Energy Transition Insights from the DOE's Innovative Grid Deployment Liftoff Report

To reach our climate goals and bring greater resilience and efficiency to the electric industry, we have to massively transform how we produce, move, store, and consume energy.  The question is how can we best drive this energy transition?

Enter: the US Department of Energy.  DOE has provided a series of deeply researched and thoughtfully written Liftoff Reports on key technology sectors that will drive this transition – from virtual power plants to long-duration energy storage, industrial decarbonization, and more.

While incredibly informative, these reports are also quite long.  If you've wanted to read them but haven't found the time, you're not alone.  That's why I'm creating highlights of the reports – starting with the Innovative Grid Deployment report.  Enjoy these takeaways from the 96-page paper!

Overview

The Innovative Grid Deployment report looks at underutilized technologies for our current infrastructure that can help ease the pressure on the grid resulting from increased load growth and broad electrification trends.  While we need to increase transmission & distribution (T&D) capacity and energy storage significantly in coming years, we can make much better use of existing infrastructure and rights-of-way through a set of advanced grid technologies.

These include high-efficiency conductors, dynamic line rating (DLR) systems, advanced power flow control (APFC), and more.  Together they can not only improve grid reliability but also support the integration of more renewable energy, which is key for decarbonizing the grid as quickly as possible.  Each of these solutions has the potential to unlock 20-100 GW of incremental T&D capacity, to meet an expected 91 GW increase in peak demand growth over the next decade – an incredible opportunity for rapid and cost-effective progress.

With the right regulatory actions and industry adoption, these technologies can give us the time to build out our grid infrastructure while meeting growing demand along the way.

6 interesting takeaways

1. Rapid deployment: Solutions like DLR and APFC can be deployed much faster than traditional grid upgrades. For example, while their initial deployment may take 1-3 years, they can then be scaled across a utility's operation in 3-6 months or less. This can help ease near-term grid capacity challenges.
2. Cost-effectiveness: They can enhance the existing grid's capacity and efficiency at a fraction of the cost of traditional infrastructure projects. DLR systems for example can increase transmission capacity by around 10-30%, for less than 5% of the cost of reconstructing existing lines.
3. Energy storage as a grid asset: In addition to serving as a generation asset, energy storage can function as a key component of transmission and distribution by helping manage peak loads and enhance system resilience. This broader use of energy storage could change how projects are planned and valued.
4. Reducing ratepayer costs: Advanced grid technologies could potentially reduce energy costs for customers. This is accomplished through more efficient grid operation and avoiding/deferring the high costs of building new infrastructure or extensive grid overhauls.
5. Major decarbonization benefits: These technologies can reduce emissions in 3 ways: reducing curtailment of existing renewable generation (through grid enhancements or physical capacity additions), enabling the interconnection of new renewable sources where transmission upgrades are needed, and reducing emissions from fossil fuel peaking plants (by reducing their usage).
6. Synergies and the system approach: While these technologies all provide benefit individually, together they can drive even greater results. These synergies highlight the need for a coordinated, system-oriented approach when planning grid investments.

Notable metrics

Incremental peak demand support: The technologies discussed in the report can each support an incremental 20-100 GW of peak demand. This is a massive potential for increased capacity that can be achieved without building new infrastructure.

Infrastructure cost savings potential: An estimated $5-35 billion in transmission and distribution infrastructure costs could be deferred over the next 5 years.

Reduction in congestion costs: Technologies like DLR and APFC have the potential to reduce congestion costs dramatically, which in turn can decrease energy prices for consumers. Real-world examples include:

• PPL Electric Utility deployed DLR on two congested lines for an expected $23 million in reduced congestion costs.
• In PJM, one study found that deploying a $0.5 million DLR system could save $4 million and deploying various numbers of APFCs could save $39-196 million in annual congestion costs.
• Alliant Energy used topology optimization reconfigurations to identify $40.3 million in achievable congestion cost reductions (54% of total system congestion costs). [1]

Quick deployment time: While many of these technologies are geared to long-term capacity and reliability enhancement, some can help quickly respond to near-term grid needs and market demands. DLR, for example, can be deployed initially in 1-3 years, followed by full-scale deployment in 3-6 months.

"Transmission capacity constraints are driving up customer energy bills. These congestion costs adversely impact ratepayer energy bills and are estimated to have reached ~$21 billion in 2022."

