‘Perfect Storm’ Knocks Out Power Grid in Melbourne Australia

You could view yesterday’s blackouts in Melbourne, Australia as a “perfect storm” of sorts. Soaring temperatures led to a spike in demand in the afternoon hours. Then, a critical transmission between New South Wales and Victoria failed, cutting off twenty five percent of the state’s power. At the Australian Open, Maria Sharapova nearly overheated and was forced to take an ice bath.

But is this blackout (which is still affecting quite a few people as we write) a one-off confluence of high-temperatures and a freak break-down in the transmission grid? Is it just a minor inconvenience which forces us to remember what we did with our free time before the Internet? Maybe.

But it also indicates the key structural vulnerability of the grid itself: the fragility of the connections. Any network without sufficient nodes is subject to breakdown. The fewer the connections, the more likely that the loss of one puts stress on those that remain, degrading the performance and the efficiency of the whole system. It’s a little like having only one bridge to get across a river. No bridge, you either swim, or you stay stranded.

More nodes and more connections means greater redundancy, which doesn’t mean quite the same thing in this context as it does in the boot-making business. More on that in a moment. But back to the grid.

Centrally generated and distributed power is the way our world is built, and when it works, you hardly ever give it a second thought. The most thought we’ve given to it is how strange it is that the plane trees on Fitzroy Street are trimmed just so in order to make room for the power lines traveling above them. Why not bury the lines and let the trees grow to the sky? Then, at least falling branches don’t plunge the city into darkness.

But we are concerned with more than just esthetics. We are concerned with whether the grid works. The network is only as good as the reliability of the transmission system, the grid. Generally, the grid holds up. It’s a spike in energy demand that strains the grid, or growth for which the grid wasn’t designed.

In twenty years, when Melbourne has added another million people and Australia itself has a larger population with energy-intensive industrial companies, will the nation’s existing grid be enough? Oh wait, there is no existing national grid, now way to ship power safely and reliably from one state to the next. At least not yet. Wouldn’t it be nice to have some back up to a system not designed for the worst-case scenario?

We are leading the witness a bit, to be honest. There isn’t a locally generated, safe, power system to replace the centrally-generated grid power we (most of us) enjoy today. But there are back-up systems commercially available that give individual households and businesses another source of power should the electricity grid fail. They are becoming more popular in Europe, where dependency on ageing power grid is even more acute.

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Dan Denning

Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.

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