Grid Modernization

Beacon Energy LLC

Optimal grid modernization will lower costs for customers while obtaining higher reliability and better security. According to Mercom Capital Group, private equity and related investments in smart grid companies increased 300 % to $164 million in the first quarter of 2017. However, individual firms and even individual states or power pools lack the common national standards necessary to fully advance a modernized grid. In mid-April 2017, the U.S. Department of Energy (DOE) provided a peer review session on its activities to improve the grid. During the same month, the Solar Energy Industries Association began a series of white papers on the benefits of grid modernization.

Similarly, California and New York regulatory commissions have also been reviewing plans to add rate-based distributed energy resources (“DER”) grid relat-ed improvements. Designing the most efficient structures, devices and approaches for incorporating new DERs to benefit all stakeholders is key.

DOE established the Grid Modernization Initiative in June 2014 to update the grid to accommodate profound changes occurring with distributed energy technologies including solar, storage, other energy resources, and energy management systems and to improve handling cyber and physical threats to reliability. These efforts were aimed at augmenting efficient central station units and allowing electric customers to benefit from major cost reductions in solar, wind, distributed natural gas plants, demand response, distributed management systems, and storage.

In coordination with 100 + industry partners and 13 US Government labs, DOE formulated key programs and activities in 2015 and 2016 that are required to modernize the grid.

During the last month, DOE also conducted a peer review of 88 programs with potential funding of $220 million, designed to make changes in six key areas.

Central to improvements in the grid are:

• The design and collection of distri-bution level data (voltage, operating state, temperatures, etc.) including design architecture that facilitates the manage-ment, collection and standardization of information.

The communication of real time information providing potentially 100 % visibility into what is happening at both the local and broader grid level is critical.

• A method of controlling a modern-ized grid that facilitates self-healing in real time, reducing unintended loop flows and resulting in lower costs.

• A system of planning that recognizes the grid’s capacity to accept new distributed resources, the value of these resources at their point of location, and new ways to plan for these resources.

• A robust discussion and final agreement on incentives needed by utilities and others to keep stakeholders properly motivated while insuring lower costs and higher reliability/resilience and flexibility for customers.

The DOE programs targeted six key areas (with selected 2020 DOE goals):

Devices and Integrated Systems. Help develop new devices to improve grid utilization to facilitate new distributed resources as well as efficient central station units. Four key activities and goals are to be reached by 2020, including one target achievement of new systems that integrate 100 % renewables at the local level and 35% at the bulk level.

Sensing and Measurement. Advance low cost sensors, as well as information and communication technologies needed to properly characterize the grid, with the goal of 100 % observability of data. By 2020, progress six activities needed for the proper characterization of the grid.

System Operations, Power Flow, and Control. Design a new architecture that enables millions of new devices to be efficiently integrated into the grid. By 2020, create a next-generation grid operating system that functions like an autopilot reducing necessary reserve margins and improving economics and efficiencies.

Design and Planning Tools. Create grid planning tools that dynamically model the new grid at the transmission and distribution levels. By 2020, integrate distribution system dynamics into stochastic modeling and increase nodes modelled by a factor of 100.

Security and Resilience. Develop hardened and resilient cyber and physical security solutions and real time response to threats. By 2020, improve the grid’s ability to detect, respond, and anticipate threats.

Institutional Support. Provide technical support to regulators and others to facilitate proper incentives to maximize benefits of the new grid and insure a sound regulatory framework. By 2020, assist 20 states in their evaluations of potential changes.

The DOE is well positioned to develop the modern grid by advancing national issues outside of state and power pool boundaries.