Engineering Group Sees Increase in Power Outages, Costs

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Power outages — a key driver for microgrids — are becoming more frequent and costly, according to a report by the American Society of Civil Engineers (ASCE).

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Blue Lake Rancheria was among the California microgrids that served the grid during recent rolling blackouts. Credit: Siemens

In this decade, there is a $135 billion “investment gap” for generation, $24.4 billion for transmission and $48.8 billion for the distribution system, the ASCE said in its report, Electric Infrastructure Investment Gaps in a Rapidly Changing Environment.

The investment gap — the difference between investment trends and expected needs — contributes to a greater number of power interruptions caused by equipment failures, capacity blackout or brownouts, power quality irregularities and intermittent voltage surges, which hurts the economy, according to the report, released September 1.

“Rising incidences of voltage surges, and blackouts, and brownouts that disrupt production add costs to businesses that will make US manufactured products less competitive in international markets,” the trade group said.

Power outages increase

There were 638 transmission-related outages over a five year period starting in 2014 that were voluntarily reported by utilities, according to the report.

Half the outages were caused by severe weather, about a third were triggered by transmission disruptions or failures and 18% were because of faulty systems operations.

However, ASCE found that last year 46% of the outages were attributed to transmission disruptions and interruptions.

“This was perhaps at least partly the result of the unusually heavy fire season in the Western US,” the ASCE said. “Increasing numbers and intensities of fires are one effect of climate change in drier, hotter regions, a trend that’s expected to accelerate.”

How California’s Microgrids Came through During Rolling Blackouts

In 2017, the national average duration of outage events was 7.8 hours, including major storms, according to the report. When excluding major storms, the outages were half as long.

The Southeast and Western reliability regions had the most outages — 151 and 130, respectively — while the Midwest, Puerto Rico and the Southwest Power Pool reliability regions reported no more than 20 events, according to the report.

Electricity interruption costs rise

The costs of power outages is climbing, according to the ASCE. Costs include damage to electronics from voltage spikes; spoiled food; lost productivity when production processes are idled; and added costs related to spending on backup generators, power quality monitoring and conditioning equipment.

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The trade group estimated that in 2029 the residential sector will face $2 billion in outage-related costs while the commercial sector will be hit with $53 billion in expenses and the large commercial and industrial segment will pay $49 billion in outage expenses.

Homeowners paid on average about $6.68 for every power interruption in 2018, about double compared to what they paid in 2011, according to the report.

With businesses and industry more reliant on data centers, ASCE found that the cost for outages at the facilities is growing.

The average cost of a data center outage was $8,851 per minute in 2016, up from $5,617 in 2010 while the average length of a disruption was 95 minutes, down from 97 minutes in 2010, according to the report.

The average cost of a data center outage to the customers who use them jumped to $740,000 in 2016 from $505,000 six years earlier, the ASCE said.

“Rising incidences of voltage surges, and blackouts, and brownouts that disrupt production will add costs to businesses that will make US manufactured products less competitive in international markets,” the ASCE said.

…the commercial sector will be hit with $53 billion in expenses and the large commercial and industrial segment will pay $49 billion in outage expenses.

In the next two decades, US businesses will lose $271 billion in exports, while businesses and households will pay an additional $142 billion for foreign imports because of power outages, according to the trade group.

The ASCE estimated the United States needs to spend about $338 billion over the next two decades to ensure a robust grid system.

“If adequate investments to replace and upgrade our nation’s electric generation, transmission and distribution systems do not occur, costs (in the form of higher costs for electric power, costs incurred because of power unreliability or costs associated with adopting more expensive industrial processes) will be borne by both households and businesses,” the group said.

Interested in learning about how microgrids keep the lights on? Join us for Microgrid 2020 Global, a free, three-day virtual conference November 17-19.

