How the Energy Grid Works (Well, Most of the Time)

In an era of extreme weather brought about by climate change, we can and should expect hotter summers and more intense tropical storms. And as heat advisories and hurricane warnings mount, so do concerns about the power grid. Grid managers in states and regions around the country are seriously worried that as our seasonal weather patterns intensify, we’re much more likely to experience every grid manager’s greatest fear: intermittent blackouts and brownouts.

These outages, even those that last only for a short time, can have enormous consequences for public health and safety. We need a stable and secure electricity supply in order for society to function. But economic factors, aging infrastructure, poor grid planning, and climate change have turned this moment for the grid into a make-or-break one.

As we continue to transition away from fossil fuels and toward cleaner forms of electricity, it’s worth exploring all that goes into the structure and maintenance of this omnipresent yet sometimes easy-to-forget aspect of our daily lives. It’s also the perfect time to debunk some myths about what’s good—and not good—for the grid.

What is the grid, anyway?

If you’re not 100 percent sure what the grid is, venture outside and look around. The grid is pretty much everywhere that people are, and if you take a walk through your neighborhood, you’ll encounter some facet of it in the form of power lines, transformers, and mini substations. Actually, you don’t even have to go outside to find the grid: The electrical outlet on your wall is a tiny, yet indisputably crucial, component. Paradoxically, one reason that people may not know what the grid “looks” like is that its various parts are so commonplace that we tend to tune them out visually.

In the broadest sense, the grid is the vast, interconnected network of facilities and infrastructure that bring electricity from its origins (usually a power plant) into our daily lives. After being generated, electricity travels long distances over high-voltage transmission lines—those are the thick power lines that you see stretching between rows of tall towers—before being directed to local substations, where its voltage is lowered substantially and sent over the smaller distribution lines that transport it to wherever the electricity is put to use. According to the U.S. Energy Information Administration, the country has roughly 11,000 utility-scale electric power plants currently in operation. Connecting them to our homes, businesses, and other end points are hundreds of thousands of miles of transmission lines, and millions of miles of low-voltage distribution lines.

The first law of thermodynamics states that energy can neither be created nor destroyed, only converted from one form into another. That means that the electricity that powers everything from our electric cars to our toaster ovens starts out as another form of energy. Historically, most of the energy used to generate electricity has come from the burning of fossil fuels, especially coal and natural gas. But in the last few decades, as the evidence linking this activity to climate change has become irrefutable, other, cleaner sources of energy—including the sun and wind—have come to represent an ever-larger share of the portfolio that grid managers rely on in their daily operations.

How do grid managers choose their energy sources?

In most parts of the country, grid managers hold a daily auction in which utilities and power suppliers representing wind, solar, fracked gas, nuclear, coal, and other forms of energy place bids to sell their wares on the following day. The manager selects the lowest bids, adding enough together to satisfy the expected demand.

A generation ago, coal was the cheapest energy source and won these daily energy auctions handily. But times have changed. Today, natural gas is generally much cheaper than coal, and renewable energy—such as wind and solar—is cheaper still. That has made these daily auctions more competitive.

Many coal plants have been forced to shut down in the face of such competition; others have gone permanently offline as the result of decarbonization efforts by cities, states, and utilities in the fight against the climate crisis. But even the ones that remain have a strike against them. Whenever a supplier of coal energy loses one of these daily auctions, the coal plant must temporarily power down in order to save money. Powering back up again is costly and time-consuming. Even when demand for electricity is surging and grid managers require more power, it’s hard for coal plants to jump back online; they’re simply not made to be turned on and off and on again like that.

Put simply, coal has a short-term problem and a long-term problem. In the short term, it can’t compete with gas or nuclear in the day-ahead auctions, which means the plants have to be powered down too often to be profitable. And in the long term, as renewables become cheaper, solar and wind power are providing an ever-increasing share of our electricity needs. Neither bodes well for this fossil fuel.

But I thought coal protected the grid from blackouts and brownouts?

No—although the coal industry would love for you to think that it does. Those who push this idea tend to argue that since wind and solar generate energy intermittently, instead of on demand, they pose a threat to the ability to provide the amount of electricity needed to meet minimum, round-the-clock demand. If this so-called “baseload” can’t be assured, so the argument goes, brownouts and blackouts are much more likely. And since coal (and, more recently, nuclear) have historically been the go-to fuels for maintaining these minimum requirements, some would have you believe that it’s simply too risky to let variable sources of energy like wind and solar supplant this tried-and-true fossil fuel.

Whenever you hear this argument, what you’re really hearing is the coal industry’s desperate wish that we could all just go back in time to when America’s coal plants were online 24/7 (ignoring the fact that no generating resource is actually online 24/7), and when keeping the coal burning was seen as vital to ensuring that electricity needs were met. But in the hundred years since coal became our go-to electricity source, innovation and new technological developments have altered the way we manage the modern-day grid. It’s time for the industry (and their political allies) to accept that coal and nuclear are no longer the foundational energy sources propping up the grid and ensuring its reliability.

But why, then, is the grid still vulnerable to outages?

It’s true that coal’s decline has affected the grid; the system we currently have in place, while it’s changing, isn’t changing fast enough to match the many challenges posed by climate change and other stressors. Many states acknowledge that the retirement of so many coal plants at a faster-than-expected pace has caught them off guard, and are warning residents that their regional grids may not be able to meet the peak energy demands associated with summer heat or severe winter storms.

But to say we should restore coal to its former role is wrongheaded and backward-looking. It’s a bit like saying that we should stop manufacturing electric vehicles since most of the cars on the road today still run on gasoline. Meanwhile, a significant amount of wind and solar projects are waiting to connect to the grid—a process that has gotten longer and longer in recent years.

Our science and our policies should instead work to aggressively repair our aging grid infrastructure (as President Biden has proposed doing), installing new transmission lines that are capable of getting freshly generated wind and solar power to the cities and communities that need it, and working to reduce the greenhouse gas emissions that are altering the climate and leading to so many grid-stressing extreme weather events. As John Moore, a grid specialist in NRDC’s Climate & Clean Energy program puts it: We should be planning for the grid we need, not the grid we have.

In the meantime, what can we do right now to keep the grid stable?

A new report from NRDC highlights the importance of transitioning to a clean energy grid as soon as possible, while taking steps to ensure grid reliability in the process of doing so. Author Christy Walsh, a senior attorney in NRDC's Climate & Clean Energy program, notes that “in the short term, every utility should be expanding energy efficiency and rapid demand response programs to limit the risk of blackouts." Maximizing energy efficiency, it should go without saying, is the one measure that can be taken by everyone, from grid managers down to consumers, that will instantly reduce consumption and pressure on the grid. Rapid demand response programs provide financial incentives for consumers to reduce their electrical consumption during periods when the grid is likely to be under the most stress; such programs have already shown great success in utilities from California to New York.

Another way to improve the grid could be to stop the dynamic whereby utility companies—which are regulated by state governments but typically set the rates that they charge their customers—make more money simply by selling more energy. Instead, we should consider adopting performance-based regulation systems that reward utilities for improving the services they provide. Under such a system (which has already shown great promise in Hawai‘i), the state caps the amount of revenue that a utility can make from customer usage alone, which means that the utility has to find other ways of servicing its customers and increasing its revenues: broadening customers' access to energy efficiency upgrades, for example, or increasing the amount of renewable energy in its portfolio.

The challenge before us is clear. Moving to a grid fueled by clean energy is necessary if we’re to put up a fight against the climate crisis. But great care must be taken along the way to ensure that the power stays on for everyone. Fortunately, we can do both things at the same time.

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