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Building a Smarter Electric Grid: How Investing in Smarter Electricity Infrastructure Will Energize America

Posted by Content Coordinator on Tuesday, July 25th, 2017


Executive Summary

AII - smarter electric gridAccess to affordable, reliable energy is the cornerstone of a strong economy and first-world living standards. The U.S. electric grid has served as the backbone of the U.S. economy, expanding and evolving along the way. As new energy technologies continue to emerge and growing amounts of distributed energy resources (“DER”) come online, the grid will serve as a critical enabler of these technologies.

The potential benefits of a smarter, more distributed grid are well-established, including a reduced carbon footprint, increased efficiency, and reliability and resiliency improvements. But creating multidirectional flow on a grid that was designed primarily to deliver power in one direction, while also improving the system’s capability to integrate increased amounts of distributed resources, is a costly and complex challenge. Without well-planned grid infrastructure improvements that provide increased visibility and management, these and other challenges could negatively impact system reliability and resilience, and put additional stress on existing infrastructure, e.g., power lines, transformers, substations, control systems, etc. Finally, the increased interconnectedness and complexity of the emerging grid model may create new cyber vulnerabilities.

Many electric utilities and grid operators have made investments to further modernize their systems to ensure smart grid and DER technologies are properly integrated and contribute to enhancing the resiliency and reliability of the grid. And while many stakeholders, including utilities and other market participants, are actively investing in deploying these new technologies, such development is uneven, and in aggregate may fall short of what is needed to fully realize the benefits of the “DER-ready” smart grid.

This paper identifies priorities for additional future investment to help companies and governments smooth the transition to a more digitized grid and safely and efficiently integrate DER, including rooftop solar and other distributed generation (“DG”), energy storage, electric vehicles, and other advanced energy technologies (e.g., smart hardware, software, and analytic capabilities). Specifically, this paper recommends that state and federal regulators and utilities consider undertaking the following investments, modifications, and practices:

  • Enhanced foundational infrastructure: Investments in overhead and underground lines with conductors and cable with sufficient capacity are necessary to facilitate the movement of power to and from forecasted increases of DER.
  • Advanced protection, distribution automation, and advanced metering infrastructure (AMI): Widespread variable DG adoption, particularly photovoltaic (PV) systems, is transforming distribution systems from passive grids to dynamic networks. This type of system requires increased visibility, observability, awareness, and management in real-time. Needed investments include deployment of advanced reclosers, distribution automation switches, advanced sensors, modern voltage control/regulation devices, and AMI (i.e., smart meters).
  • Communications infrastructure: Additional investment is needed to ensure data collected in the field can be sent to utility control centers, distributed controllers, and information systems, and control decisions communicated back to field devices in real-time. Current distribution systems either do not have two-way communications infrastructure with enough bandwidth and reliability to collect data and implement control actions, or their coverage is limited to distribution substations and a few critical components.
  • Advanced control/management systems and grid analytics: Controlling an active and dynamic distribution grid requires advanced control and management systems and applications with advanced algorithms that can process the data collected in the field to make intelligent control decisions aimed at optimizing real-time distribution system performance, including Distribution Management Systems (DMS), Outage Management Systems (OMS), Distributed Energy Resources Management Systems (DERMS), and more.
  • Distributed Energy Storage (DES): Increased deployment of DES will help manage the reliability challenges that arise when integrating increased amounts of variable DG into distribution grids.

I. Introduction

A. Overview of the Evolving Electricity Sector

The advent of new technologies and the increased deployment of distributed energy resources (“DER”) have spurred speculation and debate regarding the future of the U.S. electricity system. The debate goes far beyond the mainstream energy discourse of fossil fuel versus renewable energy generation. Rather, it centers upon something much more fundamental: the very design of how electricity should be generated, delivered, and consumed. At the heart of this issue is the speed and scope with which the Nation’s electricity system will shift from the current centralized model to an increasingly decentralized one.

The traditional or centralized model has evolved since Thomas Edison introduced the first central power station, but the basic structure is relatively unchanged: generate electrons at a central power plant, transmit them over a unidirectional system of high-voltage transmission lines, and deliver them to consumers through local distribution networks. Of course, there’s nothing simple about delivering electricity in real-time to millions of people. A sophisticated system, backed by complex engineering and hundreds of thousands of component parts, supports the traditional model, keeping supply and demand in constant balance down to the millisecond in order to keep the lights on.

The emerging, more decentralized model is less reliant on the central power station as the primary provider of electricity. Instead, this model envisions an integrated network of various distribution-level technologies (e.g., DER, energy storage, electric vehicles, microgrids, and demand-side management technologies, etc.) that would allow for the bidirectional or multidirectional flow of electrons, the use of sophisticated energy usage, pricing, and load management software, connected appliances and vehicles, and improved communications between producers, consumers, devices, and systems.

The two models are not mutually exclusive. The most resilient smart grid likely will be a centralized-decentralized hybrid. While it is apparent that the way in which electricity is produced, delivered, and consumed will differ from today’s traditional model, the fundamental design and engineering that makes up today’s electric grid will serve as the foundation for achieving a more distributed future.

B. What’s Powering this Evolution?

Smart grid deployment efforts have gained momentum in recent years for a number of reasons, ranging from economics, technological advances, environmental considerations, and public policies to changing consumer needs and expectations.

While environmental considerations and consumer expectations are more difficult to quantify, technological breakthroughs in the distributed space are more straightforward. Rooftop solar systems, energy storage technologies, and electric vehicles have all benefited from improved efficiencies. Further, breakthroughs in the hardware, software, and communications systems that support distributed technologies have been critical to increasing deployment.3 Advances in information and communications technologies have led to intelligent energy platforms that are capable of sharing information among grid components in real-time, automating grid operations, serving load management functions, and using energy analytics to improve system efficiencies and provide consumers greater transparency into usage and pricing.

These technological improvements combined with economies of scale, and state and federal tax incentives, grants, and mandates are putting downward pressure on the installed cost of residential solar and other DER technologies. These lower costs have led some consumers to take better inventory of their choices, whether for environmental reasons or because it makes good economic sense. But, increasingly, there’s another trend driving consumer interest in distributed energy resources and related products – changing expectations about how they interact with all services across industry sectors. Platforms like Uber, Netflix, and Airbnb, gave consumers significantly greater control over the products and services they consume. Some consumers have carried these expectations into the energy sector, calling for greater control over their energy use and what they pay for it. From rooftop solar, residential energy storage, microgrids, net zero homes, community solar, and smart appliances, a literal “power to the people” mentality is beginning to take shape among electricity consumers.

Download full version (PDF): Building a Smarter Electric Grid

About the Alliance for Innovation and Infrastructure (Aii)
The Alliance for Innovation and Infrastructure (Aii) is an independent, national, educational organization dedicated to identifying our nation’s infrastructure needs, creating awareness of those needs, and developing public-private partnerships to address those issues. Aii strives to promote proven, innovative technology and higher safety standards to achieve industry excellence nationwide.

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