Eight electric power and energy companies have agreed to create a national stockpile of spare transformers and other essential grid equipment that could be deployed to help parts of the high-voltage transmission network recover from cyber and physical attacks, extreme weather and other natural disasters.
Affiliates of American Electric Power Company Inc., Berkshire Hathaway Energy Co., Duke Energy Corp., Edison International, Eversource Energy, Exelon Corp., Great Plains Energy Inc. and Southern Co. said they plan to launch the independent organization, called Grid Assurance, next year. Other utilities will be invited to join, said AEP communications director Melissa McHenry.
Grid Assurance would purchase large, mobile transformers, circuit breakers and other equipment and maintain them at secured strategic locations in the United States. Utilities joining the program would pay a subscriber fee for storing and maintaining the stockpile and then pay a cost-based price for any equipment they need, the sponsors said.
The companies said they are responding to growing concerns about the vulnerability of the U.S. high-voltage grid to a spectrum of dangers, natural and man-made, and particularly the risk that losses of hard-to-replace high-voltage transformers could cause devastating, extended blackouts.
The Federal Energy Regulatory Commission has ordered rulemaking to protect transmission networks against physical and cyber attacks and geomagnetic pulses from massive solar flares.
The Department of Energy highlighted the importance of a transformer stockpile in its Quadrennial Energy Review issued in April. DOE's report said, "Despite expanded efforts by industry and Federal regulators, current programs to address the vulnerability [of large transformers] may not be adequate" if catastrophic events should take down multiple units.
And a group of House members belonging to the Grid Innovation Caucus, led by Reps. Renee Ellmers (R-N.C.), and Jerry McNerney (D-Calif.), are supporting a measure (H.R. 2244) that would direct the Energy secretary to send Congress a plan for a strategic transformer reserve, with proposals for funding it. The bill was included in a draft energy legislation released by the House Energy and Commerce Committee last month, and supporters are hopeful about its prospects.
On behalf of Grid Assurance, attorneys for AEP have petitioned FERC for a declaratory order acknowledging the benefits of a spare equipment service that would meet requirements of FERC's grid physical security regulations. The petition also asks FERC to agree that purchases and sales of spare equipment by Grid Assurance would not require FERC's prior authorization.
The attorneys said that widespread participation by power companies is key to the program's success. "Regulatory certainty is critically important for the prospective subscribers of Grid Assurance," many of them expected to be FERC-regulated utilities.
The Grid Assurance attorneys quoted a report by the Congressional Research Service noting that, "at $3 million to $5 million per unit or more, maintaining large inventories of spare HV [high-voltage] transformers solely as emergency replacements is prohibitively costly, so limited extras are on hand."
Protecting against 'high-impact, low-frequency' threats
A transformer stockpile program would add to a lengthening list of expected long-term grid investments for new generation and power lines, smart grid technologies, distributed energy, cybersecurity and physical defenses -- all requiring a balancing of higher electricity costs against the economic consequences of grid vulnerability.
The Grid Assurance petition said that an emergency stockpile of mobile transformers is the best way to deal with "high-impact, low-frequency" threats such as a once-in-century solar storm that could unleash damaging rogue currents across the grid.
The most likely effect of solar-induced ground currents has been debated. An unpredictable solar storm could hit Earth with only a day's warning and, if it knocked out a large number of transformers, could cause economic damages of more than $2 trillion and cause disruptions lasting up to two years, according to a Lloyd's of London report.
Following the attacks on Sept. 11, 2001, the Edison Electric Institute created the Spare Transformer Equipment Program (STEP), a stockpile of transformers that utilities could call on following a presidential emergency declaration following a terrorist attack.
Grid Assurance attorneys said the program would complement "but be significantly broader" than the STEP program.
'Logistics and availability' are key
The availability of spare transformers has a lot to do with their size and role in grid operations, said Craig Stiegemeier, transformer technology director for ABB in North America, a leading manufacturer of large transformers, which has much at stake if an expanded transformer stockpile program is created.
"All major utilities have mobile transformers, but they are typically on the distribution side," he added, not on the high-voltage interstate grid. There are no publicly available numbers on the numbers of spare, mobile large transformers, "but there are very, very few," Stiegemeier said in an interview.
"The important thing here is the logistics and the availability," he added. Most spare large transformers are stored alongside working transformers and could be damaged by the same catastrophes that took down the working units, he said. If spares were required today, they would have to be disassembled, shipped with critical parts, and then put back together at new sites and energized, a process that could take three weeks, Stiegemeier said.
ABB is promoting models of a portable transformer that can be moved in sections over highways, with replacement in as little as a week.
ABB advocates a five-pronged approach, in line with FERC's requirements, Stiegemeier said. Grid companies would assess the vulnerability of their transmission substations and transformers; develop ways of hardening the sites and shielding transformers; improve monitoring of substations to detect attacks or damage; and create rapid response teams to make repairs if possible, and if not, a spare transformer program.
Delta Star, a U.S. transformer manufacturer, says it is drawing up plans for a large mobile unit that would deliver 345 kilovolts -- a common size in the high-voltage grid.
"We know we have some technology to do that," said Steve Newman, a Delta Star vice president based at its Lynchburg, Va., production facility, in an interview. "We have indicated to a number of customers we think we are prepared to do that."