5.16 — The electrical grid: keeping the lights on

Host Walter Isaacson and guests discuss the electric grid's early roots with Thomas Edison and trace the path it's taken as it went bigger and bigger...and eventually smaller and smaller, getting smarter every step along the way.
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In this episode:

  • Indispensable yet fragile (0:00)
  • Look but don't touch (3:06)
  • Edison and Tesla (5:44)
  • Making money off electricity (9:36)
  • The rise of renewables (13:28)
  • A change in the weather (16:24)
  • Smarter electricity means a smarter grid (19:40)
  • A community that produces as much as it consumes (23:03)
  • The electric vehicles of the future (26:01)
  • The story of change (29:24)

Electric grids used to be small, with power plants located near what they were powering. As they grew and got further away, many people realized that bigger wasn’t always better. Now smart microgrids are taking over and are being powered using some surprising sources. Explore the story of power, renewable energy and more on a new Trailblazers.

We gave you some information on the electric grid, but you could always stay more “current” with other Trailblazers episodes like these:

  • Batteries feature prominently in stories about the electric grid, and we did an entire episode on them.
  • Find out more about electric cars from our automobiles episode.
  • Renewable energy and conservation go hand in hand when it comes to a sustainable future.

“10 years, 15 years, 20 years from now, everybody's going to be generating their own power.”

— Andres Carvallo, founder and CEO of CMG Consulting

Guest List

  • Gretchen Bakke is the author of The Grid, a 2016 Bill Gates pick and the 2020 ethnography The Likeness. Her work focuses on the chaos and creativity that emerge during social, cultural, and technological transitions. She is currently a senior researcher at the Institute for Advanced Sustainability Studies in Potsdam, Germany.
  • Peter Asmus is Research Director at Guidehouse Insights focusing on emerging energy distribution, integration and optimization platforms such as microgrids, virtual power plants and distributed energy resource management systems.
  • Andres Carvallo is the founder and CEO of CMG Consulting, a strategic planning and advisory firm focused on Smart Grids, Smart Utilities, Smart Cities, and Smart Buildings. Carvallo is known as the “Godfather of the smart grid” for designing and building the very first smart grid in the US at Austin Energy and the author of “The Advanced Smart Grid.”
  • Bryan Hannegan is President and CEO of Holy Cross Energy (HCE), an electric cooperative serving more than 44,000 members in Western Colorado. HCE is leading the responsible transition to a clean energy future by increasing the renewable energy it provides to its members to 100% by 2030.
  • Gregory Poilasne is the Co-Founder, Chairman and CEO of Nuvve. Nuvve is the global leader in vehicle-to-grid (V2G) technology offering high-powered charging and grid services that optimize unused and renewable energy.

Walter Isaacson:

Imagine for a moment that you’re riding the New York City Subway on a hot summer day in 2003. Then, all of a sudden, the lights and your train car go out and the subway grinds to a screeching halt. The subway is packed with commuters and you’re stuck between stations underground. It’s dark. 10 minutes pass, then 20. You start to hear the whispers of other passengers on the subway. It’s been nearly two years since 911, and it’s clear some people on your train can’t help but think that this unexpected stop might be another terrorist attack.

Walter Isaacson:

On August 14, 2003, a blackout swept across eight Northeastern states and parts of Canada. But it wasn’t caused by a terrorist attack. It all began with a tree. Well, three trees to be precise. The problem started when a high-voltage power line in Ohio sagged in the summer heat. When it came in contact with a tree, it caused an explosion and shut down the line. Over the next hour and a half, a second wire, just south of Cleveland, also sagged into a tree and switched off, followed shortly by yet another wire contacting a third tree. Then an almost unimaginable string of computer failures, coupled with several critical human errors, turned a potentially bad situation into a catastrophic one. Other lines in the system quickly became overtaxed. A couple of hours later, the cascade of darkness began. 50 million people lost power for two days. $6 billion in business revenue was lost. It was the largest blackout in American history.

