How States are Adapting to Grid Modernization
As different regions of the country face their own unique challenges to supplying secure, reliable, and sustainable energy, several common trends have emerged. The last few years have provided some signs of what our energy systems of the future will look like with the incorporation of new, advanced technological capabilities. These new capabilities include communication tools to monitor, control, and optimize both generation and loads in real-time while minimizing losses in delivery. We are also beginning to see how energy storage is impacting grid operations and resource planning.
In this blog I will explore several recent examples and initiatives in different states that are setting precedents for the adoption of Distributed Energy Resources (DERs) and smart grid technologies, although the definition of “smart grid” is still a moving target. In addition, I will also review some highlights from the 2017 Grid Modernization Index which ranks states in terms of customer engagement, state support, and grid operations.
Modernizing the Grid in Minnesota
In Minnesota, there are on-going efforts to bring more investments into cost-effective smart grid solutions that benefit utilities, consumers, and society. Officials in Minnesota’s Department of Commerce (DOC) are studying how improvements to utility infrastructure can help meet future conservation goals. One part of the study works to create a standard methodology for calculating system-wide savings; this is an important step to encouraging widespread adoption. Examples of efficiency improvements in the study scope include waste heat recovery, Conservation Voltage Reduction (CVR), and remote monitoring for accelerated maintenance. Information from the Minnesota DOC study will help encourage decisions to pursue the most efficient option, as opposed to exclusively looking for the lowest-cost option. Many utilities in Minnesota are already embracing innovative approaches to resource planning and distribution operations, and this group will continue to grow as the Minnesota DOC study concludes in 2018.
Heartland State Ranks Second in GMI
As I look around to other states for examples of good practice in energy innovation, I was pleased to find that a Midwestern state is in the top three on the Grid Modernization Index (GMI). The fourth edition of the GMI was issued in November 2017 by the GridWise Alliance and includes the rankings and analysis of all 50 U.S. states and the District of Columbia. The state of Illinois took second place for 2017, right behind California. And as the West Coast behemoth is getting enough attention in the energy world right now, I was excited to see a state in the Heartland is leading the way in modernizing our energy systems. The GMI report evaluates different aspects of practice and policy; Illinois scored particularly high in the category of grid operations. It’s worth noting that those who performed well in this category are “installing broadband networks with increased securing and monitoring to prepare for more robust operationalization of cloud-based services.” In order to advance these areas, the state will continue working to move forward with its ongoing “NextGrid: Illinois’ Utility of the Future Study.” Through this 18-month effort, managed by the Illinois Commerce Commission (ICC), the state “will examine the use of new technologies to improve the state’s electric grid while minimizing costs to consumers.” Supporting these efforts is Dr. Farrokh Rahimi, Senior Vice President of Market Design and Consulting at OATI. With the efforts of NextGrid, Illinois will be well-positioned to continue their leadership as energy innovators in the future.
A recent example of Illinois implementing changes to the grid can be seen in the Bronzeville microgrid. In February 2018 the ICC approved ComEd’s proposal for the first microgrid cluster in the country. The Bronzeville microgrid will comprise of 7 MW of DERs, which includes solar PV and battery energy storage, and will serve all delivery customers in the area. The microgrid will allow for a deep penetration of renewable energy sited in the community it serves. Critical public safety facilities will be protected in the case of an outage, and it will allow utilities and regulators the opportunity to study interactions with the nearby Illinois Institute of Technology microgrid. Though it is commonly believed microgrid clusters will be a widespread occurrence in the smart grid of the future, Illinois will be one of the first testing grounds.
Texas Maintains 3rd Rank
Looking down the list, the Lone Star State was ranked third in the GMI for the second year in a row. Texas has consistently ranked high in grid modernization efforts and one reason for this is that electricity market conditions encourage innovation in both distribution and retail sales. Texas is the only state that operates its own electric grid fully within its borders, and investments in smart grid technologies have proven beneficial. With more visibility to the system, outage restoration is faster after major weather-related events, which Texas has seen plenty of these last few years. This also allows for a deeper penetration of DERs and the ability to maximize the value of those assets.
