Monday, September 7, 2009

Can a De-Industrialized USA Maintain the National Power Grid?

The following comment appeared on Karen De Coster's blog today.

Clark writes:

Hate to break it to everyone, but I work for a major power company back east.

We have NO SPARE parts for the major components of the distribution grid.

Back in the mid 90s, some genius at the IRS decided to tax us on our spares inventory as retail stock because we occasionally sold parts to other power companies. The solution to this that the bean counters came up with was to liquidate it all. Sent to the scrappers. Millions worth.

You won’t hear it from us, but the forecasted solar flare activity has everyone very worried.

The problem with our grid is that it isn’t the money spinner, generation is. Thus the distribution grid has been sorely neglected.

What happens when we have an electrical incident of sufficient strength at a substation (lightning will do it) is that the coils and breakers at the substation literally melt. Being large components that we don’t make here in the US anymore, it takes months to replace them. (forget the cans you see on the power poles, that’s a residential step down transformer…I’m talking about the big stuff, surrounded by fences)

Normally, it’s isolated and we just reroute the power around the down substation, but if it turns out to be several at the same time we have a major problem on our hands. (Upper Ohio 2003, entire counties were down for over 6 months)

On top of that, the entire cross national grid is routed through only 5 major switching stations. FIVE. Do you think that the sun, with all it’s power, isn’t capable of throwing a wrench in that situation?

Literally we’re talking 6 mos to a year for some of these components they’re so specialized. And if you have grid issues in the countries where they are made, well you can bet they’ll be getting themselves back up before they export the stuff to us….if they can even manufacture them without electricity of their own.

So, sit and think really, really hard about what your community (and the community down in the bad part of town) would look like without power for 6 months.

Above a certain level, taxation destroys capital (i.e., the tools needed to produce things, or the cash savings that enable a producer to buy these tools). America exceeded that level years ago, with the infamous result that hardly any goods are manufactured here. Until now, I hadn't considered the combined effect that offshoring/outsourcing and outrageous taxes might have on the energy industry. Spare parts inventories are capital goods, and taxing them gives power companies a perverse incentive to dump them.

1 comment:

  1. Last year would have been a good time to evaluate whether your abode is relatively near a generating plant. The closer you are to the sources of things we all take for granted in our modern lives, the less likely you are to suffer want. For example, here in Central Oklahoma, we have petroleum, refineries, natural gas, several electric generation plants, and plenty of water. We also have more than enough food production to feed ourselves. On the other hand, manufactured goods might be pretty tough to come by, until someone gets smart enough to start building more of those locally.