Welcome back. Module 20 covers the grid.

This is the third of four models on the electricity

sector. This lecture will look at transmission, distribution, and the smart grid. So let's get
started.
So we talked about how we generate electricity. Let's talk about how we move the electricity
around. Let's talk about the grid.
The grid is the world's largest engineered machine. It's an incredible invention. It's really
changed the world in a good way.
The grid's basic design was determined from a rivalry between Westinghouse and Edison.
Westinghouse wanted a grid design around AC, Alternating Current. And Edison wanted a grid
designer around DC, or Direct Current.
And they were both great engineers and great businessman. Westinghouse himself was a great
engineer and inventor. And he had a guy named Tesla on his staff.
Edison was also a great engineer and inventor. And he founded General Electric and Edison
Electric. He invented the R&D lab. He invented a cost-effective light bulb. He invented better
vacuum pumps to build the bulb. He invented better dynamos for more stable power to test the
bulb and that kind of thing. He also invented the electric chair using AC power to demonstrate
how dangerous Westinghouse's preferred grid mechanism was. So this rivalry was deadly in some
ways, we could say.
And in that battle, it really hinges around how we move electrical power around. And one of the
keys here is that high-voltage transmission has lower losses. Going back to the discussion in
one of the early modules about electrical energy, the higher the voltage, the lower the
resistance, the lower the losses. So it's convenient and more efficient to move our voltages to
higher levels to move our electrical power around.
Well, it turns out with AC power, with Alternating Current power, voltage can easily be raised
or lowered with transformers. So it was very convenient for distribution. It was very
convenient to raise the voltage, move it around, and drop the voltage again.
DC, by contrast, was very efficient for long-haul transmission. So there was this competition
between Edison and DC and Westinghouse and AC. And AC won out because it was more convenient
for this distribution purposes. And that is still the grid today. It's still an AC grid.
So what we do today is we start off with a generating station. We have a step-up transformer
that raises the voltage of the output to hundreds of thousands of volts, move those highvoltage electrons around over transmission lines, drop it back down with a step-down
transformer to different levels that are more convenient for different customers.
So we might have a primary customer, like a manufacturing plant, might want just a few
thousands of volts of potential. Whereas a home might just want 120 or 240 volts for our
appliances. So we generate the power, step up the voltage, move it at high voltage across,
transmission lines, and step it back down to the different customers. And AC makes it very easy
to do that.
The US has built these grids over time with AC in different ways. We basically have three grids
in America-- East, West, and Texas. And there are different reliability councils set up to
maintain grid operation because reliability of grid operation is one of the key priorities. We
use electricity to preserve our food with refrigerators. So we can't have the electricity
system fail too long or else it causes problems for our food preservation.
The transmission and distribution electrical infrastructure in the US is quite extensive.
Transmission has something like 200,000 miles of lines. It's in rural areas, typically. It's at
69 to 765 kilovolts. So it's a high-voltage system. The lines are often in pairs for DC or
three-phase current for AC. Less than 1% of transmission is underground. These are above-ground
lines.
Distribution has many more lines, 5.5 million miles. It's generally urban. And it's at lower
voltages, below 69,000 volts. So we have many more miles of low-voltage lines for distribution
in the cities. And then we have long-lined high-voltage transmission to move it from city to
city, or from power plants out in the rural areas to the cities.
The traditional transmission infrastructure challenges are expensive. Blackouts are one of the
problems. Blackouts happen.

