DUKE ENERGY SOUTH CAROLINA GRID IMPROVEMENT INITIATIVE WORKSHOP National Context of Grid Modernization Coreina Chan, Rocky Mountain Institute August 14, 2018 M O U Y N K T C A O I N R I E N T S U T I T
The technological and economic factors underlying today’s electricity grid are changing rapidly nationwide Old Reality New Reality Large, centralized A growing array of distributed Supply generation resources energy resources (DERs) can provide least-cost energy provide energy and additional value to the grid Emerging distributed The distribution grid is Delivery generation technologies optimized for one-way flow of power, information, and create need for two-way flows value Customer load is projected Load growth is flat, but Demand to continuously grow, and increasingly dynamic considered uncontrollable 2
These changes coincide with evolving demands placed on the grid by customers, regulators, and other stakeholders Resilience Greenhouse Gas New Load Types Evolving Emissions Demands on the Grid Operational Transparency Efficiency Investment Efficacy 3
“Grid modernization” across the US is defined broadly to include a wide range of approaches to meeting these new demands Definition elements from nationally-focused research organizations: • “ a holistic strategy” – investments, business practices, regulatory reform • “highly context dependent ” – depends on the system in question Investment strategies Regulatory reforms and other activities • Rate design • Grid sensing, control, and • Business model updates coordination technologies • Other regulatory reforms • Energy storage • Hosting capacity / capability • Hardening, resilience, security • Customer-facing data systems 4
States are proceeding at varying paces of grid modernization Number of grid modernization actions taken by states in Q2 2018 5 Source: NCCETC, The 50 States of Grid Modernization: Q2 2018
Investments in the grid, including grid modernization efforts, have led to increased costs for energy delivery • Average retail electricity prices have stayed stable since 2006, while T&D costs have increased by >50% • No clear data on how much has been driven by “modernization” versus either routine or cyclical spending 6 Source: https://www.eia.gov/todayinenergy/detail.php?id=32812
Grid modernization processes face common tradeoffs between competing priorities, creating an opportunity for collaboration Differing outcomes Collaboration Common tradeoffs prioritized opportunity • Rate stability • Cost vs. benefit • Visibility • Reliability • Short- vs. long-term • Shared understanding costs and benefit • Resilience • Building trust between • Who pays and who individuals and • Economic development benefits organizations • Market animation • Speed versus inclusion • Find multiple benefits of • New technology a shared vision • ”Input” versus deployment “feedback” engagement • Environmental benefits 7
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Utilities have met these growing demands through various approaches Michigan requires utilities to hold cybersecurity trainings for employees and provide notifications as soon as Pacific Gas & Electric is a cybersecurity incident is detected using software to project the load impact of DER Arizona adopted an RPS of Resilience adoption at hourly intervals, 15% by 2025 and proposed down to the meter level a Clean Peak Standard Greenhouse Gas New Load Types Evolving Emissions Demands on the Grid Operational Transparency Efficiency Using automated feeder Entergy New Orleans partnered Investment switching, PECO avoided with 7 local non-profits to serve Efficacy 6,000 truck rolls and reduced as ambassadors for reaching service restoration times by out to low-income customers Xcel used analytics software to 2-3 days after Sandy regarding its grid mod programs gather usage data from transmission EMS & six coal plants, saving $46M over 6 years 9
Individual state statutes and regulatory bodies have defined grid modernization in a wide variety of ways Grid Modernization is… (i) “enhancing the reliability “Grid modernization (1) “reducing the effects of of the electrical grid; refers to computer- outages; (ii) improving the security of based control and (2) optimizing demand , the electrical grid against automation technology which includes reducing cyber threats and physical to bring current utility system and customer threats; electricity delivery costs; systems into the 21st (iii) increasing energy (3) integrating distributed century.” conservation resources ; opportunities by (4) improving workforce and facilitating communication -- Hawaii State Energy asset management.” between the utility and its Office customers” -- Massachusetts Dept. of Public Utilities 12-76-B -- Minnesota Statute § 116C.779(k) 10
Across the US, different elements of grid modernization are prioritized depending on circumstances “We define grid modernization broadly, including: new technology, infrastructure deployment; reforms to policy and regulatory structure; improved planning procedures; as well as updates to rate design and utility business models . “ Different terms of definition -- NC Clean Energy Technology Center from nationally-focused organizations “Grid modernization is the overlay of communication and control/coordination technologies onto the electromechanical grid, and appropriate investments are highly context dependent.” -- Pacific Northwest National Lab “Grid modernization is a holistic strategy to accomplish Despite different definitions, all of the following: more efficient use of capital along there is wide agreement with higher asset utilization; enhanced reliability, resilience and security; greater levels of energy regarding the attributes and efficiency; improved operational efficiency; and functionality a modernized grid reducing GHG emissions.” should have -- GridWise Alliance 11 Source: RMI expert interviews
Grid modernization efforts are composed of a wide variety of activities, including capital investment strategies Interstate Power & Light has a modest ($66m) program in IA with AMI, sensors and switches. Xcel CO will include Green APS selected Button CMD in its $350 Grid sensing, control& solar+storage over a gas coordination technologies million roll-out of AMI, DSM peaker plant to provide and integrated Volt-VAR peak hour capacity. optimization. Customer Facing Energy Storage Investment Data Systems Strategies Hosting Capability Hardening, Resilience / Capacity & Security CT Light & Power’s PECO Energy's $274 million program demonstration project with two includes microgrid pilots, underground parts 1) DER portal and cable replacement, substation management (2-way com) and retirements, and various other storm 2) hosting capacity analysis. hardening and resilience measures. 12
Massachusetts: A state-led process defining grid modernization goals to guide utility investments Commission orders grid-mod Overview of investigation, soliciting stakeholder Process feedback through workshops Utilities required to submit 5-year Grid Mod Plans (GMP) that outline plans & investments Stakeholder suggestions for improvement: • More rigorous cost-benefit analysis • More detailed project plans • Include distributed resources in addition to centralized grid improvements 13 Source: http://170.63.40.34/DPU/FileRoomAPI/api/Attachments/Get/?path=12-76%2fOrder_1276B.pdf
Massachusetts: A state-led process defining grid modernization goals to guide utility investments Reliability, resilience, and security Cybersecurity issues with AMI must be addressed using best practices Grid coordination and Enabling DER and control renewables AMI considered backbone 200 MW by 2020 storage Approach to of modern grid; must be mandate implemented within 5 years Grid Modernization Customer data and Cost effectiveness & experience assessing alternatives GMPs must include plans GMPs must include for marketing, education, business-case analysis and outreach to better engage customers 14
Hawaii: Utility proposals required to address unique state renewable portfolio standards Overview of Commission orders utilities to develop comprehensive grid-mod strategy for Process stakeholder review Initial utility plans were rejected due to cost concerns and insufficient integration of renewables Final proposal approved for addressing state portfolio standards:* • 70% renewable by 2030 • 100% renewable by 2045 15 * Hawaii’s grid has uniquely high DER penetration (26%), due to high costs of diesel generation https://www.hawaiianelectric.com/Documents/about_us/investing_in_the_future/final_august_2017_grid_modernization_strategy.pdf
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