[BETA] Fortnightly

The introduction of competitive markets a decade ago triggered remarkable changes in an electric industry that had been conducting business in essentially the same manner for more than 70 years. These markets have fostered tens of billions of dollars of investment in generation and transmission, and have inspired entrepreneurs to develop novel technologies to modernize the system and make it more efficient.

In the decades ahead, more dramatic changes can be expected. They likely will be sparked by a surge of renewable energy development and the transmission needed to deliver its power to customers, the rapid expansion of demand-side resources and conservation, and the emergence of smart technologies that promise greater efficiency, reliability, and controllability—for operators and customers alike.

Realizing the potential environmental and economic benefits of these impending changes will depend, however, on successfully integrating these resources into the power system reliably and in a cost-effective manner.

Ten to 20 years from now, the power grid will look considerably different from the way it looks today. Although large, centrally located power plants will remain at its core, the power system of the future likely will be more dependent on wind farms, biomass, small hydro, photovoltaics and other renewable sources across both the transmission and distribution networks. The grid and its operators also might rely more on distributed energy sources for capacity, demand-side resources to reduce electricity use, and storage devices such as flywheels, batteries and plug-in electric vehicles (PEVs) that can make use of economic off-peak energy to help satisfy on-peak demand. In addition, innovative technologies, such as advanced meters, smart appliances and intelligent thermostats, will be deployed in homes and businesses to allow consumers to adjust their electricity use and lower system demand in response to real-time price signals.

This new mix of resources will add a significant amount of intricacy to an already complex power system. Unlike conventional generating plants, these new renewable resources have variable operating characteristics and will be scattered across the region wherever conditions are best suited to the type of resource being implemented, with many located far from demand centers. The future system – and its operators – will need to adapt to the challenge of managing thousands more resources and processing an exponential increase in the volume of data on a day-ahead and real-time basis. New communications technologies will be needed to ensure that grid operators can see and forecast what is happening—or about to happen—on the grid to maintain control of the system. Grid operators will need to be trained in the new technologies that will allow them to reliably manage a system in which conditions can change the moment the wind stops blowing or a demand-side resource is unable to respond. Policymakers, regulators and grid planners will have to assess the need for hundreds, maybe thousands, of miles of new transmission lines to connect these new resources to the bulk power system, and ultimately decide where they will be sited and