And 60% of our blackouts are just from weather. And those blackouts cost something like $150
billion every year. Hurricane Sandy and the northeaster that came with it cost, for response
and restoration, totaled several hundred million dollars from just that one storm.
And then if we want to build more transition, it's also expensive. A rule of thumb is about $1
million a mile to build a transmission line. Sometimes it's $10 million a mile. Tree trimming
is about $10,000 to $20,000 per mile in distribution. So you have to trim the trees because as
the trees fall on the lines, they knock the lines out. In ERCOT, the Electrical Reliability
Council of Texas, the transmission service providers paid $1 million a mile in upgrades-- not
even new lines, but just upgrading the current lines.
The smart grid addresses potential problems that we'll have in the future as well some of the
current problems we're having today. The current grid is aging and needs updating anyway. We
have an increased population and a higher dependence on electricity as time goes on.
We need to manage increased intermittent generation sources like wind and solar. And we'd like
to manage our peak demand and overall consumption without building new power plants, and using
our existing grid resources more effectively. So there's this idea that a smarter system, a
smart grid, could help us manage all those goals at once in a more economically effective way.
The smart grid is not just smart meters, although smart meters are a big part of it. The smart
grid is really the next generation energy and information network where it's got integrated
sensing, communication, and control on both utility and the customer side. So embedding sensors
and information along with the electrons so we know what's happening with them as they move
along. Real-time diagnostics, outage detection, automated relays, communication to let us know
when there are outages, that kind of thing. Smart meters, smart appliances, home energy
management system, or HEMS, and home area networks, HAMS, in the homes.
And then we need new policies and markets along with it. It's not just the meters and sensors.
We need new pricing options, time of use, real time, that kind of thing, as well as distributed
generation and distributed demand response. So the idea is that with more information, more
sensors, more capabilities, we can control our demand in a way to keep the whole system more
stable and more efficient and cleaner.
Conventional meters and billing have shortcomes. A traditional electric meter has been around
for about 100 years as a spinning analog dial at the back of the house. It's just this dial
that spins slowly that tracks your electricity use, or accumulates your electricity use.
It requires manual reading. Someone has to go back and read the dial. They have to climb over
fences and fight off dogs and thorn bushes to get that reading. And that consumption of
information is disaggregated.
We get a bill that accumulates our electricity information and sends it to us. It has 30 days
of consumption and is sent to us a week or two later so that information in your bill might be
from 45 days ago. And its really hard to remember if your bill is higher than normal what I
was doing 45 days ago. What appliance caused this problem? Was I leaving the refrigerator
door open or something like that. So there is a disaggregation of the information and
consumption, which makes it difficult to adjust our behavior.
Smart meters would presumably yield more information. They would give us automatic readings.
They would immediately alert the utility to outages. So today, the way the utility knows if
there's an outage is people call in on the phone and say my power is out. And then when enough
people call in, they'll drive out with trucks with flashlights looking for what power line went
down.
With a smart meter, it should immediately alert the utility, tell the utility, I'm going out of
power. I'm dying. Come fix me. And they can pinpoint exactly where the problem is and get up
time to improve. They can get the power back up much more quickly.
At the same time, you can use this information to give consumers real-time usage and price
information. They could have digital readouts in their homes to know what they're using the
electricity for and what appliance is causing that consumption and how much it costs. People
have no idea how much electricity their dryers need. But with this kind of meter, they would
know that information and presumably can make better decisions.
Not all smart meters are the same. There's AMR, Automatic Meter Reading, and AMI, which is
Advanced Metering Infrastructure. AMR is sort of like smart grid 1.0. It's one-way automatic

communications with the utility. The meter tells the utility how much electricity is being used
in the home. AMI is two-way communications where the utility and the meter can talk to a third
party. Therefore, a person, the consumer, can see how much energy they're using also. So it's
more information for more people.
Because of all this information, the smart grid will be data intensive. Conventional billing is
two data points a month, one at the beginning of the month and one at the end of the month. And
then the difference is taken to give you your bill.
With a smart system, with smart billing, you might have meter readings every 15 minutes. That
means a couple thousand meter readings per month. That becomes a data burden that most systems
aren't capable of taking on yet.
Just to give an anecdote, in Austin smart meters were put out to every customer. That cost $50
million. It was about $150 per customer.
And then the software have to be upgraded also, which is another $50 million, because the
existing software didn't have the data capability to take all the extra data points. The
software, the data, the information is just as expensive as the hardware to make the system
smart. And this is a looming problem for utilities across the nation.
In general, information will be useful for us. The extra data, the smartness we'll get, the
intelligence we'll get from the data will help us make better decisions. At least, that's the
idea. But I would contend that labels aren't always enough to encourage better behavior.
For example, we have a fuel economy label that's given on cars that tells us exactly how bad
our cars operate. People buy cars with pour fuel economy despite the label. The information's
not enough. However, when gasoline prices are high and people wish to reduce their fuel
consumption, the label's very effective. And that's part of it.
Information's a part of the story. That's not enough. Just telling us how much we use isn't
going to change our behavior. We have to want to change your behavior. And then we can use the
labels to achieve it. Price is one way to get there.
In general, good revolutions to consumption combine technology improvement, information,
cultural pressures, and prices. The smart grid, a lot of that's really about the information
piece, not the rest.
To learn more about this topic, make sure you go do the online exercises. And then I'll be sure
to see you at the next lecture.