Transformation of the Electric Grid

By John Addison

John Addison is the author of two books - Save Gas, Save the Planet that details the future of transportation and Revenue Rocket about technology partner strategy. CNET, Clean Fleet Report, and Meeting of the Minds have published over 300 of his articles. Prior to being a writer and speaker, he was in partner and sales management for technology companies such as Sun Microsystems. Follow John on Twitter @soaringcities.

Feb 10, 2016 | Urban Sustainability | 0 comments

Five states top Grid Modernization Index

About half of all new electricity generating capacity in the United States now comes from renewables such as wind energy and solar power; coal use is at a 30 year low. A modern grid is a priority as we shift from large dirty power plants to distributed renewable energy and demand that responds instantly to price signals. A transformation is underway in how electricity in the United States is generated, transmitted, and used.

This article highlights the progress being made in leading U.S. states in renewables, grid modernization, and initiatives to level demand.

A good place to start is the 3rd Annual Grid Modernization Index (GMI) report by Gridwise Alliance and Clean Edge. The report ranks these U.S. states as leaders:

  1. California
  2. Illinois
  3. Texas
  4. Maryland
  5. Delaware

It is not easy to rank high in this index. Major investments are needed in grid modernization, operations, information technology and customer engagement. GMI ranks the states on these factors:

  • STATE SUPPORT rankings consider plans, policies, incentives and requirements that support grid modernization, energy efficiency, greenhouse gas reduction, electric vehicle (EV) incentives, grid storage, and renewables.
  • CUSTOMER ENGAGEMENT ranks states on their rate structures including dynamic pricing, customer outreach, and data management.
  • GRID OPERATIONS benchmarks the deployment of sensors and smart meters, grid storage, microgrids, and advanced information technology.

California

California is the highest-ranked state in this year’s GMI. From advanced meter deployment to rate structures to information technology to solar and storage, California leads.

California is twice as energy efficient as most states and therefore needs half the energy generation of many. For most regulated utilities, the more electricity and gas sold, the more profits they make. California utilities receive guaranteed revenue. If they help customers be more energy efficient, the utility has lowering costs and higher profits. California implemented this decoupling for natural gas utilities in 1978 and electricity in 1982.

Over 20 percent of California’s energy comes from renewables. By law, in 2030, it will be 50 percent renewables. California leads the world in zero-net-energy homes. Starting in 2020, new homes must be zero net energy.

Time-of-use (TOU) pricing encourages more electricity use off-peak, such as charging EVs and heating stored water. By 2019, TOU will be the default rate structure in California, except for customers who opt out. Solar customers using net metering will be under TOU much sooner. A great deal has already been learned from TOU pilots, such as EV TOU charging in San Diego. TOU requires advanced metering infrastructure (AMI); California has 82 percent AMI deployment. AMI allows utilities to collect information about energy use; AMI is necessary for a smart grid to level energy demand using TOU and demand response.

Utilities, such as Southern California Edison are leading with innovative grid scale storage. Stem, a grid storage innovator, successfully bid aggregated distributed storage into the California ISO electricity market. The grid is being upgraded to support distributed energy generation, such as solar.

Illinois

Illinois, with its Energy Infrastructure Modernization Act, authorized a $2.6 billion grid modernization program for utilities Exelon’s Commonwealth Edison (ComEd) and a $648 million for Ameren. ComEd hopes to win funding for six microgrids in 2016.

Illinois offers real-time pricing which encourages more electricity use off-peak and less at peak. The net result is the need for fewer power plants. Most customers cannot benefit from RTP, however, because Illinois only has 17 percent AMI deployment.

Illinois efforts are enhanced by PJM, a wholesaler and grid interconnect operator in 13 states and DC, with excellent programs for renewables integration and demand response.

Phasor measurement units (PMUs) are key components of the smart grid on the transmission and distribution side. PMUs measure voltage, current, and frequency at critical locations along the grid, allowing transmission grid operators to reduce widespread outages and improve transmission efficiency and reliability. Illinois, like the other top 5 states, has upgraded its transmission with extensive PMU deployment.

