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15.4: Some Infrastructure Management Issues for Electricity

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  • The relative costs of different generating modes vary considerably from year-to-year, day-to-day and even minute-to-minute. Solar and wind power are intermittent and subject to rapid stoppages. The prices of coal, natural gas and petroleum can vary considerably. The cost of nuclear power plant construction and uranium fuel also have great uncertainty. Tax credit provisions for renewable energy also exist, at both the federal and state levels, and these often change over time. As a result, risk management and cost minimization are continuing challenges.

    A few power interruptions per year are fairly common but can have substantial costs for users (Figure 15.4.1). Worker productivity declines and refrigerated items may end up spoiling. Establishments with urgent needs for continuous power such as hospitals may invest in back-up generator systems.

    Figure \(\PageIndex{1}\): US Electric Power Service Interruptions, 2015. Source: EIA, Public Domain,

    Electricity generation is responsible for the largest sector share of greenhouse gas emissions in the US inventory (See Better Management EPA inventory reports at: As a result, there are continuing proposals for regulation or tax on power generation emissions. Conventional air emissions are already regulated, such as the cap-and-trade regulation on Sulphur dioxide emissions.

    Renewable energy goals and standards are becoming common in the US, motivated by environmental concerns, energy independence and hopes that investment in new forms of energy will spur innovation and scale economies that reduce costs. For example, the renewable portfolio standard enacted by Governor Edward Rendell in 2004 as the Alternative Energy Portfolio Standards Actn213 in Pennsylvania has provisions requiring that qualified power sources provide 18.5 percent of Pennsylvania’s electricity by 2020. There are two tiers of qualified sources that meet the standard. Tier 1 sources must make up 8 percent of the portfolio, and include wind, solar, coal mine methane, small hydropower, geothermal, and biomass. Solar sources must provide 0.5 percent of generation by 2020. Tier 2 sources make up the remaining 10 percent of the portfolio, and include waste coal, demand side management, large hydropower, municipal solid waste, and coal integrated gasification combined cycle (PA213, 2004).

    With greater reliance on renewable energy sources, management of the grid becomes more difficult, with the need for robust back-up power or real-time demand management. Interruptible power contracts already exist, and there is considerable interest in improved demand-side management and real-time pricing. Moreover, the location of generating sources changes, with concomitant need for new investment in transmission infrastructure.

    A variety of risks also exist for power generation infrastructure. As identified by the Department of Homeland Security (2015), the major risks to the US infrastructure are:

    • Cyber and physical security threats;
    • Natural disasters and extreme weather conditions;
    • Workforce capability (“aging workforce”) and human errors;
    • Equipment failure and aging infrastructure;
    • Evolving environmental, economic, and reliability regulatory requirements; and
    • Changes in the technical and operational environment, including changes in fuel supply.

    Cybersecurity and natural disasters have received considerable attention from power generation infrastructure managers, but much more effort is needed to ensure resilient and secure infrastructure.