Three keys to grid modernization: cost, collaboration and connectivity
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- Jun 22, 2020 11:15 pm GMTJun 22, 2020 11:07 pm GMT
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This item is part of the Special Issue - 06/2020 - Grid Modernization, click here for more
2019 was a hallmark year for grid modernization as 46 states and the District of Columbia undertook major actions to enhance the grid. Leading many of the efforts to promote renewable energy resources like wind and solar was Washington, D.C. With the passage of the CleanEnergy Omnibus Amendment Act of 2018, which advanced, among several initiatives, a 100% Renewable Portfolio Standards goal by 2032, the most ambitious timetable in the nation, and a robust clean energy and climate action plan, D.C. is taking action to encourage innovation, efficiency and resiliency of its grid.
In order to modernize the grid, we must have a vision of the future capabilities that an energy delivery system can offer — a system that is safe and reliable, secure, affordable, sustainable, interactive and nondiscriminatory. Still, after years of hard work, we strive to fulfill that vision. Where is the grid of the future? Where are the smart buildings and neighborhoods with rooftop solar, battery storage and electric vehicle chargers in every home?
To answer these questions, I turn to lessons learned from D.C.’s grid modernization stakeholder process, Power Path DC, the largest proceeding in the history of the Public Service Commission of the District of Columbia (DCPSC).
Cost: It’s still all about who pays and who benefits.
The current energy delivery system in D.C., which we’ve invested billions of dollars in, is safe, reliable and affordable. So, as regulators, we need to work extra hard to sell the benefits of grid modernization to consumers and advocates.
We do this by balancing the risk versus benefit. It’s obvious to me that the scale does not clearly tip in either direction, at least not in the United States. To change that reality, we need to better educate consumers about the drivers and the benefits for smart grid investment (e.g., clean energy, climate change) and how it will directly improve their lives and the lives of the next generation.
One method we’re considering at the DCPSC is price signals that empower customers to make sound decisions about their energy usage. Dynamic pricing and time-of-use rates can help reduce peak load and provide cost savings to customers. Still, if we can’t do this affordably and equitably, we won’t be able to do it successfully.
Collaboration: We need a coordinated effort across regulated industries.
Utility regulation, building codes and standards, transportation, and telecommunications are just a few of the industries that must work together in order to modernize the grid. Imagine a shift from a closed, predictable energy network that is owned and operated by a single entity, to an open, multi-owner, decentralized network. This will require a wholesale change in the way we approach critical infrastructure, especially in large metropolitan areas.
Specifically, innovations for Integrated Distribution Plans (for restructured states) and Integrated Resource Plans (for the vertically integrated states) will come into play to reach a least-cost result, combining demand and supply side solutions in a most cost-effective manner.
No single regulatory body can manage this lift alone. Public-private partnerships will also play a key role in this coordinated effort.
Connectivity: Technology is changing the relationship between utilities and customers.
Two out of three customers say that they want some percentage of their electricity to come from renewable resources. Regulators can facilitate customer choice through enhanced supplier competition, small generator interconnection and net metering tariffs.
Regulators can also leverage that support for near-term smart grid investments, like pilot projects, with minimal costs to end-users. In the long-term, however, the cost curve will grow steeper as we invest in technologies like 5G and IoT to support distributed energy resources. That assumes we can simultaneously address questions regarding physical and cybersecurity, resilience and reliability on an economy-wide scale. Having a national roadmap to achieve these goals is necessary, however.
Through a collaborative approach — engaging customers, utilities and stakeholders — aided by advanced metering infrastructure data, cloud computing, artificial intelligence and advanced home and building management, a new era of grid modernization is on the horizon.
States can and should experiment with grid modernization, but, if we’re being honest, it’ll take courage from all three branches of the federal government as well as the business community to achieve a modern national grid. Still, this won’t happen overnight. And it’ll be further complicated by the COVID-19 pandemic and recovery.