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Grid Modernization: Opportunity or Necessity?

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Grid modernization priorities vary widely around the country and, indeed, the world. Utility stakeholders have differing concerns and goals in every region. How would you order the importance of the key traits listed below? More importantly, how would you select the best course of action and communicate it to others?

Traits of a Modern Grid (US Department of Energy 2017)

  • Resiliency
  • Reliability
  • Security
  • Affordability
  • Flexibility
  • Sustainability

Is grid modernization an electric industry opportunity or a necessity? Your answer may reveal something about what motivates you.

Author and motivational speaker Tony Robbins taught in one of his seminars that a person's motivation often stems from their tendency to either embrace opportunities or to require necessity before taking action.

I am an opportunity person—tell me what we might accomplish together, and I am all ears. On the other hand, my son is much more necessity minded.

To me, Sunday evening seemed an opportune time for him to complete his chore before dark. I would tell him, "Son, this is a good time to put the trash cans out." His predictable response revealed his necessity-based mind-set: "Do I have to?"

I learned to communicate with him in his preferred style: "Yes, you do!" To me, it felt forceful. But, if he had to do it, it made perfect sense to him. "OK, Dad."

Is grid modernization an opportunity to improve, or something we must do? Just like people's motivation, it is not an either/or choice but a balance between the two extremes. It includes elements of both standpoints.

Thinking about grid choices in this way may clarify your view and, more importantly, help you see them from another perspective. Utility professionals must also clearly communicate grid choices to stakeholders. The benefits, impacts, and rationale must make sense to others who may see the world a little differently.

To select the best course of action, it is essential to appreciate that the grid is spatial—the question of where applies to almost every modernization objective. Spatial analysis is required to fine-tune the sustainable grid of the future.

It is essential to be able to evaluate the where of modernization options in terms of opportunity and necessity:

  • Where is the potential distributed energy resource (DER) hosting capacity?
  • Where do we need flexible services?
  • Where will electric vehicles require charging?

Where are the system risks in extreme weather events?

Spatial questions like where can only be addressed with GIS. The ArcGIS platform gives all users live, colorful visualization of the often overwhelming data to consider. It is part of a strategic investment in new capabilities to support the best grid opportunities and necessities.

Some people will readily embrace the amazing opportunities. However, just like my son putting the trash out on Sunday evening, some people will hold out for clear necessity—until they see why we have to transform the electric grid!

For more information on how ArcGIS helps utilities clearly evaluate and communicate grid modernization choices, download our free e-book.

Pat  Hohl's picture

Thank Pat for the Post!

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Matt Chester's picture
Matt Chester on Oct 8, 2019 1:20 pm GMT

Is grid modernization an opportunity to improve, or something we must do? Just like people's motivation, it is not an either/or choice but a balance between the two extremes. It includes elements of both standpoints.

I like this a lot. Is it mandatory? Well no, the grid has been working pretty well for many years and we could theoretically continue down that path. That said, technology progresses and that's more or less inevitable. So as technology attached to the grid evolves, customer needs likewise evolve and eventually it becomes necessary for the grid to do so as well. That means the question turns into: does grid modernization want to play catch up or is it better to get out ahead of the curve? The answer to that is pretty obvious

Pat  Hohl's picture
Pat Hohl on Oct 8, 2019 9:23 pm GMT

Matt, it looks like you're an opportunity person too. I appreciate the comment!

Richard Brooks's picture
Richard Brooks on Oct 8, 2019 1:32 pm GMT

IMO spatial analysis, especially the ability to perform what-if analysis is becoming more important as we experience more severe weather events. Places like Houston, Texas have experienced two severe flooding events in two years, when they went years without any serious flooding. Spatial analysis gives utilities the ability to foresee the potential impact of future events, such as severe floods, by identifying what facilities are most at risk, what segments of the population may experience outages and taking preventative action to mitigate these risks.

Pat  Hohl's picture
Pat Hohl on Oct 8, 2019 9:18 pm GMT

Well said!

Doug Houseman's picture
Doug Houseman on Oct 9, 2019 12:34 pm GMT

Grid Modernization (at least the strong part) is no longer an opportunity. The recent Amazon announcement of 100,000 local delivery vehicles by 2025 and the Post Office's plan to replace 850,000 postal vans with (most likely) electric vehicles should give solid meaning to electrification of transportation. Add GM's commitment to 22 models of EVs and Fords recent investment in an EV manufactuer and it points to accelaration of EVs. 

So what you say?