Walter Isaacson:

The electrical grid has been called the world’s largest machine, but to keep it running we have to reimagine how it works. I’m Walter Isaacson and you’re listening to Trailblazers, an original podcast from Dell Technologies.

Speaker 2:

The energy is here within this universe, on this planet.

Speaker 3:

The miracle of electricity.

Speaker 4:

Power plants.

Speaker 2:

A constant quest for new ways to harness and make use of energy resources.

Speaker 4:

Transmission lines.

Speaker 3:

It’s tremendous power.

Speaker 4:

Transformer banks.

Speaker 2:

Pure energy charging through the atmosphere always at your fingertips.

Walter Isaacson:

Most Americans don’t think much about the electrical grid. We see the poles and wires that line our street, but we don’t think about the thousands of power plants, the millions of miles of high-voltage lines, and all the distribution transformers that make up the American electrical grid. The fact that we don’t think a lot about it is a sign of its incredible success.

Walter Isaacson:

For more than 100 years, the grid has been the backbone of American economic prosperity. It has reliably delivered electricity to our homes, factories, and offices. And that’s a remarkable achievement because delivering electricity is a very tricky business.

Gretchen Bakke:

Electricity is a force, electromagnetic force, and that means that there isn’t anything else like it in our world.

Walter Isaacson:

Gretchen Bakke is the author of the book The Grid: The Fraying Wires Between Americans and Our Energy Future.

Gretchen Bakke:

It just doesn’t do anything that anything else does. It doesn’t run downhill. It doesn’t trickle out of an outlet like water would, even though we tend to think of it in terms of water. Another problem is that it’s lethal, so that means you can’t touch it. And there’s also not so many things in our world that we interact with so intimately as we do with electricity that we can’t actually ever come into contact with.

Walter Isaacson:

And there’s another important quality of electricity that makes it different from just about any other product you can think of. You can’t save it up and use it later.

Gretchen Bakke:

The only place you can kind of control it is in how fast or how much you make of it. But the second it’s made, it’s delivered. It’s very hard to imagine how we could have, I think, 36,000 different utilities on a single grid delivering this thing that if you go to the bathroom in the middle of the night and turn the light on the light actually goes on. It’s just beyond conception that we do that, but we do do it. And we have been making that system work for over a century.

Walter Isaacson:

In fact, the National Academy of Engineering named the electrical grid the greatest engineering achievement of the 20th century. But the grid might never have been built if it were not for two remarkable trailblazers who each had radically different ideas about the future of electricity.

Walter Isaacson:

There are few inventors more famous than Thomas Edison. Edison filed more than 1,000 patents and is credited with inventing the phonograph, the automatic telegraph, and the carbon telephone, just to name a few. But without a doubt, one device stands above the rest as his most well-known invention, the incandescent light bulb. Finding a way to generate and transmit electricity to those bulbs was a logical next step. So in 1882, he opened his first power plant on Pearl Street in New York City.

Gretchen Bakke:

The system that Edison came up with was very, very small. And so you made, usually with coal, sometimes with river water, you made electricity and then you would send it at most about a mile. And then if you wanted to do it further than that, you then had to build a separate grid. So if you wanted to move a streetcar, you needed a particular grid. And you had to keep extending that system with little, more little coal-fired power plants. And what that meant is that this Edison idea it was great for something like lighting downtown, like a main street, or lighting a brewery or lighting a rich man’s house. These were the kinds of things that electricity was for in the 1890s.

Walter Isaacson:

The electricity that Edison generated was transmitted by a system known as direct current or DC, but DC had its limitations. Enter Edison’s great rival Nicola Tesla.

Peter Asmus:

Tesla is an interesting character. He sort of was the original mad scientist.

Walter Isaacson:

Peter Asmus is the research director of the consulting firm Guidehouse Insights.