Texas

Texas has been a leader in deregulation, encouraging competition and innovation between electricity service providers. Texas leads the nation in wind power and is adding 3,500 miles of transmission lines to transmit more electricity from rural wind farms to major cities and industries. Large-scale battery storage is being added to some wind operations where wind power is strongest at night, rather than peak demand.

Its PMU deployment has upgraded the Texas grid to accommodate two-way power flows from both power plants to buildings, and solar on buildings to the grid.

Texas has 70 percent penetration of AMI, upgraded transmission and distribution, and use of big data and analytics for outage management.

In 2016, Texas will test “Internet of Energy” using Geli software to manage a microgrid that includes EV charging, controllable HVAC, smart water heaters, LED lighting, and batteries.

Maryland, Delaware and PJM

Maryland and Delaware also benefit by being part of PJM, which has lead the nation in demand response (DR). PJM has lowered capacity pricing by 85 percent with its DR programs. Following Federal Energy Regulatory Commission rulings, PJM has a market-based approach to meeting regulatory services. PJM leads in using battery storage to provide frequency regulation, even using batteries in electric vehicles. PJM will expand battery use to voltage support, microgrid islanding, and support of solar and wind.

Maryland has aggressive energy efficiency mandates, requiring utilities to cut sales two percent yearly. Maryland and Delaware each have about 70 percent AMI deployment.

Innovation in Generation and Grid Transmission

Innovation also continues in other states. New York is shaping its Reforming the Energy Vision, however, with almost almost no deployment of AMI, it will take years to realize the vision.

Hawaii will increase its Renewable Portfolio Standard to 100 percent by 2045. Hawaii is home to many successful combinations of solar, wind and large-scale storage. Customers are rewarded with high net metering rates.

A modern grid is essential if we are to match demand for electricity with a supply that is increasingly distributed wind and solar. Customers can save by responding to time-of-use pricing with smart water heaters, thermostats, and smart appliances. Yet, billions of up front investments in a modern grid are needed to achieve the benefits of a distributed, efficient and reliable electric grid. Utilities rarely make the investment unless funded or reimbursed. Grid modernization will continue, with some states far ahead of others, as we progress to a modern grid that is cleaner, distributed, reliable, resilient, and promotes energy efficiency.

Discussion

Leave your comment below, or reply to others.

Submit a Comment

Your email address will not be published. Required fields are marked *

Read more from the Meeting of the Minds Blog

Spotlighting innovations in urban sustainability and connected technology

Regional Sustainability at the District Level

At the recent Global Cities Team Challenge Expo, Acquanetta Warren, the Mayor of Fontana California, expressed that ‘Technology makes government more accessible.’ Similar to cities, however, district-level organizations face constant challenges associated with financial and human resource constraints. In an environment of competing priorities and limited resources, strategies that depend on upfront investment and long-term returns are difficult to adopt at any level of governance.

Sustainability programs often require such long-term visions and upfront investment. In order for smart districts to become sustainable districts, it is imperative to develop strategies that leverage administrative frameworks, external resources, and novel technologies to minimize costs and facilitate continuous progress.

Business Improvement Area 2.0: Place-Based Industrial Strategy

Business Improvement Areas (BIAs) empower local business people, commercial property owners, and professionals in a specific geographic area to collaborate with the support of a local municipality in organizing, financing, and carrying out physical improvements and marketing of their districts. The key to its resilience over the years was the innovation of ‘compulsory BIA membership and levy payments’ which overcame the perennial free-rider problem intrinsic to voluntary business associations of the past. It is generally acknowledged that the BIA model, through this ability to harness business funds and reinvest them directly back into the local business area, has been a success internationally, in terms of enhanced economic, social, and community development outcomes.

Meeting of the Minds is made possible by the generous support of these organizations.