At approximately 20% of residences having EVs, any 5KV class circuit and its supporting substation exceed emergency rating most nights of the year, based on a typical design. Not for 15 or 30 minutes but for 3 to 8 hours a night. 

So what you say?

Well as we have seen in SMUG (thank you for the wonderful presentations on EVs SMUD!) EVs tend to cluster in a neighborhood, they are not like creamy peanut butter but more like cold chunky peanut butter. And households that have 1 EV, are more likely to buy a second, third and even a forth - based on data from state departments of motor vehicle records. 

It wil not be a "big bang" because there are limits to vehicle production in the US, but in June the Tesla Model 3 was the 6th best selling car in the US. The Ford F150 is the best selling "car" overall - in 2 years it will come with an electric model. How long before that electric F150 starts showing up in driveways? 

Having now modeled and simulated a couple hundred circuits, they are not ready for an EV onslaught. Cars can be built far more quickly than distribution circuits. Make decisions NOW on what you are going to do, and then make it Business As Usual for how to build, repair and re-build circuits (Hint: if you are still building new 5KV class infrastructure you are in trouble - even in rural areas {electric tractors anyone?]).

Gary Hilberg's picture
Gary Hilberg on Oct 9, 2019 3:35 pm GMT

Pat - good post.

Doug - I agree with you, in addition to EV's it appears that most renewable iniatives - transition of heating is another big one, are relying on electricity.  With the cost differential between distributed generation (now mainly in solar PV) and utility generation, the grid is going to be even more critical to all aspects of energy.  As a long time EV owner, the charge cycle is a large adder even to a home in a high Air Conditioning location like Texas.  We all assume that the local utility has the capacity to meet our individual needs all the way back up the supply chain.  I would suspect that they model expected demand and there will be significant choke points driven by EV's and other electrification efforts.  So investment is critical, and I suspect some sort of load management technology would add value to reduce peak demand. 

Jalaludin Hashim's picture
Jalaludin Hashim on Oct 21, 2019 4:06 pm GMT

Do you really have the elements to embark on such a move?

There seems to be a lot of necessary elements that you have to be aware of?

If, you could developed Variable High Power Resistance, which offer very high Resistance to the flow of current in the initial stage of contact operations, then the Resistance slowly move to zero value, then it would be of great help in the power distribution design. Regards.

Manisha Rane-Fondacaro's picture
Manisha Rane-Fondacaro on Nov 17, 2019 1:38 am GMT

We all agree that grid modernization is an expensive proposition. It is inevitable for sure, and I personally think the sooner the better. Better for the environment as this will allow for more renewable energy generation.

The frugal mindset would push to continue with status quo as long as possible, while the opportunists among us would like to get started right away. One way to bypass this debate is by raising the necessity – by articulating immediate tangible benefits (distributed generation ... profit making opportunity... cheaper electricity for all; global energy leadership), and environmental benefits (clean air… less respiratory illnesses, ergo lower medical bills).

I would present this as marketing strategy for expediting grid modernization than a choice between opportunity (at a cost) or necessity (because status quo is no longer an option).

Doug Houseman's picture
Doug Houseman on Nov 18, 2019 6:32 pm GMT

Sorry, electricity will not be cheaper. 

If you were on a system where when there is wind and sunlight you got power and when they did not appear, you had no power, then it would be cheaper.

But...the population expects 24/7 power. Some will get the hang of demand response and variable pricing and others will not. 

50% of the population can't afford their own generation. 25% move at least annually. 5% can't pay their energy bills and that ends up socialized to the people who can. 

It will take 20 years for most people to associate renewable generation with better health and cleaner air. So selling them on benefits they may never accept is hard. 

Yes, the grid needs to get stronger, the good news is if gird owners pick larger conductors and larger transformers, better poles, etc. and buy them in bulk, shutting off purchases of all but a couple of sizes, that the cost (even though it is larger) will go down [ it is way cheaper to by 137 miles of a conductor than to buy 1 mile of 137 conductors.]. 

Regulations have to change to allow building bigger and stronger - and most states are not willing to allow that kind of spending. Many countries as well avoid spending for capacity not immediately used. 

This is not just a technical issue, but a policy, regulation, public awareness, society issue that needs a champion that can put a public face on this. 

Pat  Hohl's picture
Pat Hohl on Nov 22, 2019 12:55 am GMT

Well said Doug! 