Peter Asmus:

If you see pictures of Tesla, he viewed electricity as this magical substance. He wanted it to be free. And so he wasn’t really a businessman, whereas Edison was the flip side of that.

Walter Isaacson:

Tesla got a job with Edison Machine Works in 1884, shortly after arriving in America from Croatia. He worked on Edison’s DC generators, but he never shared his boss’s enthusiasm for the technology.

Peter Asmus:

Back then, the problem with DC is that it couldn’t be transmitted over long distances, and so it worked with these small microgrids. But as people wanted more electricity and cities grew, it wasn’t really compatible with that.

Walter Isaacson:

Instead, Tesla believed the future lay in alternating current, or AC. Unlike DC, where the current runs at a constant voltage in only one direction, AC could travel over long distances without losing much strength. This meant power plants could be larger, fewer in number, and cheaper to operate. AC versus DC, the battle for electrical supremacy was on.

Walter Isaacson:

It was a vicious, deeply personal war that occasionally sank to the level of the absurd. In order to demonstrate the dangers of AC, Edison staged public electrocutions of stray animals. He even arranged for alternating current to be used the first time a convicted murderer was put to death in the electric chair. In the end, AC simply made too much sense and eventually won the current wars.

Walter Isaacson:

But there was still another piece of the electricity puzzle that needed to be solved. People still didn’t know how to make money selling electricity, and here Edison emerged victorious.

Peter Asmus:

And he came up with the idea of charging per kilowatt hour, basically per consumption. And that’s, of course, the basis of the modern electricity industry.

Walter Isaacson:

In fact, it was also Edison who put meters in homes to monitor electricity use. But in the 1890s, only wealthy people had electricity in their homes and they only used it for a few hours a day in the evening. Edison struggled to figure out how to turn electricity into a profitable business.

Gretchen Bakke:

The change that mattered was understanding that you could sell electricity to poor people and make a profit.

Walter Isaacson:

Gretchen Bakke says it was Edison’s chief engineer, Samuel Insull, who first understood that electricity required economies of scale. So in 1894, he built America’s largest power plant in Chicago. A few years later, Insull became the president of Commonwealth Edison and created the country’s largest utility.

Gretchen Bakke:

And what he realized is that if you want to stay in business making electricity, what you need is a massive customer base that is going to use electricity 24 hours a day. He had to actively seek manufacturing facilities that would use electricity in the middle of the day. It was this that Insull understood.

Walter Isaacson:

Not only that, Insull also needed to find a way to sell electricity at night and to the working class. And oddly enough, it was the invention of a then novel kitchen appliance that helped him do it.

Gretchen Bakke:

The electric refrigerator which is designed and marketed ferociously as a way of using electricity at nighttime when otherwise you could just turn the system off. And so the electric refrigerator then becomes an answer to the coal-burning power plant. These two things are linked technologically in order to make a grid which is profitable and sensible for a company to run. So he gave us the grid, but he also gave us the utility system.

Walter Isaacson:

By the end of the 1920s, Samuel Insull’s utilities served more than four million customers in 32 states and were valued at nearly $3 billion. His business empire didn’t survive the Great Depression, but his business model endured, bigger was better. And rather than fight government regulation, like most industry leaders at the time, Insull welcomed it. Peter Asmus.

Peter Asmus:

So that was the other idea that Insull, as you mentioned, came up with the idea of, well, this is like a public good, doesn’t it make more sense to have monopolies? And that’s where there was that grand bargain. Yes, you can have monopolies, but you will be totally regulated by state regulators and they will set your rates of return. So we started off with a totally competitive, anyone builds your own power system sort of microgrid model to this large centralized bigger is better model.

Walter Isaacson:

The grand bargain served America well for much of the 20th century. Massive power plants generated all the cheap electricity a booming economy could use. But it wasn’t built to last.

Bryan Hannegan:

The existing electric grid was built 50 to 100 years ago with one particular architecture in mind.

