Work on America’s electrical grid has slowed to a crawl, even as the power outages caused by severe weather are on the upswing. That’s the takeaway from a new report out of the President’s Council of Economic Advisers and the Department of Energy. It found that economic damage from weather-related power outages now averages between $18 and $33 billion per year — and went as high as $75 billion in 2008 and $52 billion in 2012 thanks to Hurricanes Ike and Sandy, respectively.
The backstory to this is a decades-long slowdown in construction and upkeep on the nation’s electrical grid. The Obama Administration report compiled data showing that transmission line construction began as early as the 1880s, and peaked at nearly 10,000 miles built per year in the late 1960s. But it’s been a long drop since then to about 1,000 miles per year in the mid-2000s, leaving 70 percent of the nation’s transmission lines and power transformers over 25 years old.
Old equipment and infrastructure leaves the grid more vulnerable to weather: damage and the resulting mechanical failures are harder to spot without automated sensors, older transmission lines waste more energy during emergencies, and most of the grid remains above ground and thus unprotected. The good news is that construction is projected to modestly improve from 2010 to 2015, thanks largely to $4.5 billion in grid investments allocated by the 2009 Stimulus. That means upgraded grid sensors, more digital smart grid technology, and investment in more storage.
The bad news is that this new upkeep is chasing a rising target. Power outages caused by severe weather have spiked since the mid-2000s, and now account for 58 percent of all outages observed since 2002 — and 87 percent of all outages affecting 50,000 or more customers.
According to data from the National Oceanic and Atmospheric Administration cited in the report, seven of the ten costliest storms in U.S. history hit between 2004 and 2012, and the incidence of storms whose total cost tops $1 billion is rising at a brisk clip. As the report also notes, these upward trends in damaging weather are going to continue thanks to climate change. Increasingly powerful storms, intensifying heat waves, and heavier patterns of precipitation all either directly threaten the physical integrity of the grid, or burden it with ever increasing load demand.
Finally, the report drew on a wide number of surveys to calculate the damage to the economy from weather-related outages. Such damage can range from lost output and wages, to spoiled inventory, to the extra cost of restarting operations after the outage has passed. The numbers varied considerably year-to-year, and covered a range of possibilities in any individual year. But it all averaged out to between $18 and $33 billion per year.
In short, the nation’s power grid is already more vulnerable than it should be to extreme weather, and that weather is only getting worse.
Getting out ahead of the problem will require a much bigger overhaul of the national system than what’s currently being contemplated. The grid needs to be better able to withstand extreme weather, and better able to adjustment and repair when damage does occur. The report lists multiple fronts for improvement, including more exercises by utilities and government agencies to prepare for extreme weather, moving power lines and substations either underground or higher off the ground depending on the area (though that comes with increased maintenance costs down the line), updating infrastructure with newer and stronger materials, investing in more storage and flow capacity to add backup power options and make the grid more flexible, and introducing more smart grid technology — automated sensors, smart meters, microgrids, the works.
The White House itself didn’t go into detail about specific numbers in the paper, but the Associated Press talked to Massoud Amin, an electrical engineering professor at the University of Minnesota, Minneapolis who is a big advocate for updating the grid. He estimated that updating the country to a modern and efficient electrical grid would cost $21 billion per year for the next two decades, and ultimately save us something between $79 and $94 billion per year.