Energy Grid and Beyond

I woke up the other morning, stumbled into the kitchen and made myself a cappuccino. For some reason I was feeling particularly thankful that morning for all the things that have to come together to make my morning ritual possible. Carefully roasted, free trade coffee beans, clean filtered water, a roof over my head, a comfortable chair and electricity. I got focussed on electricity and started mentally following the energy supply chain up the wire from my coffee machine outlet all the way back at the originating power generator.

I know, sometimes it is not easy being in my head.

My colleagues and I spend a considerable amount of time discussing and writing about alternative and renewable energy. It seemed timely to step away from power generation for a moment, and take a look at how all the energy gets into our houses, and most importantly into my espresso machine. On the far upstream end, traditional energy networks start with large power generators: coal plants, hydroelectric dams, nuclear power plants, natural gas and oil generators.  Power generators are usually sited at a distance from where that power is consumed. No city wants to have these big noisy generators close to residential neighbourhoods.

From the generators the power is moved over high voltage transmission lines, to where it will be used. Before it can be used it is transformed down to lower voltages in a series of steps ending up at a nominal 220 Volts and 100-200 Amps at the meter to your house. With the exception of a few high voltage lines that use DC (direct current), all electrical grids use AC (alternating current). One feature of AC power is that the power fluctuates between +220V(rms - root mean squared) and -220V(rms) at 60 times per second (hertz). This means that any time a new power source is connected to the line it needs to match the phase angle (the position of the peaks and valleys of alternating voltage) that it is joining to prevent a disruption or degradation of the power.

Traditional utilities, in the 1950s,  were usually vertically integrated to a large degree: the same company owned the power generation, transmission lines, network grids, transformers all the way down to the house meter on the homes. The result was no competition in most cases, so all these utilities were effectively monopolies and had their rates and capital expansion regulated. Operations were largely done internally by the utility, with decisions on which power sources to use being largely a technical choice. Even if one utility exchanged power with another utility this was often a friendly arrangement between operators to help each other out.

Today this is often not the case. The industry is increasingly being deregulated with different companies owning and operating different entities in the energy supply chain.¹ Contracts cover the purchase and sale of energy between entities, and the utility often only holds contracts for the transportation of power. Increasingly environmental regulations must be met, like limited hydropower at times when salmon are spawning or water management for flooding and irrigation. Some jurisdictions require that renewable energy sources be used whenever they are available, even though they are at times highly variable. 

This organization that monitors and controls the operation of the grid. Besides the usual roles we think of an operator performing—like responding to alarms, managing outages both planned and unplanned, dealing with emergencies—one of the system operator's main roles is to balance the grid. To do that, the operator chooses which power sources are online and, in some cases, adjusts demand: shutting down transmission when a power line is damaged or shutting down parts of the system to maintain integrity (rolling blackouts). There is almost no way to “store” energy in a power grid, so the operator must continually ensure the grid is in balance, both physically and contractually.

Solar PV (photovoltaic) and wind power, the most common renewable energy sources, have their own constraints. Most obviously, the sun doesn’t shine at night and the wind doesn’t blow on command. Grid operators are often required by their regulators or governments to give priority to dispatching this power. This means that there need to be alternatives ready on short notice when the renewables power declines or goes offline. Many of these renewable energy sources are concentrated by location—large solar and wind “farms”—mimicking the design of legacy power grids. 

Considerable work is done by utilities to make this grid reliable. Often the only headlines a utility gets are negative, having to do with large power outages. These outages are usually caused by weather events that damage such facilities as transmission and distribution lines. While overall reliability is very good³ an outage can be dangerous, especially if the outage is prolonged. Some outages become an immediate emergency when heat goes out in cold weather or cooling in hot weather. Financial impacts occur for industries like agriculture, food storage, aluminum casting...really anything without a local backup. Still nowhere will you see a headline saying that all the coffee machines in LA had power this morning for that first cup of Java.

Most large solar and wind power is generated by large “farms” of windmills and solar panels that are connected to high power lines and dispatched like legacy power plants. In “developing” nations, small remote islands, and isolated communities, the cost of duplicating the power grid of a developed nation is onerous and often out of reach. They often have diesel power plants to serve communities, and the diesel is transported by truck and ship to these locations. Reliability is highly variable for many of these locations. 

