Grid Mod in the Age of Utility Carbon Reduction

Advancing a modern, flexible and integrated grid underpins utilities’ transformation to a clean energy future. Utilities’ ability to achieve 100% carbon-reduction targets, adapt to climate risk, and respond to evolving customer needs will depend on the grid’s capabilities, design, planning and operations.

For 14 years, the Smart Electric Power Alliance (SEPA) has surveyed U.S. electric utilities to collect and assess deployment data for grid-tied solar power, energy storage and demand response. In recognition of the increased industry focus on carbon reduction and the cross-impacts of utility operations, SEPA launched the Utility Transformation Challenge—a comprehensive, honest assessment of U.S. electric distribution utilities’ progress towards a clean and modern energy future. SEPA collected survey data from 135 individual utilities, representing 83 million U.S. electric customers, or approximately 63% of all accounts. Based on the analysis of these survey responses, SEPA published a Utility Transformation Profile outlining insights and recommendations, as well as a Leaderboard to recognize the ten utilities that demonstrated the greatest progress.

Redefining grid modernization
As part of the Utility Transformation Challenge, our team sought to reevaluate the precision of measuring utility efforts to accommodate clean energy resources. Grid Modernization has become a catch-all term for any initiatives that provide increased resilience, improved reliability, enhanced security, greater affordability, improved flexibility, and/or enhanced sustainability. However, this means that grid modernization can define common projects that span from replacing aging infrastructure to more advanced solutions, like the implementation of Distributed Energy Resource Management Systems or Advanced Distribution Management Systems. This imprecision makes it challenging to evaluate utility grid modernization efforts that facilitate clean energy integration.

SEPA coined a new term, Modern Grid Enablement, that focuses on utility initiatives which specifically address the needs of the grid, while also facilitating the integration of clean energy. This new term encompasses grid investments that accommodate carbon reduction technologies. Utilities have made investments to advance a modern, flexible and integrated grid, but more work remains in tying that to a clean transformation. Modern Grid Enablement specifically focuses on the integration of clean energy resources in ways that balance principles of grid flexibility, reliability, resilience, efficiency and affordability.

Within this dimension of transformation, SEPA assessed utilities across the following topics:

• Demand flexibility, solar, energy storage, and transportation electrification programs which provide customers the opportunity to participate in the transformation.
• Digitization efforts, including advanced metering infrastructure (AMI) deployment as well as greater distribution system planning, can provide utilities valuable visibility into how their loads will grow in the future. Those trends can shape how utilities plan for future grid investments with a focus on accommodating clean energy resources to meet carbon reduction goals.
• Interconnection procedures which streamline, facilitate and, in some cases, expedite the process to connect distributed energy resources (DERs) to the grid.

Customer programs
Leading utilities are offering their customers greater opportunities to take part in the transformation. For example, while many respondents offer behind-the-meter energy storage programs, leading utilities are doing so at a higher rate: 7 of 10 Leaderboard utilities offer at least one energy storage program to residential and non-residential customers, compared to 29% of other respondents. Additionally, leading utilities offer more integrated DER programs to their customers that further complement clean energy resources.

Integrated Program Offerings by Respondents

Digitization and AMI
Digitization is an area where a majority of respondents are investing to address the needs and expectations of their customers. However, many utilities are missing out on the full benefits that high-speed digital communications offer in the transformation. For example, 77% of all respondents have deployed AMI, which can provide important visibility into a utility’s operations and strengthen the customer experience by shortening outages times. Despite these capabilities, only 33% of survey respondents use AMI data to measure electric vehicle (EV) connections, only 31% for load disaggregation; and only 46% for visibility of grid operations.

Leveraging AMI data for visibility of grid operations is a key pillar of utilities’ efforts to cultivate a more interconnected, data-driven grid with expanded automation and coordination. Respondents primarily use AMI data for billing, outage awareness, and theft detection, and increasingly, many are tapping into expanded AMI capabilities for improving system performance and providing customers with cleaner, and more efficient and reliable power.

Utility AMI Use-Cases

Portland General Electric, Commonwealth Edison, and PSEG Long Island offer a few examples of utilities implementing AMI for greater grid control.

Interconnection
Over the past two decades, state regulators have led efforts to streamline and update interconnection procedures to facilitate DER deployment. Ongoing improvements in many states have allowed, required, and in some cases, incentivized utilities to process rising volumes of DER interconnection requests, and to accommodate newer and more complex DER systems. While utilities must continue to update their interconnection procedures to accommodate evolving technologies, other stakeholders, specifically regulators, play an important role in keeping interconnection processes up to date while maintaining safety and reliability.

Next steps
Significant shifts in customer energy usage may be approaching faster than anticipated, with Wood Mackenzie forecasting that cumulative U.S. DER capacity will reach 387 GW by 2025. With EV infrastructure, batteries and grid-interactive water heaters contributing to that growth, utilities have an opportunity to leverage flexible technologies and investments to help maximize the scale and diversity of clean energy resources connected to the grid. Utilities must continue to invest in customer programs, digitization efforts, and efficient interconnection procedures that enable the integration of clean energy resources.

While leading utilities have made real progress towards modernization with a focus on carbon reduction, much work remains.