Power Grid Inefficiencies

Prastuti Singh
December 15, 2014

Submitted as coursework for PH240, Stanford University, Fall 2014

The United States power grid is a complex network of transmission lines responsible for the distributing and transmission of electrical power from power plants to substations to the consumer, you. While it was once considered one of the most influential engineering innovation of the 20th century, this infrastructure is now obsolete. [1] Over the years, the demand for electricity has increased dramatically and the system has become more and more susceptible to blackouts. It is estimated the current system costs the United States over $70 billion in losses each year. [2] This efficiency is manifest in many ways, from the source to distribution.

Once the electricity is generated at power plants, it must be delivered to consumers. This transmission and distribution is accomplished using the high voltage transmission grid and substations. There is generally a 6-8% loss in energy due to resistance of transmission wires and electrical equipment. This may not seem significant but with an annual net generation of 3.9 billion MWh, 6% represents almost $19.5 billion in losses. Another efficiency loss in the transmission and distribution is caused by congestion, which occurs when the normal flow of electricity is disrupted by device constraints or safety regulations. This requires an alternative source of power, such as a generator, which can be economically inefficient. It is estimated that congestion costs can be 7-10% of the net generation. An additional source of inefficiency are Reliability Must-Run (RMR) plants. These are generation plants that must be used because their output is necessary to maintain voltage levels. These plants are often older and less efficient, leading to greater inefficiency. [3]

The Electric Power Research Institute (EPRI) estimates that rebuilding the power grid would cost $10-13 billion/year for the next 10 years. This is 65% more than what is currently being invested in the industry. There are however less costly measures, in both research and implementation that can significantly reduce power grid inefficiencies. Many transmission lines currently rely on alternating current (HVAC) but direct current (HVDC) transmission lines present 25% lower line losses, and several times the capacity of AC lines. Unfortunately, they have traditionally been only cost-effective for long distances but recent technological advances have made HVDC lines much more practical. Another way to increase line transmission is with Flexible AC Transmission Systems (FACTS) devices, which increase the capacity of AC lines by 20-40% by stabilizing the voltage without increasing their failure rate. [3] Of course, FACTS devices will become less useful as HVAC lines are replaced with HVDC lines. Perhaps the most talked about power grid innovation is the Smart Grid. The Smart Grid means augmenting the current power grid with sensors that relay usage data to the central control center, which can then adjust demand as needed by cutting power for non-urgent appliances and uses. This integration would even out electrical usage, conserving power. [4] The Smart Grid would also allow consumers to monitor their energy usage and access statistics about the devices they are using to better guide their use. Additionally, the Smart Grid would allow seamless integration of renewable energy sources such as wind power, solar energy, and electric cars into the power grid. This is particularly important for the future as renewable energy sources become more and more mainstream. [2]

© Prastuti Singh. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] G. Constable and B. Somerville, A Century of Innovation: The Engineering That Transformed Our Lives, (Joseph Henry Press, 2003).

[2] M. Amin and P. Schewe, "Preventing Blackouts: Building a Smarter Power Grid," Scientific American, 13 Aug 08.

[3] "Energy Efficiency in the Power Grid.," ABB Inc, 2007.

[4] D. Lindley, "Smart Grids: The Energy Storage Problem," Nature 463, 18 (2010).