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Aging Power Grid Costs Billions to U.S. Economy

Power outages and power quality disturbances cost more than $119 billion a year to the U.S. economy, according to a study by the Electric Power Research Institute.

PALO ALTO, California, US, 2001-08-03 [SolarAccess.com] Power outages and power quality disturbances cost more than $119 billion a year to the U.S. economy, according to a study by the Electric Power Research Institute. “The results of this study emphasize the need for the energy industry to work with equipment manufacturers and end-use customers to maximize power reliability and quality, and develop a systematic approach to meeting electricity supply requirements in the 21st century,” says EPRI vice president Clark Gellings. “U.S. business activity is becoming more reliant on digital circuitry and more sensitive to incredibly minute variations in power supply -variations that would have gone unnoticed in years past.” The study shows that two million establishments in three key sectors of the economy collectively lose $45.7 billion annually to outages, and another $6.7 billion to power quality disturbances such as voltage sags and other occurrences that do not allow equipment to function properly, causing temporary work stoppages, loss of data and other problems. An unprotected microprocessor may malfunction if electricity is interrupted for one-quarter of a single AC cycle, or 1/240th of a second. The study examines a representative sample of 985 firms in three sectors that represent 40 percent of U.S. gross domestic product, and which show particular sensitivity to power disturbances. The sectors are digital businesses and firms that rely on processing of data, continuous process manufacturers such as chemicals and petroleum, and fabrication manufacturers plus non-electric utilities and transportation facilities. The analysis included a literature review by Lawrence Berkeley National Laboratory, and was produced for EPRI’s Consortium for Electric Infrastructure to Support a Digital Society (CEIDS). It highlights the growing need of several industries for ‘digital quality’ electricity, which is always perfect and always on. The study also shows that California firms experience the highest costs in the nation for both power outages and power quality disturbances. Digital businesses are the most sensitive to outages and power quality economic losses, but show the lowest per-establishment losses for power quality disruptions. “Because they are part of a newer sector in the U.S. economy, digital firms tend to address power reliability and quality issues in the design phase by, for example, purchasing equipment with power quality conditioning protection, installing local generation and employing uninterruptible power supplies,” explains Gellings. “While such investments add to firms’ upfront costs, the study shows these investments can lower electricity-related economic losses down the road.” The fifth largest technology centre in the world, located in Miami, spent more than half of the total cost of $565 per square foot on power conditioning equipment. By contrast, many conventional firms are satisfied with the low reliability and high distortion of power from a wall sockets. California has the highest costs for both outages and power quality disturbances of between $13.2 and $20.4 billion in total (not including rolling blackouts), followed by Texas at between $8.3 and $13.2 billion, and New York at $8 to $12.6 billion. CEIDS was launched this year as a collaborative research effort to develop the technologies needed to bolster and expand the current electricity infrastructure, and to create a new infrastructure to support the changing power demands of a digital society. CEIDS will evolve a portfolio of advanced technologies to improve the reliability and quality of power systems, increase options for consumers, and enhance the efficiency of digital devices. EPRI was formed in 1973 as a center for public interest energy and environmental research for electric utilities. “These findings underscore the increasing vulnerability of manufacturers and businesses to even slight disruptions in their power supply,” says Bruce Josten, executive vice president of the U.S. Chamber of Commerce and spokesman for the Alliance for Energy & Economic Growth. “With today’s high-tech economy, we can’t afford these costly failures.” The study adds credence to AEEC’s call for a comprehensive energy plan that addresses the modernization of the nation’s aging energy infrastructure. “We can’t exploit technological advances to grow our new economy with an energy grid and supply system that were built to serve the last century’s technologies,” adds Josten.