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Comments

  1. In this report by ASCE, there is an apparent disconnect between the gap investments and outages. Very few outages are generation related, most are T&D related, yet the biggest gap report is for generation? Is this new renewable generation being built for state policy or driven by reliability? If assessing risk of reliability standard with investments, one would expect strong modeling to show where ratepayer investment dollars are needed, not necessarily where utilities want to invest them for maximum revenue return. Talking about the magnitude of losses for customers only increases the need to do risk based analysis to connect need to $$ to address the need effectively.

  2. To echo David’s comment, there is a fundamental problem with the messaging here, presumably attributable to the messaging in the ASCE report. Nothing in the available data suggests that there is a reliability-related generation investment gap in the US, and the account of what the ASCE report says appears to suggest they should know that themselves. Of the outage hours cited, virtually none of it was related to a shortfall of investment in generating capacity. The data reported here jives with those data in a 2017 analysis from the Rhodium Group that demonstrated that between 2013 and 2016 the share of customer outage hours attributable to generation inadequacy was 0.00858% (and if anything an analysis of more recent experience would show an even smaller contribution). Most market areas in the US – including, notably, California – showed generation reserve margins going into this summer 80-300% above the target margins established jointly by NERC and the system operators; in the case of PJM, the published margin was 33.5% while the actual margin was close to 40%, compared to a target margin of 15.5%. Similar if less extreme conditions persist in ISO New England, MISO, SPP, CAISO, the Southeast and elsewhere. PJM added over 45,000 MW of new generation capacity between 2009 and 2018, most of it gas-fired combined cycle but also coal and renewables, to a system with a peak load of about 160,000 MW, in a period when load growth in PJM was effectively flat. Again, a similar story can be told in most US markets. If the recent trend is a pullback in investment in generation, it is for a very good reason – from a resource adequacy perspective, new investment in capacity is simply not needed and would not be needed for many years. ASCE is shooting at the wrong target if their concern is with capacity – there is certainly a need for investment, but it’s driven by climate concerns, not by resource adequacy concerns, with a need to replace existing fossil generation; it’s also driven by integration concerns, with the need for more flexibility on both the supply and the demand side – capabilities, not capacity. Rather than trumpeting context-less gross cost numbers and raising false alarms about generation capacity, ASCE should be deploying consistent metrics for assessing costs vs benefits of investments in different sectors. That would lead to the unarguable conclusion that the reliability need is in transmission, distribution and non-wires alternatives like energy efficiency, demand response and the sorts of grid resiliency measures exemplified by the focus of this newsletter – micro-grids. Please don’t mislead anyone into believing we need to add to the massive surplus of the wrong kinds of generation capacity.

  3. “Half the outages were caused by severe weather, about a third were triggered by transmission disruptions or failures and 18% were because of faulty systems operations.”

    Severe weather, failure of utilities to ‘harden’ their infrastructure to such weather and fire events.
    Transmission disruptions, old infrastructure with constrictions in design for a 40 year old system.
    18% from faulty systems operations, no grid modeling to help energy flow and efficiency along the grid connections is a failure of the utility and its intermediaries that consist of what we call the grid.

    “The ASCE estimated the United States needs to spend about $338 billion over the next two decades to ensure a robust grid system.”

    From some comments on this article, the selections of ‘metrics’ seems to be in question. Bottom line, people come home flip on the light switch, turn on the TV, boot up the computer and expect these things to function any time of any given day. IF not, then questioning minds end up calling the local utility to ask “why.” IF this happens long enough and often enough, they will seek a different solution to a rote utility with excuses like RA looks good, there’s no need for more capacity. With technology available and costs coming down, even during tariffs and Covid-19, people can spend what they would spend on a mid-line auto once and be able to have solar PV and smart ESS with an extended solar PV generated self consumption day that could take care of their home’s electricity needs for 10, 12, 14 hours a day without utility electricity use. IF ASCE’s target metrics are wrong, then why do more electric utilities nationally announce their intentions to arrive at 50% renewable energy mix by 2030 every month. When the public at large is at what sounds like a stellar 95% reliability of the grid, will drive more folks to buy their own systems and forego depending on the utility for all energy needs.

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