Key challenges

Despite the immense promise of these technologies, considerable hurdles exist, including:

High initial costs: While the long-term benefits of these technologies are clear, the initial investments can be substantial. This includes not only the costs of the technologies themselves, but in some cases also infrastructure upgrades needed to support or get maximum benefit from them, such as communications and data management systems.

Regulatory and market structures: Existing regulatory frameworks and utility business models need to continue evolving to support the adoption of some of these technologies. Current structures often favor building infrastructure over deploying innovative solutions that require different cost-recovery methods, even if the new solutions have financial and operational advantages.

Outdated planning processes: Advanced grid solutions are often not considered within existing planning processes and decision making tools. Many of the solutions offer value in ways that are not captured or modeled, and their benefits may extend well beyond the short-term horizons of some plans.

Technical integration challenges: Integrating these technologies into the grid sometimes involves meaningful technical challenges – such as issues related to system compatibility, the need for new operational skills, and managing new data, integrations, and workflows associated with digitized grid components.

Cybersecurity risks: As grid technologies become more digitized and interconnected, cybersecurity risks increase. Ensuring the security of the grid while integrating these new technologies is critical, but can be very challenging, potentially discouraging investment in these solutions.

"The value of advanced grid solutions sometimes flows to customers, other grid stakeholders, or society at large, while the utility bears the cost without realizing significant financial benefit. In the absence of a financial incentive or regulatory mandate, utilities are likely to prioritize investments in other projects that generate higher financial returns, rather than prioritizing solutions that may drive better overall system or societal impact."

Reasons for optimism

Although the challenges won't be easy to solve, there are reasons to be optimistic about the adoption and impact these technologies can achieve:

Technology readiness: Many of them are commercially available and ready for deployment. This means utilities, grid operators, and others can move now to upgrade infrastructure to support more renewables integration and improve efficiency.

Scalability of solutions: Many of these technologies have already demonstrated scalability – advanced conductors, DLR, energy storage, and others. They're ready for broad adoption across regions.

Regulatory and policy support: There's growing support for clean energy and grid modernization. For example performance-based regulation [2], which is in effect or under consideration in 21 states, can increase the tailwinds for these technologies. 22 states plus Puerto Rico also have or are considering an integrated distribution system planning or grid modernization plan requirement.

Economic value: The economic proposition for many of these technologies is very strong. By reducing the need for new infrastructure, lowering operational costs, and improving system efficiency, they provide a cost-effective way to enhance grid performance.

Integration with renewables: By enhancing grid capacity and stability, these solutions allow us to take advantage of renewables faster than we could otherwise do, given current transmission constraints. This is critical both for minimizing operating and capital expenses and for achieving decarbonization goals.

Big questions

The speed and magnitude of adoption for these technologies will ultimately come down to questions such as the following:

How will regulatory frameworks adapt?

• Regulation will need to evolve to accommodate new technologies that can improve grid efficiency and resilience. Will regulations adapt quickly enough to enable rapid adoption? Will they encourage innovation or will inertia win out?

What is the role of public vs. private investment?

• How much should governments invest in fostering adoption of these technologies through grants, subsidies, and other incentives? How can private sector investment be motivated to drive development and deployment of advanced grid solutions?

How can we manage interoperability between existing and new technologies?

• New tech needs to work seamlessly with existing infrastructure. What integration and management challenges will have to be addressed? What innovations, external services, workforce training, and other capabilities will be needed to ensure reliable operation?

Will customer and industry stakeholders support these changes?

• Adoption of these technologies requires not only approval from regulators but also acceptance by customers and other industry stakeholders. How will these groups view the benefits vs. costs? Will there be sufficient education and advocacy to promote their adoption?

How will cybersecurity risks be managed?

• As the grid becomes more connected and dependent on digital technologies, it becomes more vulnerable to cyber attacks. What strategies and technologies can best protect the grid from attacks? Will the necessary investments in technology and training be made? How will cybersecurity approaches evolve to keep pace with the increasing sophistication of adversaries and breadth of attack vectors?

While many challenges stand in the way of achieving large-scale adoption, the availability, scalability, and cost-effectiveness of these technologies should give us both optimism and motivation to work diligently on solving those challenges.

For more information, check out the Liftoff report or presentation. If you'd like to get updated when I publish additional Liftoff Report summaries, comment "Liftoff Report" on this post.

Notes:

[1] Sources for all figures in this section are provided within the report.

[2] According to the report, performance-based regulations are a regulatory tool that realigns utility incentives around goals such as energy efficiency and distributed energy resource (DER) penetration, which the traditional cost of service model does not fully motivate.