Walter Isaacson:

Bryan Hannegan is president and CEO of Holy Cross Energy, a Colorado-based rural electric utility.

Bryan Hannegan:

The grid then existed to take the power output from these large central power plants and distribute it out to the areas where people were living and consuming power. So it was kind of like a one-way interstate highway along the transmission system and a set of side roads, state highway system, if you will, for a distribution utility like Holy Cross to bring it to the homes and the businesses in the area. That works really fine as long as your customers on the receiving end are passive and they don’t really ask for much more than the lights on and the rates low and the proverbial warm shower and cold beer. But once those consumers start actively generating their own power with solar on their rooftops or a wind in their communities, then we start to have an issue where that one-way distribution system, that one-way highway is now subject to two-way traffic.

Speaker 8:

It was announced today that gasless Sundays will go into effect as of next month.

Walter Isaacson:

The shift from a one-way to a two-way electrical grid began in the 1970s.

Speaker 9:

We’re in an energy crisis now and will be for some time to come. All we can do is face…

Walter Isaacson:

The OPEC oil embargo of 1973 caused a dramatic rise in the price of oil. And although energy from renewable sources was still considerably more expensive than fossil fuels, the gap was beginning to narrow. At the same time, Washington began unraveling the grand bargain by deregulating the energy market. For the first time, utilities were required to pay a market price for electricity generated by their customers. Gretchen Bakke.

Gretchen Bakke:

So you could build a little dam on a river, and if you could prove that you made electricity on that dam for less money than the utility would have paid to make it, they were required by federal law to buy that electricity from you. And this was a tiny crack, tiny, tiny, tiny crack in the utility system. And it’s that crack which has grown and grown and grown and grown and grown. Until today, it seems perfectly normal to us that somebody could actually put solar panels on their roof and make electricity and sell it back to the grid. So that was the shift in the 1970s.

Walter Isaacson:

Life on the grid today is much more complicated than it was before deregulation and the rise of renewables. Today, about 20% of electricity produced in the U.S. comes from renewable sources. And as power plants modernize, Peter Asmus thinks this number will only get bigger.

Peter Asmus:

And a lot of those centralized facilities increasingly will be renewable. They will be large solar farms, large wind farms. And so the power supply is also changing with a pretty radical shift, more to renewable energy.

Walter Isaacson:

But the supply of renewables can vary with the weather and consumers want their lights to work all the time, not just when it’s windy or sunny. That’s why striking a balance between energy supply and energy demand is such a critical challenge for everyone involved in renewable energy. Improving the capacity to store electricity generated from renewables is one obvious answer. Batteries are getting bigger and better all the time, so much so that some can now provide storage at the grid level. But even those giant batteries won’t help when wildfires, floods, hurricanes, and other severe weather events linked to climate change cause the grid to come crashing down.

Walter Isaacson:

In fact, weather-related power outages in the United States are up 67% since 2000. And while much can be done to improve the resiliency of the grid’s infrastructure by strengthening poles and wires, Asmus favors an idea that has been around since the days of Thomas Edison, microgrids.

Peter Asmus:

The large grid has just vulnerability because of this whole idea of sort of a centralized system. And the things like microgrids is they distribute the power so there’s not a single point of failure. There’s just multiple points of failure, which just means there’s less vulnerability because not the whole grid’s going to go down. If the grid goes down, it’s just going to be more isolated. So you just have a more diverse system, which makes it more resilient, and it’s also more sustainable.

Walter Isaacson:

Today, microgrids come in all shapes and sizes, from single buildings to university campuses, military bases, and even entire urban neighborhoods. And these days, more and more communities on the grid are building microgrids to protect themselves when it goes down. Ever since the days of Samuel Insull, the prevailing ethos of the American electrical grid has been bigger is better, big utility companies generating electricity from big centralized power plants. Today, however, the grid is becoming more decentralized, diverse, resilient, and sustainable. And one of the reasons why that’s happening is because the grid is also becoming a lot smarter.

