Can Communities Generate Their Own Power?

With the price of gasoline well over $4 per gallon in the United States, the cost of energy is finally a topic of everyday conversation. But the energy challenges we face extend well beyond the gas pump. The era of cheap fossil-fueled energy is over, and thanks to decades of inaction we now face a series of critical choices. And one of those choices is not just what kind of energy to use (such as wind vs. solar) but how we receive that energy via the national electrical grid.

Most people simply take the grid for granted -- flip light switch on, light bulb goes on. The average person may not understand the extremely complex system that supports that simple act or why it may be important to change it in order to move to more locally supported energy projects.

While the details of how the grid actually works can get very complicated, in simple terms, here is how the present system works:

Electricity is usually generated at a large, centrally located power plant normally fueled by coal, natural gas, nuclear energy, hydroelectricity or a number of other sources. The voltage of the electricity produced is then increased at a "step up" substation for transmission over long-distance transmission lines to locations where the power is needed. This part of the transmission system is characterized by tall towers and thick wires. Then, the voltage is decreased, or "stepped down," at another substation. A so-called "distribution" power line then caries the electricity to your home, where the voltage is usually stepped down one more time to normal household voltage. This part of the system is characterized by thinner wires on smaller (mostly treated wood) poles that can be seen on virtually every street in communities across the nation. The entire system is often referred to as "the grid."

In its present form, however, the grid is like a dinosaur: big, slow to adapt, and in some ways rather stupid. Much of the switching for the grid, for example, is right out of the 1950s. People in pickup trucks still have to go out and manually turn parts of distribution lines off (or on) with long, insulated poles. In addition, when the deregulation of the electric power market began in the early 1990s, electricity went from being viewed as an essential public service to a commodity. This encouraged the dramatic growth in the long-distance trading (and gaming by some -- think Enron) of electricity, creating stresses on the system that it was not designed to handle. This has led to dramatic price increases in some parts of the nation (the exact opposite of what promoters of this strategy had promised) and a number of dramatic -- and very expensive -- major grid power failures in recent years.

The annualized cost of grid failures (and even momentary interruptions) of the electric grid is estimated to be around $100 million. For the most part, the grid is aging 20th century technology that, in its present form, is simply not up to the challenges of the 21st century. There unquestionably is a need for major changes to the grid. However, just what those changes should entail is the main question.

A Need for Change

Electricity demand is at an all-time high in the United States. In 2007, total U.S. electricity generation was 4,159,514 gigawatt-hours (GWh) -- a 2.3 percent increase over the previous year, according to the Edison Electric Institute. But consumption of electricity is projected to increase a whopping 45 percent by the year 2030, according to the U.S. Department of Energy's Energy Information Administration. Whether this projection will actually be reached or not can be debated, but this probable increase in demand poses a real challenge to a grid that can barely keep up with present demand. To meet this new demand, the utility industry estimates that the cost of improvements to grid infrastructure could be at least $900 billion between now and 2020.