decade, there were 156 outages of 100 megawatts or more during 2000-2004; such outages increased to 264 during 2005-2009. The number of U.S. power outages affecting 50,000 or more consumers increased from 149 during 2000-2004 to 349 during 2005-2009, according to EIA.

Adjusting for a two percent per year increase in load to 2001 levels, these outages reflect a trend. First, there were 189 outages of 100 megawatts or more during 2001-2005; such outages slightly increased to 190 during 2006-May 2010. Second, assuming the same two percent annual demand growth, the number of U.S. power outages affecting 50,000 or more consumers increased from 186 during 2001-2005 to 297 during 2006-May 2010.

Of course some regions do better than others. The country’s most reliable utilities tend to be located in the Midwest: Minnesota, Iowa, the Dakotas, Missouri, Nebraska, and Kansas lose power on average 92 minutes per year, while customers in New York, Pennsylvania, and New Jersey suffer 214 minutes without electricity. But compare that to Japan, which averages only four minutes of total interrupted electricity service each year.

Security In 1990, the U.S. Office of Technology Assessment issued a detailed report, Physical Vulnerability of the Electric System to Natural Disasters and Sabotage. It concluded that terrorists could "destroy critical [power system] components, incapacitating large segments of a transmission network for months. Some of these components are vulnerable to saboteurs with explosives or just high-powered rifles."

In the 20 years since the OTA report, the situation has become even more complex. It is now recognized that accounting for and protecting all critical assets of the electric-power system—which include thousands of transformers, line reactors, series capacitors, and transmission lines dispersed across the continent—is, and probably always was, impractical. Meanwhile, with the addition of cyber, communications, and control layers, new families of security threats have surfaced.

The U.S. Nuclear Regulatory Commission confirmed that in January 2003, the Microsoft SQL Server worm known as Slammer infected a private computer network at the Davis-Besse nuclear power plant in Oak Harbor, Ohio, disabling a safety monitoring system for nearly five hours. (Fortunately the plant was offline at the time; seven months later, however, its offline status was a factor in the big Midwest-Northeast blackout, the bi-national Outage Task Force Report found.) In January 2008, the CIA reported that the agency knew of four incidents overseas where hackers were able to disrupt—or threaten to disrupt—the power supply for four foreign cities.

The specter of future sophisticated terrorist attacks raises a profound dilemma for the electric power industry, which must make the grid more secure, while being careful not to compromise productivity. Resolving this dilemma will require both short-term and long-term technology development and will be addressed in more detail in an upcoming, second installment of this article.

Costs and benefits According to a January 2010 Pacific Northwest National Laboratory report the smart grid could increase efficiency and reduce emissions by 12 to 18 percent per year. The smart grid is expected to realize more than a four percent reduction in energy use by 2030, which translates into $20.4 billion in savings, according to Energy Secretary Steven Chu. More widespread introduction of demand-response programs and other smart grid applications will lower peak demand growth, reducing the need for additional generation assets.

Integration of the smart grid also will result in net reduction in the cost of outages by about $49 billion per year. Add to that increased cyber and IT security, as well as enhanced overall energy security, if a layered defense system architecture is employed to make grids more immune to attack.

But those benefits do not come cost-free. Estimates of what we need to spend to fully build out a national smart grid in the next 20 years range from $165 billion (EPRI) for the smart grid portion to $1.5 to $2 trillion (Batelle Group) for a total infrastructure investment. My own work since 1998 shows that the smart grid will cost $10 billion to $13 billion per year for 10 years or longer, or about $150 billion to $170 billion over a 20-year period.

Those estimates for the smart grid do not include the costs of building out the present-day high-voltage transmission system, which needs to be expanded and strengthened, partly to accommodate higher proportions of intermittent energy, notably wind. The total cost of an expanded transmission system is about $82 billion, according to the 2009 National Electric Transmission Congestion Study, which assessed transmission congestion and constraints within the Eastern and Western Interconnections and identifies areas that are experiencing congestion-related problems.

From an overall system perspective, to meet goals of increased efficiency, sustainability, reliability, security and resilience, the power system also will require—besides more robust bulk transmission capacity—local microgrids that can be as self-sufficient as possible and that can island rapidly during emergencies. It will need an interconnected, smarter and stronger power grid backbone that can efficiently integrate intermittent sources to provide power for the end-to-end electrification of transportation.

More than ever, all those investments will make electric power central to modern-day life. Electricity’s unique capability to be produced from a wide variety of local energy sources, along with its precision, cleanliness and efficiency, make the smart grid the ideal energy carrier for economic and social development. Electricity is the lynchpin and enabling infrastructure for all knowledge- and innovation-based economies. For our $14 trillion economy, the smart grid promises reliable, disturbance-free access to electricity.


  • Massoud AminMassoud Amin, a senior member of IEEE, chairman of the IEEE Smart Grid, a fellow of ASME, Chairman of the Texas RE, an independent Director of the MRO, holds the Honeywell/H.W. Sweatt Chair in Technological Leadership at the University of Minnesota.

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About the Smart Grid Newsletter

A monthly publication, the IEEE Smart Grid Newsletter features practical and timely technical information and forward-looking commentary on smart grid developments and deployments around the world. Designed to foster greater understanding and collaboration between diverse stakeholders, the newsletter brings together experts, thought-leaders, and decision-makers to exchange information and discuss issues affecting the evolution of the smart grid.


Massoud AminMassoud Amin is director of the Technological Leadership Institute, professor of electrical and computer engineering, and ... Read more


Erich GuntherErich W. Gunther is Chairman and CTO, EnerNex, Chairman of the IEEE Power and Energy Society's Intelligent Grid Coordinating ... Read more


Tariq SamadTariq Samad is a Corporate Fellow at Honeywell Automation and Control Solutions and a member of the IEEE Smart Grid Steering Committee ... Read more


Lee StognerLee Stogner is the Managing Principal of the Vincula Group, a consultancy business in energy, systems integration and project management. He is ... Read more