Manisha Rane-Fondacaro's picture
Manisha Rane-Fondacaro on Dec 10, 2019 3:05 pm GMT

Thank you Doug, for your reply and for listing various the road blocks along the renewable energy path. I totally agree with you about this being a policy, regulation, public awareness, and societal issue that needs a champion. I strongly believe that the die is cast and change is around the corner, and all of us collectively will be the face of that champion who will bring the change.  Here are a few ideas to address your concerns…

50% of the population can't afford their own generation. 25% move at least annually. 5% can't pay their energy bills and that ends up socialized to the people who can. 

(1) Moving renewable energy generation from rooftops and neighborhoods to farmlands. 69% of all farms (livestock farms and agricultural land) operate on less than 10% profit margin. With 2,042,220 farms spread over 900,217,576 acres (per U.S. 2017 agricultural census data) or roughly 2/3 of the land area of contiguous United States, using even 1% of this land area for renewable energy installations would significantly increase renewable energy capacity and facilitate electrification of agricultural transportation, thereby resulting in agriculture related GHG emissions reduction, and aiding GDP by improving profitability of farming operations.

(2) Harvesting methane from landfills and wastewater treatment facilities for electricity generation. Instead of allowing methane generated from decay of organic waste matter at these facilities to escape and count towards GHG emissions, processing that waste in anaerobic digesters (where economically viable) to produce landfill gas (40% to 60% methane) for electricity generation. This reliable gas supply could be used to offset any intermittency of solar and wind energy (preferably) co-located on these sites. The collective output of landfill gas at these facilities would significantly reduce the natural gas used for power generation and reduce the waste footprint on the side.

Regulations have to change to allow building bigger and stronger - and most states are not willing to allow that kind of spending. Many countries as well avoid spending for capacity not immediately used. 

(3) Incentivizing renewable energy financiers to pay for grid modernization. Top renewable energy financiers predict a cumulative investment up to 1 trillion dollars between 2018 and 2030 in the U.S. under an infrastructure, and regulatory and policy supportive scenario. They also anticipate a slowdown in 2020 owing to aging grid infrastructure and mixed policy signals.

There is no dearth of money to pay for this venture, and it makes sense for individual States to ask renewable energy financiers to fund their grid modernization projects as they (financiers) stand to profit the most. The State too benefits from GDP growth through jobs creation in renewable energy sector and would need to train workforce for the same. It also makes sense for them to jointly develop renewable energy technology expansion roadmap addressing each other’s pain points in context of renewable portfolio standards, siting and permitting, carbon pricing, energy storage tax credits to name a few.

(4) Managing market signals by staying on the course of grid modernization. As far as market signals go, grid modernization (enabling microgrid and smart grid technologies and expanding energy and power capacity) will positively influence siting and permitting process, encouraging renewable energy investments leading to job creation and stimulating adoption of electric vehicles.

Already the aging fossil fuel power plants are increasingly replaced with renewable energy. In 2018, out of 33 GW new electricity capacity, 34% was renewable energy and remainder, 66% was natural gas according to U.S. Energy Information Administration.

Again in 2019, of 24 GW of planned new electric generation capacity, 66% was allocated to renewable energy (from wind and solar), and 34% to natural gas. In addition, 8 GW of aging fossil fuel power and nuclear is scheduled for deactivation.

The states continuing with their pro-fossil fuel agenda will lose out on economic boom from job creation in renewable energy industry, and most likely those administrations would be voted out in favor of pro-renewable energy leadership, which is what happened in New Jersey and Maine.

Now back to Pat Hohl’s original question on ordering the importance of key traits, and selecting and communicating the best course of action. Here it goes…

Grid security is the ultimate goal, and is a result of our ability to deliver electricity with utmost reliability and resiliency. Hence, both reliability and resiliency are equally important. Energy that is sustainable, affordable and flexible are the foundation traits enabling grid resiliency and reliability. Hence, I would order the key traits as 1) Sustainability, Affordability and Flexibility; 2) Resiliency and Reliability; 3) Security.

My best course of action would revolve around first identifying and developing sustainable, affordable and flexible sources of energy generation. Renewable resources win hands down. Sun, wind, energy from flowing water bodies (hydro), biomass, and sold and liquid waste are constant and dependable resources, and non-confrontational, in the sense – don’t have to control or wage a war against any country to ensure a steady supply. Technologies are already available to harvest energy from these resources. Second initiate a dialog between ISO/RTOs and Institutional Capital to scope out the extent of transmission upgrade and costs for grid to operate in the next 200 years. Then Public Service Commission, Federal Energy Regulatory Commission, Independent Power Producers and other governmental and non-governmental organizations / stakeholders can get involved to flesh out the details and incentives to attract institutional capital.

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