Saturday, September 29, 2007

Electric Infrastructure

This chart shows the residential electricity sales per month per person. In addition to the electricity needs of a growing population, it is clear that we're also growing our electricity needs individually. This represents roughly a 1.6% average annual increase (0.13% per month).

Transforming the Electric Infrastructure
The power delivery system is largely based on technology developed in the 1950s or earlier and installed as much as 50 years ago. The strain on this aging system is beginning to show, particularly as consumers ask it to do things it was not designed to do.

In the 1990s, capital expenditures of the US electricity sector were about 12% of total revenues. That life− support level of investment, about half the historic average, was previously approached only during the depths of the Great Depression and World War II, times when private investment was generally very low. Such low levels of investment are dangerous and unacceptable. Moreover, a large share of the investment during the 1990s was in power generation rather than improvements in the power−delivery infrastructure. That period of low investment saw the economic cost of power disturbances, from minor blips to major outages, grow to roughly $100 billion per year in the US, according to an EPRI survey of key industries. In other words, for every dollar spent on electricity, consumers are spending at least 50 cents on other goods and services to cover the costs of power failures.

Source Data:
Energy Information Administration: Electricity
St. Louis Fed: Population Data


Anonymous said...

a poster on the fnm board at had posted a bit ago about the grid and to keep electricity infrastructure as investment opportunities in mind. Your article is a good reminder.

Stagflationary Mark said...

I'm reminded of a series on TV a long time ago about how they paid people to walk around New York with listening devices to listen for leaking water.

Search for "bridge rebar exposed" and be amazed.
In this portion of the main pier, the rebar is exposed.

New York
"I find it more than a little scary that the average person living in my area is so used to seeing corroded rebar easily visible in most concrete bridges, that he/she might think it is supposed to be there!" - a civil engineer from Syracuse, NY

We tend to take our infrastructure for granted, perhaps too much so.