SOURCE: OPTIMAL TECHNOLOGIES INTERNATIONAL INC.

August 14, 2008 14:56 ET

The Power Grid Five Years Later: What's Changed Since the 2003 Blackout?

Green Energy Company Optimal Technologies Releases List of the Top Ten Changes Needed to Prevent and Eliminate Blackouts

RALEIGH, NC--(Marketwire - August 14, 2008) - Five years ago, on August 14, 2003, the worst blackout in North American history swept across the Northeast. Fifty million people in eight U.S. states and Ontario, Canada were left in the dark, some for as long as four days. Flights were cancelled, stranding travelers. Hospitals filled with heat-sick patients, some of whom died before paramedics could reach them. The estimated financial cost of this entirely preventable disaster: $4 to $10 billion.

What has changed since then? The answer: not nearly enough. Today, most of the world depends on the same faulty, aging electrical systems that threw the Northeast into chaos all too easily five years ago.

"The question is not if there will be another blackout of the same or larger scale as the one we experienced five years ago, it is when it will occur," says Roland Schoettle, CEO and founder of Optimal Technologies International, Inc., a Raleigh, N.C.-based green technology company.

To mark the five-year anniversary, Optimal Technologies, which has been studying this and other power grid problems for more than a decade, has put together a top ten list of the urgent changes that can and need to be enacted now to prevent another disastrous large-scale blackout.

1. Act locally: Most electricity today is generated by huge power plants that are located hundreds or even thousands of miles away from the homes and businesses they serve. The best insurance against widespread blackouts and power failures is to go back to Thomas Edison's original vision -- install multiple smaller generators all across the system at key points where they can be most effective, also enabling and encouraging far wider use of renewable energy sources.

2. Reduce wasted resources: It's no coincidence that most blackouts happen in the summertime. Rather than simply placing the entire burden of conserving energy on consumers, there is another way -- using advanced technology to manage and optimize electrical usage. By taking existing resources on the electrical grid and ensuring they're properly deployed, we reduce waste and the potential for blackouts.

3. Install more stable and effective operating systems to manage the grid: One key cause of the 2003 blackout was that when some parts of the system failed, no one was aware of it. Even worse, the tools put in place to analyze the "what ifs" of the system were not able to do their job properly, because they didn't have an accurate picture of the current state of the grid. The obvious solution should be to install more robust and effective tools that can accurately report what is happening on all parts of the grid.

4. Prepare for both short- and long-term needs: The very conservative electric power industry has for many years used a variety of mathematical analysis models, tools and paradigms to try solving the long-term planning and short-term operational problems of its transmission and distribution systems. These analysis paradigms have their distinct shortcomings -- blunt answers are possible, but accurate, optimized answers typically are not. From a business and society standpoint, these shortcomings are unforgivable. The most prominent and common flaws for all existing grid solutions are:

--  They are slow, most often too slow to provide any significant
    clarity to other possible planning and operating scenarios;
--  They typically don't produce a defendable ranked list of critical
    options to put into action to prevent disaster; and,
--  They are inconsistent, often generating different solutions for the
    same problem under a variety of scenarios, such as different user
    or starting point.

5. Increase visibility to small points of generation and renewable sources: Existing analytical and planning tools most often cannot "see" small distributed energy resources. This includes small solar and wind generators among other renewable resources. Today, society puts much attention on renewable energy sources; however, the system currently cannot easily incorporate renewable and small-scale energy efficiency into daily operations.

6. Empower customers: Utilities need to start treating customers as partners, providing them with more information about how they are affecting the grid. For their part, customers can become more informed and engaged, viewing themselves as part of the solution and finding ways to improve the grid's reliability, either through increased efficiency, technology or other means.

7. Change the incentives for utility companies: As the chain of events that led to the 2003 disaster began to unfold, MISO requested that utility companies scale back the amount of electricity it was putting into the system. Instead, at least one utility did the opposite -- on the advice of its marketing department it pushed more power into the lines. We cannot afford this type of incentivizing of electric companies.

8. Use 21st century technology to run today's complex grid: Our elevators and iPods, security systems and supercomputers all depend on one energy source: electricity. Yet the technology to run the grid hasn't been notably upgraded since Ford built the Pinto. It's only too easy for one part of the system to fail, leaving the other parts vulnerable without anyone's knowledge. This is, of course, exactly what happened in 2003.

9. Encourage innovation in the electrical industry: Unfortunately, and somewhat ironically, the electrical industry is one of the most risk-averse in the world. Yet, without innovation we are all at risk. Instead of trying to resolve its technical shortcomings, the industry, due to its unique protected nature, has learned to live with and has developed a number of very costly workarounds to make its problems tolerable. The impacts of staying inefficient are enormous from so many perspectives that mentioning only greenhouse gases, poor power quality for modern electronics, and the obvious matter of financial cost really don't do justice to the scale of the problem.

10. Plan ahead: The cascading failures that unfolded during the blackout blindsided operators, who had not predicted such a convergence of factors on that fateful day. Better modeling tools and processes can be of tremendous help in predicting what failures may occur and how they can be prevented and fixed. Such tools need to be put into place before it's too late.

"Let's face it, the grid needs a new brain to run its operational body," said Schoettle. "Without it, the grid isn't much better than a scarecrow."

The advice from experts closely monitoring the situation is that what's desperately needed -- and is highly attainable -- to prevent another disaster like the 2003 blackout is to focus on the root causes and seek fresh solutions. The transmission and distribution of electricity on the nation's grid must rest on robust, efficient, "smart" systems.

"A blackout-free future is within our grasp," said Winston Hickox, former Secretary of the California Environmental Protection Agency. "Such change could be realized without installing new power lines, building new power plants, or any other such major investments. Rather, what we must demand is visionary thinking and a willingness to explore new technologies that ensure the safety and efficiency of our electrical grid."

For further commentary and insight on these important and timely issues, please contact LaunchSquad at 415-625-8555 or otii(at)launchsquad(dot)com to arrange an interview with Optimal Technologies CEO Roland Schoettle.

About Optimal Technologies

Optimal Technologies develops solutions to help power utilities, businesses and consumers maximize their energy efficiency and minimize their carbon footprint. The company's mission is to enable a more efficient, reliable and environmentally responsible electric power grid. Optimal's unique products and services have the potential to create unprecedented industry, economic, environmental and consumer benefits worldwide. Optimal is a privately held company financed by Goldman Sachs International.

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