Should We Rewire Our Strategy on Resilience?

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Electricity networks are strongly motivated to improve reliability by making sure electricity is delivered to customers. Regulators monitor and assess network performance for reliability, but recent articles suggest customers aren’t that interested in paying more for reliability because they can make electricity themselves now, so who needs a wire to connect them to the rest of the world?

The truth is, if they want to sell that self-made electricity or provide services to the system operator, they do need a wire. And inverter-connection standards typically prevent “islanding,” which means their own generation and storage devices will be offline and unavailable in a power cut, so they won’t provide a secure electricity supply when the network is down. 

But “stick and carrot” incentives, with rewards for good service and penalties for bad, deliver mixed results for reliability, with some networks failing to deliver improvements, even on a good day. And because bad days—typically the result of severe weather—are excluded from the monitoring of reliability performance, they don’t count when assessing reliability performance. Statistically, this is appropriate because every day reliability shouldn’t include events that are beyond the control of the network. But with the number of major event (bad) days increasing around the world along with cost, we’re essentially ignoring more and more bad days. And outages that occur on a bad day tend to last a long time and have many negative impacts on customers.

Resisting unforeseen events and recovering quickly is described as resilience, but regulators don’t focus on resilience. Targeted investments that reduce the risk of networks failing, such as automation and distributed intelligence, significantly improve reliability. However, investing only in reliability, which is the current approach promoted by regulators, does not deliver resilience.

In an economic environment where regulators limit network spending to protect customers from increasing electricity bills, we need to ensure every dollar spent is used efficiently. This includes ensuring investments include building resilience to deliver more robust networks that cannot only recover more quickly after major events, but also deliver increased reliability as well for both good and bad days. I’d be interested in learning your thoughts on this subject in the Comments section below.