TODAY’S STUDY: The Right Hardware For A Smart Grid
Grid Modernization Technologies: Key Drivers of a Smarter Energy Future
Jonathan Blansfield and Adam Cooper, May 2017 (Edison Foundation Institute for Electric Innovation)
Technology is a key driver of the ongoing transformation of the electric power industry – it changes what we can do, how we do it, and what it costs. The U.S. electric power industry is investing billions in smarter energy infrastructure to enhance the reliability, resiliency and security of the energy grid; to integrate and manage growing numbers of distributed energy resources (DERs) and other devices; and to improve grid efficiency and optimization. In 2016 alone, investor-owned electric companies invested about $53 billion in the energy grid – $21 billion in the transmission grid and $32 billion in the distribution grid. Today, more than 70 million digital smart meters are deployed across the United States, covering more than 55 percent of all households. While smart meters are a key building block to a smarter energy grid, digital meters represent only a fraction of the grid modernization technologies being deployed across the country today.
As electric companies engage in grid modernization initiatives, it’s important that policy makers, regulators, consumer advocates, and other stakeholders understand what this means. This report discusses electric company investments in smarter energy infrastructure from the substation to the customer meter – largely digital technologies that are the building blocks of the future energy grid. It provides a non-technical overview of today’s grid modernization technologies – not future technologies – and covers the following:
Why are electric companies modernizing the energy grid?
What does smarter energy infrastructure achieve?
What technologies are being deployed today?
What is the role of data analytics?
What is the future of grid modernization?
Why Are Electric Companies Modernizing the Energy Grid?
Grid modernization is unfolding state-by-state – at different paces and in different ways – across the country through investments in smarter energy infrastructure. What is new to one company may be business-as-usual for another, but grid modernization is largely driven by the need to: (1) enhance resiliency, reliability, and security; (2) integrate and manage DERs; and (3) improve grid efficiency and optimization.
Enhance Resiliency, Reliability, and Security
Electricity is central to the everyday lives of all Americans. In today’s digital world, customers need and expect safe, affordable, highly reliable, and increasingly clean energy for quality of life and well-being. Grid modernization is about ensuring that electric companies are able to deliver the energy customers need, when they need it. Electric companies across the United States are building a more resilient and more reliable energy grid by investing in both physical asset modernization and technology upgrades. Physical asset investments include conductor upgrades, improved insulation, concrete poles, automated switches, and others. Technology upgrades enhance outage detection and restoration capabilities, energy grid visibility and power management, and customer communications.
Integrate and Manage Distributed Energy Resources (DERs)
Today, electric companies are investing in digital technologies to ensure seamless integration of DERs, to enable two-way power and information flows, and to utilize DERs as energy grid assets. Digital technologies – like advanced metering infrastructure (AMI), smart inverters, power line monitors that enable Volt/VAR optimization, and micro-phasor measurement units that facilitate real-time voltage and current measurements and visibility into energy grid conditions – are increasingly used to integrate and manage DERs.
Improve Grid Efficiency and Optimization
Installing intelligent grid devices for sensing and analytics can provide visibility into distribution grid operations, similar to the extensive visibility that exists for bulk power markets and the transmission grid. These devices can improve situational awareness to help identify the source of technical losses along the distribution system, allowing for right-sizing of electrical equipment based on customer load profiles. Advanced sensing and voltage management technologies also can increase solar photovoltaic hosting capacity on certain feeders.
What Does Smarter Energy Infrastructure Achieve?
Investments in smarter energy infrastructure to date are enabling the following: energy grid optimization; optimized power quality and power flow; data systems integration; grid visibility and diagnostics; automated outage management and service restoration; and DER integration and management. These are described briefly below
1. Energy Grid Optimization. More intelligent control and dispatch of generation and distributed energy assets as a result of real-time grid-edge visibility, data analytics, and increased substation or circuit capacity to integrate variable generation.
2. Optimized Power Quality and Power Flow. Use of digital sensing and control technologies to monitor line conditions, enable bi-directional power flows, ensure power quality to certain customers, and increase variable energy resource hosting capacity.
3. Data Systems Integration. Integration of data sets and systems into an enterprise-wide database to realize operational and customer benefits (e.g., merging operations technology and information technology systems).
4. Grid Visibility and Diagnostics. More frequent and granular visibility into grid conditions out to the grid edge enables real-time, efficient, and decentralized decision making, including the ability to predict and prevent anomalies and service disruptions and improve system utilization.
5. Automated Outage Management and Service Restoration. Use of “self-healing” outage technologies that autonomously detect faults, isolate/island outages, more quickly dispatch work crews, and provide near real-time service restoration updates to customers. 6. DER Integration and Management. Supports increased DER integration by solving feeder and circuit-level issues, and provides visibility into resource availability and performance.
Grid Modernization Technologies
Whether electric companies are just beginning to invest in smarter energy infrastructure or are embarking on the next phase of grid modernization, a key question is: which technology investments will yield the greatest customer and/or system benefits? Grid modernization investments fall into three broad categories: AMI; power flow management technologies; and distribution automation and outage management technologies…
Today, the U.S. electric power industry is investing more than $100 billion annually in smarter energy infrastructure and cleaner generating assets. These investments are paving the way for the energy grid of tomorrow. Over the past 10 years, electric companies have made great progress. But more remains to be done.
In some states, smart meters are fully deployed, and the focus is now on integrating larger numbers and greater concentrations of DERs. In some states, DER penetration is low, and the focus is on optimizing grid operations and enhancing resiliency. And, in other states, grid modernization is just beginning.
It is critical that, as the electric power industry moves toward realizing the digital energy grid of the future, all stakeholders – electric companies, technology providers, regulators, policy makers, governments, consumer advocates, venture firms, and other private investors – understand what it will take: strategic deployment of technologies combined to achieve specific capabilities over the medium-to-long term. These technology investments must deliver cost savings and operational efficiencies today, and be flexible enough to accommodate the changing conditions of tomorrow. It’s a complex and dynamic task, but has resulted in significant benefits already and will continue to yield benefits well into the future.