What
Superstorm Sandy Means to the Electricity Industry, Outdated
Electricity Grid and Job Gap
7
November, 2012
Some
concerns around the impact of Sandy center on the impact of the
storms on the electricity grid. And rightly so; the impact of a storm
like Sandy will take a lot of money and time to recover from. About
8.2 million customers were without electricity and that will
negatively impact the recovery. Though it should not take a disaster
like Sandy, this actually provides an opportune time to improve the
grid. Unfortunately, the repair/upgrade of the damaged electricity
infrastructure will require skilled employees that we currently do
not have as a country.
The
State of the Grid
The
U.S. electricity grid is in need of an upgrade. The basic
infrastructure of the grid has not changed much for the last 50-60
years especially in light of the advances in technology that have
been applied to other critical industries like healthcare and
defense. The grid map shown below (obtained from NPR) shows the three
major grids in the US: the western interconnection, the eastern
interconnection and the Electric Reliability Council of Texas
(fascinating that Texas has its own grid. As the saying goes
'Everything is bigger in Texas'). The most that has been done to the
grid in that time is maintenance.
To
recover from Sandy, the eastern/northeastern utilities flew in and
continue to fly experts in from around the country (with some linemen
coming from Illinois and even trucks coming in from PG&E in
California) to assist with the repairs to the electricity grid. Once
the equipment is fixed some post repair maintenance will be required.
Unfortunately the shipped in experts will have to go back to their
respective states/utilities to serve their primary customer base. I
suggest this time be used to assess what repairs need to be made and
take it as an opportunity to move a considerable part of the grid
from the antiquated technology being utilized, and install some
modern equipment that gets us a bit closer to the desired goal of a
'smart grid.'
The
Skill Shortfall
Unfortunately
this 'opportunity' that the storm has provided to upgrade the grid
will be missed. It will be missed because there is a vast shortage of
skilled utility industry workers that can modernize the grid. If
there were enough experts with the required skill to maintain the
current grid the eastern and northeastern utilities would not have
shipped experts in. An interesting Center for Energy Workforce
Development survey carried out in 2012 shares some glaring points
The
average age of the utility industry employee is 50.
Over
the next decade 62 percent of the industry has the potential to
retire or leave the workforce.
Between
2015-2020 33,700 replacement employees will be required. This is just
to maintain, not update, the level of the current workforce.
The
skills shortage will particularly be evident in the areas of power
plant operators, transmission and distribution technicians and
engineers. There is a good problem here, jobs, but no immediate or
long-term solution if the skills training required is not
accelerated. All these point to a need to train a new crop of experts
to both maintain and update the grid. But where will the money come
from? This question underlies why it isn't happening yet and might
fail to happen.
Economics
of the Smart Grid
According
to research by faculty at the Kellogg School of Business Northwestern
University, the electricity grid of the future will require updates
to the production, transmission and consumption infrastructure. Also
included in the costs of upgrading the grid is the cost of educating
the workforce required for upgrade implementation. To determine who
will bear the cost we should look at who will benefit. From an
upgraded smart grid, consumers will expect better service from their
utility, transmission providers will get information on outage
likelihood, and utilities will be able to shift the demand of
electricity from the times when it is in higher demand (peak time) to
when demand is low (off-peak). So all parties benefit and all parties
should bear the cost. And this is where the real issue lies; no one
wants to bear the cost and, unfortunately, government (as we have it
now), which would normally provide this upgrade as a public good
cannot afford to bankroll this huge endeavor.
The
solution to this impasse would be willingness on all parties involved
(utilities, suppliers, consumers and the government) to bear some
part of the burden in an oft forgotten agreement structure called
'shared responsibility'; utilities get subsidized by government for
educational programs, suppliers partner with utilities to offset
these costs, consumers accept a slight increase to their bills and
the grid gets updated. This solution sounds simplistic but if the
goal is kept this simple and clear it becomes easier to question any
misalignment.
Until
this happens we all wait for the grid upgrade. And the thousands of
jobs go unfilled.
P.S.
All the very best wishes to our friends on the East Coast/impacted by
Sandy. Know our thoughts and prayers are with you.
Seyi
Fabode is CEO of Power2Switch.com a company that helps consumers make
responsible decisions about their energy. The company runs several
websites including www.Power2Switch.com which helps consumers
comparison shop alternative retail suppliers to save money or buy
green energy.
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