Andres Carvallo:

Simply put, [inaudible 00:19:44] of the integration of an electric grid and communications network, software and hardware to monitor, control, and manage the creation, distribution, and consumption of energy.

Walter Isaacson:

Andres Carvallo is the founder and CEO of CMG Consulting in Austin, Texas. In 2003, he began working with the utility Austin Energy to develop America’s first smart grid. It involved installing data- collecting smart meters and thermostats in customers homes. Then they installed sensors along transmission lines that could update consumption data every 15 minutes. For the first time, there was a two-way flow of both electricity and data.

Andres Carvallo:

Instead of being reactive, [inaudible 00:20:37] waiting for you to call me to tell me you don’t have power, we knew when you didn’t have power because your meter told me I just went out, didn’t have power, this is my last communication to you. Then we would know in advance this customer’s out of power. We need to figure that out, where we’re going to restore the power. So we could go from reactive to proactive.

Walter Isaacson:

In fact, Carvallo believes smart grids actually helped reduce the severity of power outages in Texas when the state was ravaged by a fierce snowstorm earlier this year.

Andres Carvallo:

If we didn’t have the smart grid that we have in Texas today, that snowstorm would have taken us down to our knees. It was only four million people out of 30 million that didn’t have power. The grid never went down 100%. So can you call that a success? You know, I mean the system has flaws and this is why we had the outage issues and they are working on imposing the right solutions.

Walter Isaacson:

In recent years, Austin Energy has moved to what they call Smart Grid 2.0, which brings data collection even deeper into homes and businesses. It includes tracking appliance use in real time. Customers now have a running record of how power flows through their homes and offices and how that flow changes according to time of day and weather. That data will be critical when the grid becomes a true two-way street. They won’t just be using renewable energy but creating it as well and putting it back on the grid. Carvallo isn’t sure when that will happen on a large scale, but he’s convinced that it will.

Andres Carvallo:

10 years, 15 years, 20 years from now, everybody’s going to be generating their own power, every building will become a positive energy building, and you’ll have power, energy storage, and all this stuff. And when there’s an outage, it won’t matter, you’ll have your own service.

Walter Isaacson:

But 1,000 miles north of Austin in the small town of Basalt, Colorado, the future that Carvallo just described may already be taking shape. The Basalt Vista Project has the lofty goal to become the first all- electric community that produces as much renewable energy as it consumes. The homes are linked together in a microgrid, but they’re also connected to the main grid. Each house has solar panels on the roof and large battery packs for storage when the sun isn’t shining. It also has an internet-connected control box that automatically balances the energy load between houses. The project is run by Bryan Hannegan’s utility, Holy Cross Energy.

Bryan Hannegan:

They operate at times as a virtual power plant. We will send them a signal to either manage their demands, so as to reduce our need to go purchase power, or we’ll ask them to actually charge up the batteries and charge up the vehicles because we’ve got so much wind and so much solar that we need to put it somewhere. That’s acting like a virtual power plant. They’re either generating and consuming all on their own, or they’re also able to share amongst themselves and orchestrate things. It’s kind of like the electric equivalent of going next door to your neighbor’s house to borrow a cup of sugar. I’m going to borrow a cup of solar because you’ve got more than you need.

Walter Isaacson:

As impressive as that sounds, Hannegan thinks that what Holy Cross Energy is doing in Basalt just scratches the surface of what’s possible. His ultimate objective is what he calls an autonomous or self-driving energy grid.

Bryan Hannegan:

The self-driving grid is really a theoretical concept that we started working on at the lab where all of the devices, everything connected to the grid, and the grid operating system they’re able to in effect drive themselves. Let’s say a consumer runs a industrial process on their facility. Another consumer that may not be home, their house automatically stops charging the battery and starts pushing solar into the grid and actually gets paid by the business, the industry for the service where they’re using the grid as kind of that transaction medium. And we’re orchestrating all of that. And that’s happening without human intervention. That is a really exciting prospect if you’re looking to keep the lights on in a world where we’re 100% renewable energy-driven.

