Technology Corridor

Reliability demands will drive automation investments.

In the days and weeks following Aug. 14, 2003, politicians scrambled to assess blame for the blackouts that plagued the United States and Canada.

Even today, as the blame game proceeds, the precise cause of the grid's collapse remains uncertain. But Republicans, Democrats, and the utility industry alike seem to agree on one thing: the U.S. power grid needs major investment.

"We need between $50 billion and $100 billion over several years to upgrade the nation's transmission system," said Kurt Yeager, president and CEO of the Electric Power Research Institute (EPRI) in Palo Alto, Calif.

Despite pressures to enhance grid reliability, mobilizing $50 billion to $100 billion for transmission system investment seems like a Herculean task. Faced with regulatory uncertainty and economic malaise, utilities are not well positioned to make such colossal infrastructure investments.

"I suspect I'll have a lot of questions from our clients, saying, 'They want us to invest money in technology to increase reliability, but nobody is giving us the money to do it,'" says Jill Feblowitz, research director with Boston-based AMR Research.

Policy questions aside, the big challenge for the industry in the coming months and years will be figuring out how to improve grid reliability and survivability-without accumulating a Herculean tab.

Smart Grid

Weaknesses in the power grid can be narrowed to two general areas-transmission capacity and network control systems. Both of these areas will likely see increased investment in the years to come, but the precise focus of such investments remains to be determined.