Thinking Power Grids Like Airspace

Being a Red Sox fan gives me the liberty to indulge my expectations to border on hopeless futility. The electric grid is one of the cornerstones of infrastructure. Zillions of studies have been done to correlate reliable electric power to increased GDP to healthier babies. Many more million studies have been done in the past two decades to show how to de-regulate, re-regulate, partially regulate, and all kinds of combination one can think of. From both the banks of the Charles river to the banks of Hudson to Gulf coast to sunny California to other side of the pond - everywhere people have got involved in throwing ideas and papers by the dozen. Enron. Blackout. The Energy Act. But the saga goes on.

The question I posed to myself - If the power grid is an infrastructure - how would I like to see it? Does it compare with other infrastructure like ports, airports, and roads. Take for example airports? If the grid were operated like the airspace, and power wheeling as commodities being transported - will that work? Thousands of transmission lines resembling air routes. Substation nodes like airports acting like connection points to get plugged into this platform. Thinking the grid as a common. A platform. A marketplace. (As characterized by the book "Invisible Machines" which JP discussed lately). If so, all these "challenges" on who owns the grid, who monetizes, who arbitrages - become a different conversation. Generators and Loads become participants in this market place. Generators sell power and load entities buy power from this marketplace. The system operator (much like the ISO today) controls the physical movement and maintains the physics of the system. Its job is similar to the air traffic controller. The diversity of generation - nuclear, coal, solar, hydro gets morphed as different types of service. Based on their characteristics - their pricing will vary. Need a greater response time, pay extra for the gas power plants compared to coal. We can think about doing the same at the load side too. In concept, we establish a multi-sided platform markets that the book talks about in the contxt of software platforms. As a consumer I get a whole lot of choices - which creates competition - for those - who believe that competition drives innovation and lowers prices by reducing market power.

As for the grid. Just like any other market place - it will have to upgrade to satisfy buyers and sellers. What happens if in your city or country there are poor airports, poor health care, poor education system? Either you bug your policy makers or choose to migrate to some other place (of course, many may give up and stay put - whining or resigned to fate). But, buyers and sellers do force enhancements. Much like what I observed over the last few years what happened in Baltimore airport. Expanded terminal, new parking lots, more shops, more shuttles - Why? Because Southwest started operating a lot many flights. Infrastructure upgrade due to increased demand.

While the grid keeps operating as the largest machine man has ever made, while many have voiced how fragile it is becoming, while many believe the economic incentives are not adequate, while many are looking for solutions in creating multiple regional markets to trade electricity - I wonder how it will be if we look at ownership rights of the grid itself. I'll allow myself in this indulgence for sometime - looking at the barriers, benefits, and "boo-yahs". Thanks to JP and the folks of Invisible Engines for fueling this conversation.