Intro to the Electrical Grid

I'm just getting started...

The grid is, in my opinion, one of the two most amazing inventions of the human race. (The other is the EUV lithography machine.) The grid needs to perfectly balance electricity generation and consumption micro second by micro second. Across a gigantic region.

The grid from inception to 1970 grew at a very predictable and manageable rate. And between that comfortable growth and the monopoly each was granted for their region, reliable power at an ever decreasing price could be delivered.

And then the oil crisis hit. This played havoc not only with pricing, but it reduced demand. So utilities saw their costs increase and their demand decrease, leading to increased prices. This was new.

And then shortly after that came a big game changer - home solar and wind. The entire system, not just technically but economically, was designed around large utility owned generators that sent power one way to homes, businesses, & factories. Now you suddenly had power coming the other way, from those homes, etc.

So you now have an industry that had operated one way very comfortably for three generations suddenly having to learn how to operate in this new world. The utilities were figuring it out over the subsequent years (‘70 - ‘15) when…

Crypto hit. And now AI. Suddenly utilities are being asked to grow their output at two - three times their previous rate. And with a lot more uncertainty - will the datacenters still need them when they get the additional power? Will they at that time have too much, or too little power?

Keep in mind you generally don’t bank electricity for later use. There is some of that and with the advent of ever declining cost in batteries, even more. But utilities bank power for periods of 4 - 12 hours. So they remain in this delicate dance of matching the power generated with the power consumed, second by second.

And the biggest issue is not generating more power. It’s getting that additional power to the customers. You can build a solar farm with batteries in the middle of nowhere very quickly. The problem is, all the transmission lines are already at capacity. Or there are no hi voltage lines run anywhere near your proposed solar farm.

This is not to say generation is trivial. Nor getting it that last mile to a home or business. But the critical issue is the grid. And so that will be the topic for the next series of posts.