Electrical demand in the future through the eyes of the tragedy of the commons problem Tragedy of the Commons as a Social trap • The Tragedy of the Commons is a type of social trap, often economic, that involves a conflict over resources between individual interests and the common good • Social trap is a term used by psychologists to describe a situation in which a group of people act to obtain short- term individual gains, which in the long run leads to a loss for the group as a whole • Examples of social traps include the over harvesting of fish species by commercial and sport fishers, the near- extinction of the American bison, the overgrazing of cattle, the destruction of the rainforest by logging interests, and energy "blackout" power outages during periods of extreme temperatures How Electric Power Works • The blackout on August 14, 2003 was the biggest in U.S. history. It raised a lot of questions about how our power distribution system works • At a high level, a power grid simply consists of a set of large power plants (hydropower, coal, nuclear power plants) all connected together by wires. One grid can be as big as half of the United States • A grid works very well as a power distribution system because it allows a lot of sharing. If a power company needs to take a power plant or a transmission tower off line for maintenance, the other parts of the grid can pick up the slack The Problem (How Stuff Works) • The one remarkable feature of electric power is that it cannot store any power anywhere in the system • At any moment, you have millions of customers consuming megawatts of power. At that same moment you have dozens of power plants producing exactly the right amount of power to satisfy all of that demand • Supply = Demand at all times • Unfortunately, there will be times, particularly when there is high demand, when the entire system is vulnerable to collapse • Suppose the grid is running close to its maximum capacity • Something causes a power plant to suddenly trip off line (lightening strike, fire in a generator) • When that plant disconnects from the grid, the other plants connected to it have to spin up to meet the demand • If they are all near their maximum capacity, then they cannot handle the extra load • To prevent themselves from overloading and failing, they will disconnect from the grid as well • That only makes the problem worse, and other plants also will disconnect. Blackout! Tragedy of the Commons in Electric Power • One solution to the problem would be to build significant amounts of excess capacity -- extra power plants, extra transmission lines, etc. By having extra capacity, it would be able to pick up the load at the moment that something else failed. • That approach would work, but it would increase our power bills. At this moment we have made the choice as a society to save the money and live with the risk of blackouts. Once we get tired of blackouts and the disruption they cause, we will make a different choice. • Therefore the short-term individual gain is to save money on our power bills, but this is at the expense of a long-run loss to everyone by not making investments in a power grid everyone uses • Also, during periods of high demand, people still tend to over consume electricity gaining short run advantage but the disadvantage of increased risk of outage is share by everyone Research future • It has been argued in physics literature on the basis of historical data and computer modeling that power grids are self-organized critical systems (SOC) • This is a class of dynamic, non-equilibrium systems that exhibits unavoidable disturbances of all sizes, up to the size of the entire system, and attempts to reduce the probability of small disturbances only increase the probability of large ones • This has immediate policy implications: • How do we optimize the amount of blackout risk given the costs of engineering upgrades to the infrastructure? • How do we handle new increased demands on electricity (plug-in-hybrids) without a crisis? • How has deregulation and spot markets affected the power grid? (indications that deregulated electricity costs more) • Research technological externalities associated with transmission congestion and transmission loss. • What about adopting tradable transmission capacity rights?