The GMI report describes that in leading states “new software platforms and control systems are being deployed by a diverse group of utilities to automate grid operations and increase system efficiency and situational awareness.” This can definitely be seen in Texas. One type of DER integration that Texas performs particularly well in is smart integration of EV charging, and in fact, it is the only state to receive full credit in this category. In addition to EV charging, energy storage is also a hot topic in the state. Recently American Electric Power (AEP) proposed energy storage in lieu of traditional distribution line upgrades. The proposal (see Texas PUC Docket 46368) included a $2.3 million energy storage system to meet capacity needs rather than spending $11.3 to $22.5 million to build a transmission line. Public Utilities Commission (PUC) Chairman DeAnn T. Walker thanked AEP for bringing the proposal forward and went on to say that “In the changing environment in which we live, there are new technologies that could hold significant promise to serve Texas customers more reliably and efficiently.” At the proposed project costs in the AEP case, I think there definitely is chance for significant benefits to all parties.
Minnesotan Efforts in Grid Modernization
Coming back to the Minnesota, there are also signs that new types of DERs will continue to be pursued by utilities. The recent example of Xcel Energy’s proposal for the Belle Plaine Battery Project is likely a sign of a utility model that will be a regular option as energy storage costs continue to drop and smart grid controls give grid operators visibility and control. In this case, Xcel proposed to install 1 MW of solar PV and a 2 MW / 6 MWh battery system instead of expanding the size of the existing 69 kV transmission line that serves the City of Belle Plaine substation. The Minnesota PUC did not approve at that time, however the Commission has continued to push utilities to develop DER options and we are likely to see the deployment of utility-scale energy storage in the near future. Another recent example includes the announcement from Connexus Energy, the state’s largest retail electric cooperative. They have plans to build a 20 MW battery storage system paired with 10 MW of solar PV that would be split at 3 sites. These examples are an indication of what will become more widespread as grid modernization progresses.
In our home state of Minnesota, and elsewhere around the country, a drive for grid transformation is underway. As the grid becomes more interactive with DERs, it is moving away from the one-way flow of power from fossil-fuel plants. The building blocks for this transformation are available now and are causing a dramatic shift in how energy is generated, either stored or transmitted, and finally used by the ratepayers. For this transformation to be a win-win, all stakeholders, by necessity, have to work together. This is already happening. Across the country, regulators, grid planners, utilities, consumers and technology providers are working in concert to devise better strategies for making the grid smarter.
This is where OATI comes in. As a leader in this field, with commercially-matured smart grid technologies, OATI’s experts are actively involved in national and international conversations from consulting on new regulatory models and market designs, to enterprise-wide technology integration projects. OATI is ready to help implement smart grid solutions to cost-effectively meet today’s needs as well as the changing energy landscape. We have a track record of providing industry leading products and services to our energy customers, and will continue to help our customers overcome challenges presented by grid modernization. As states across the country work to define energy policies to shape our future grid, our team is ready to help the industry evolve and make the smart grid vision a reality.
About the Author
Glen Fisher is an Account Executive for OATI on the Smart Grid Solutions team and in Business Development for USA Microgrids, an OATI company. He is a Certified Energy Manager (CEM) and holds a Bachelor’s Degree from the University of Wisconsin – Eau Claire. Throughout his career, he has been passionate about helping organizations use energy more intelligently. Starting out in the renewable energy field, Glen was a Project Manager and Site Assessor for solar PV and solar thermal systems, as well as off-grid power and hydronic heating systems. After moving from that role he joined an Investor Owned Utility to work with commercial and industrial consumers on energy management. He has extensive experience delivering energy efficiency programs and effectively communicating with business leaders and key stakeholders on energy issues. He now works for OATI’s Smart Grid team interfacing with utilities and commercial/industrial customers in the state of Minnesota to utilize smart grid technologies, distributed energy resources and microgrids.