Maybe there is a better way for developing nations.

Consider the example of telephone communications. Developed nations all installed phone lines—what we call land lines—to every house and business. This was done over a number of years at a significant cost, and resulted in large telephone utilities to install and operate this network. About the time the developing countries in South America and parts of Africa were getting ready to provide communication in their countries, the cellular telephone and network arrived. Cellular networks enabled these countries to avoid the expense of building a land line network, instead providing voice communication through cell towers, avoiding the large cost of provisioning land lines.⁴ Today, in the developed world, increasing segments of the population use cell phones and forgo the land line that is already installed in their house. 

What if the same thing could happen for energy?

Since the advent of solar  panels, people have installed them on their dwellings and properties. Initially, the cost of solar panels was very high: in the beginning only early adopters or environmentalists looking for a clean power alternative installed them. As costs came down and more installations occurred, utilities sometimes grudgingly began offering “net metering” that enabled these owners to “sell” back to the grid and be paid for unused electrical power generated by PV arrays on homes. This technology prompted more people to install solar power on their homes⁵. Better for the climate to have home owners with solar panels and today the operating costs often breakeven with the cost of buying electricity from the utility. 

In the developing world where significant power grids have not yet been installed, the decision to install smaller, more distributed power seems straightforward. Individuals and communities can make the decisions and the investment, and much like the telephone example, can leapfrog the traditional energy infrastructure installations. While making individual household grid-tied PV is a relatively easy decision where the connection will be a reliable power grid, without a grid, a PV+Storage system with more-sophisticated controls is required. 

When a house with PV panels is grid-tied with a local inverter and the grid has a power outage, the home will also lose power, even though it has PV panels and an inverter. Part of the reason for this is the safety of the grid and utility workers. If the workers expect the grid to be de-energized due to the outage and some house inverters are still feeding power into the grid it create a safety hazard. The other reason the house loses power is because a standard inverter is unable to create a stable AC power grid for the house. A standard inverter relies on the utility grid for its AC power signal and phase, and normally just matches what the grid is doing. When there is no power grid, a more sophisticated type of inverter is required to generate and maintain a stable AC power grid for the house and needs storage to make that happen. This makes the house a power “island”. 

To create a community of houses where each home is an island to itself is expensive and unnecessary. A better answer for small remote communities is to create a microgrid. The US Department of Energy defines it:

What would this look like, if for example we consider a small remote community with a dozen dwellings?  PV panels would be installed on most houses, at least one house would have the PV + Storage system  inverter to create the AC network and the other houses could have a simpler inverter. The houses would be connected and maybe have additional power storage added to the network based on need. A control system would likely be added to make management easier and respond to unexpected conditions. Done.

Now the hypothetical remote community has reliable power, be resilient during most weather events, require no fuel deliveries, need very little operation and maintenance, and would have clean energy. This community would leapfrog all the costs of building large remote power plants, high voltage transmission lines, switching stations, and all the people and resources needed to make it work. 

And the micro-grid still passes the critical morning cappuccino test!

Reading

1. US EPA, OAR. “U.S. Electricity Grid & Markets.” Overviews and Factsheets, January 10, 2022. https://www.epa.gov/green-power-markets/us-electricity-grid-markets.
2. “About 60% of the U.S. Electric Power Supply Is Managed by RTOs - U.S. Energy Information Administration (EIA).” Accessed July 7, 2025. https://www.eia.gov/todayinenergy/detail.php?id=790.
3. “SAS Output.” Accessed July 7, 2025. https://www.eia.gov/electricity/annual/html/epa_11_01.html.
4. “Cell Phones in Africa: Communication Lifeline | Pew Research Center.” Accessed July 7, 2025. https://www.pewresearch.org/global/2015/04/15/cell-phones-in-africa-communication-lifeline/?utm_source=chatgpt.com.
5. “How Many Americans Have Solar Panels in 2024?,” February 3, 2024. https://www.solarinsure.com/how-many-americans-have-solar-panels.