Walter Isaacson:

In the future, a portion of the national energy grid might be powered by smaller, renewable energy microgrids, like the project in basalt. But in all likelihood, it will depend on a handful of different innovations. And one of those innovations might be the electric vehicle. Globally, it’s estimated that there’ll be more than 150 million electric vehicles on the road by 2030. That’s a lot of energy sitting inside car batteries. A 100-kilowatt battery in a Tesla can store enough energy to keep a house up and running for a week. And now, some innovative entrepreneurs are figuring out how to bring surplus energy from those batteries into the grid. It’s called V2G or vehicle-to- grid. And it could become a very important part of our energy future.

Greg Poilasne:

So my name is Greg Poilasne. I’m the chairman and CEO of Nuvve and as well as the co-founder of Nuvve.

Walter Isaacson:

In 2010, Poilasne was working in the telecommunications industry when he met a researcher at the University of Delaware named Willett Kempton. Kempton had already developed a prototype of a V2G platform. Poilasne liked what he saw. So together, they formed a company called Nuvve.

Greg Poilasne:

His idea was there is a big battery in a car. Cars are parked most of the time, 80, sometimes 95% of the time. And if we put a little bit more car electronics, you can not only take energy from the grid, put it into the battery inside the car, but you can also take that energy and put it back onto the grid. And now you are transforming an electric car into storage on wheels basically. The idea of the platform is to be able to generate some revenue while the vehicles are parked, providing grid services. Think very much the same way Airbnb. You are providing your apartment maybe when you are not using it. In this case, we are using the battery of the electric vehicles while the electric vehicles are parked.

Walter Isaacson:

V2G is already successfully up and running in Denmark. And in the United States, Nuvve has partnered with school bus companies to tap into the massive amount of unused energy that sits inside electric buses that sit idle most of the time. And if providing a clean, efficient way to move energy to the grid isn’t enough incentive, Poilasne points to the financial benefits that vehicle-to-grid can bring to those electric vehicle owners.

Greg Poilasne:

Electric vehicles are still expensive. If you have the ability to generate some revenue while the vehicle is parked, then you can drastically reduce the total cost of ownership. In the case of the Denmark, we’re able to reduce the total cost of ownership by 25%. In the case of school buses, compared to an electric school bus, we are able to reduce the total cost of ownership by about 40%.

Walter Isaacson:

And auto industry giants see the benefits of the technology as well.

Greg Poilasne:

Volkswagen is talking about V2G very, very loud and the fact that all their vehicles are going to be V2G compatible. So I think the V2G implementation is really going to become just [inaudible 00:29:16]. It’s going to be everywhere. I look at it in the same way in the 90s when you had the telecommunication revolution. This energy and transportation revolution here is now impacting very, very, very large industries.

Walter Isaacson:

The story of the grid is the story of change. In the 19th century, power plants sat on top of buildings and powered that building and not much else. For most of the 20th century, the grid was about standardization. Electricity was generated and delivered to everyone in exactly the same way. The 21st century grid is about diversity, microgrids, smart grids, virtual power plants, and V2G. These are all the ways the grid is being reimagined for the 21st century. And this means we may not have to rely on the main grid as heavily as we did in the past. We can be more self-sufficient, sustainable, and resilient. Trailblazers like Edison, Tesla, and Insull, built, extended, and monetized the electric grid. And while the grid they gave us is slowly but surely getting a much needed tune up, we will always need the great machine they built to help keep the lights on.

Walter Isaacson:

I’m Walter Isaacson and you have been listening to Trailblazers, an original podcast from Dell Technologies. For more information about the guests on today’s show, please visit delltechnologies.com/trailblazers. Thanks for listening.