Adopting an interoperable framework for the smart grid isn’t just a question of technology standardization. It’s also about navigating the legal, regulatory, and business factors that affect...
Shaping system transformation.
The electric infrastructure faces a unique combination of transformative technology advances and unusually strong policy and market changes. This confluence presents the U.S. with the opportunity to strategically define a future power system that offers significant value in terms of reliability, resilience and economic competitiveness within the context of our aspirations for clean and secure energy systems. However, institutional and policy innovations will be required to capture the full opportunity before us. To achieve this, all stakeholders will need to work together systematically to define the objectives and 20- to 50-year national outcomes necessary to guide this important transformation.
Information technologies promise to substantially transform the electric power system and the way it serves consumers and the nation as a whole. From power plants to customers, digital technologies are triggering substantial innovation in monitoring, communications and control across the system. These innovations, collectively described as “smart grid,” have the potential to dramatically change the way we plan, build, and operate the electric system, from generation to end-user. They have the potential to enable a profound level of system transparency across entire interconnections, enabling operators to see actual system dynamics in real time and manage reliability and asset utilization with exceptional precision. And digitization of the distribution system, including smart metering, will provide transparency of demand and local operations that enable operators to treat demand as an actual tool in grid management rather than a simple boundary condition.
Beyond technology innovation, market and policy initiatives at the state and local levels to reduce emissions have launched a dramatic change in the generation portfolio that’s happening now and in the near future. Growth in intermittent generation from wind and solar has advanced significantly in the past five years. And emerging clean energy strategies are driving a move toward greater reliance on natural gas supplies, while some coal-fired power plants are being considered for closure. These shifts in the generation portfolio strongly influence grid planning and operations because they affect frequency response and voltage management, while balancing services become increasingly challenging to provide.
Another driver for change is the general pause in deregulation in the last five years. This—combined with continued innovation in new approaches for engaging demand, such as demand response and ancillary services markets—has left us with a variety of regulatory frameworks, within which regional and interconnection-scale operations must operate.
Finally, the progressive adoption of plug-in hybrids and electric vehicles to reduce oil imports in support of national energy security goals offers a new load for electricity that must be considered in transmission and distribution (T&D) system planning.
Important progress has been made in expanding clean generation and testing the benefits of digital innovations at the T&D level. Markets for ancillary services and demand response are emerging in some areas, and innovative approaches are emerging to offer ancillary services products in unstructured market areas. Overall, however, our regulatory environment has struggled to keep pace with advances in technology and alternate generation