How Electricity Grew Up Part 4: Back to the Future

Welcome to the last installment of this 4 part series.  Over the last few weeks, I’ve covered 120 years’ worth of the history of the electrical grid – from Thomas Edison’s Pearl Street Station to the rise of retail electricity choice in the last decade.  (You may want to check out the previous articles – History of Electricity Markets, Part 1; History of Electricity Markets, Part 2; and History of Electricity Markets, Part 3.)   Over that time, the electrical grid has added more and more complexity.  It also went from DC (direct current) to AC (alternative current) electricity.  But fundamentally, both Thomas Edison and Nikolai Tesla would be able to recognize the electrical grid today.

In this article and then next, I’ll look into my crystal ball and make predictions about what’s going to happen to the electrical grid in the future.  I’ll do my best to provide you with reference information where appropriate.  Just keep in mind, these are forward looking statements, so please don’t complain to me if I’m mistaken about the price of electricity in 2050.  (The Energy Information Agency ( doesn’t even go out that far.)  I truly think that the most interesting evolution of the electrical grid is about to happen.  More changes will occur in the fundamental make-up of the electrical grid in the next 20 to 30 years than in the last 100 years.  What the grid looks like today is not all that different than what the grid looked like 100 years ago.  (Compare the diagram below to the electrical grid from 1900 in History of the Electrical Grid, Part 1.  There aren’t that many differences.)  Here’s what the grid looks like today:

Why the grid will change / needs to change

So, the first question is to understand why there is a need for the electrical grid to change in the near future.  By understanding why the electrical grid needs to change, we can get a better understanding of how the grid will change.  Changes to the grid are going to come from two major areas.  The first dynamic is the continued push towards the electrification of underdeveloped areas of the world where a reliable electricity source currently does not exist.  The second dynamic is the more complex of the two.  It involves the evolution of the electrical grid as we know it in the developed world to tackle increased electricity demand, reliability, energy security, and the cost of electricity.  The two dynamics may seem to be un-related at first, but I’ll provide the logical link between the two.

Electrifying the Developing World

Before we dig into the problem of electrifying the developing world, let’s get a sense of the size of the problem.  MIT Technology Review recently published an article about this very subject entitled “A Billion People in the Dark” (  I’d recommend reading the article for more detail about the technologies that can be applied to achieve this.  Below is a picture in that article that effectively demonstrates the scale of the problem.

One billion (that’s B-I-L-L-I-O-N, with a “B”) people live in the areas without lights!

So how do you get electricity to all those locations?  One way is to replicate the way the electrical grid evolved in the developed world.   The challenge is reducing the length of time over which it developed to something more manageable than 100 years, and reducing the cost of developing the necessary infrastructure.  It costs $1 million to $10 million per mile to install high voltage transmission lines, and a centralized power plant can cost billions of dollars and take almost a decade to build.  (China is steamrolling all of these improvements through, but very few other countries have the capital or reach to make these kinds of improvements.)

Another approach is to look at the growth of telephony in the developing world.  In the developing world, the growth of telephones did not evolve the installation of wires all over the place.  The developing countries skipped that step and moved straight to cellular telephones.  The infrastructure costs (cell towers) are much less than building out the entire telephone wire infrastructure.  Unfortunately, it’s not yet possible to send electricity through the air.  (There have been some tests done with inductance of charge over some distance, but these typically stop working if the distance is more than a few feet.  Also, the inductance of charge tends to super-heat metal in the area, which has a tendency to start fires.)

But, there is an intermediate step between the full electrical grid and a fully distributed network like cellular phones.  These are referred to by the incredibly sexy name of “micro-grid”.  Micro-grids are small electrical grids that incorporate one or more generation sources, can include a method of storage, usually batteries, and provide electrical wires over a small area to provide electricity.  Typically, at least one of the generation methods included as part of a micro-grid is from renewable energy – solar, wind, or biomass.  The back-up generation is provided by some sort of generator.

Let’s look at the logic behind the how a micro-grid operates.  Renewable generation sources such as solar or wind are “intermittent” – meaning that they can’t be counted on for producing electricity at any given moment in time.  But, they can be counted one for producing an average amount of electricity over a given period of time.  This is a subtle, but important difference.  Think of it this way – you can plan that, on average, the month of December in Chicago will get 8.5 inches of snow.  But, I can’t plan on 6 inches of snow falling on Christmas day in Chicago.  (Too bad; one of the local jewelry stores will reimburse your Christmas jewelry purchase if it does.)  So, what ends up happening is that the electricity produced by the solar panels or the wind turbine is stored in the batteries so it can be used when it’s needed.  But, what if the batteries run out of electricity?  That’s when the generator kicks in.  The electricity produced by a generator is termed “dis-patchable” because you can get the amount of electricity you need when you need it (within the capacity limits of the generator).    By paring multiple forms of generation together, you increase the reliability of the micro-grid, while decreasing the challenges you face from the individual technologies.   You don’t have to worry about the intermittency of solar, because you have a generator as back-up.  You don’t have to worry as much about getting fuel delivered for the generator, because most of your electricity comes from the solar panels.

(Micro-grids have been popping up in the news recently.  The durability of micro-grids on the East Coast were examined in the aftermath of Hurricane Sandy –  The largest micro-grid was recently powered up on the islands of Tokelau –  Even, Seyi wrote an article about micro-grids –

What about the costs of micro-grids?  How competitive are they?  The cost electricity being produced by a micro-grid is typically more than the cost of the electricity being produced by a centralized power plant.  But, the cost of installing a micro-grid is less than the cost of building out the electrical infrastructure (transmission lines, distribution lines, and transformers) to serve that area.  And, as more and more of these micro-grids are built, the costs of the components that make up the micro-grids are becoming less and less expensive.


Link between Micro-grids and Edison’s Electrical Grid

There are a couple links between the micro-grids that are being installed in the developing world and the electric grid we have in the developed world.  First, as the cost of renewable electricity generators like solar panels and wind turbines decrease, they become increasingly competitive with the existing sources of electricity generation in the current grid.  As these renewable electricity resources get added to the generation mix of the current electricity grid, their intermittency causes more and more intermittency throughout our electricity grid.  Some of the solutions that were developed for the developing world will need to be adapted to our electricity grid.  Second, though we may have transmission lines already built as part of our grid, they are getting more and more constrained as a result of our increasing population and increasing usage.  Because of these constraints, we need to start looking at building new transmission and distribution lines or more efficiently using the transmission and distribution infrastructure that is already built.  One of the methods to more efficiently use our transmission capacity is to learn the lessons from the construction of micro-grids.  By building generation close to where electricity is needed, micro-grids almost completely avoid the need for transmission and distribution lines.  If we could devise a way to generate electricity near where the electricity is needed – distributed generation, we could similarly avoid some of the investment in transmission and distribution lines.


Micro-grids are beginning to bring electricity to the developing world.  The lessons learned in the installation and operation of these micro-grids are having an influence on the evolution of the electrical grid in the developed world.

Tune in next week where I look into my crystal ball again and see what changes are in store for our electrical grid.

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