Gary Rackliffe, ABB Vice President, Smart Grids, North America
Electricity continues to be the most versatile and widely used form of energy, but fossil generation has also been a major contributor to carbon emissions. With growing awareness and global focus on mitigation, the challenge we face is to balance the demand for electricity with minimal environmental impact and optimized grid efficiency. This challenge has led to an influx of renewables into the grid, and wind and solar resources will become a significant source for electrical power generation in the future. There are clear policy shifts and disruptive developments such as the dramatic price reductions in solar PV and battery technologies that are helping to drive the change. Recent utility-scale auctions have closed with wind and solar PV generation priced at 30 USD/MWH or less.
Wind generation and its often remote locations, a significant increase in solar PV distributed generation at the grid edge, and the variable nature of wind and solar have created new supply side challenges. At the same time, we also see new demand loads like electric vehicles and data centers as well as smarter homes and buildings. All these complexities require the evolving power system to be increasingly flexible and interconnected, as well as more reliable and intelligent.
While the power industry has an increasingly strong focus on renewables, there are also initiatives around transmission grids, the digital grid, energy storage, and evolving business models as part of the future. These opportunities are driving the development of transmission grid investments, including HVDC and FACTS technologies. Grid investments also include more eco-efficient and resilient products, power quality and local grid stabilization technologies, service and asset health management solutions, as well as emerging innovations like advanced energy storage and strategically located microgrids. The key to managing this shift in power is the increasing digitalization and automation of the grid, the growing deployment of software and the convergence of information and operational technologies.
As part of grid modernization, the electric utility industry is now implementing the energy internet of things to optimize the grid of the future through operational control and data acquisition from grid sensors and monitoring. Utilities are upgrading distribution management systems to include SCADA, outage management, automated dynamic switching for improved reliability, and voltage optimization control to support grid efficiency. Distributed energy resource management systems are helping to integrate distributed energy resources such as solar PV, battery energy storage, demand response, and electric vehicle charging infrastructure. Utility analytics are emerging as strategic enterprise systems to leverage the available data for asset health management, grid performance analytics, and system planning.
As the generation mix continues to evolve and the industry invests in the digital grid of the future, customers will diversify and suppliers will differentiate to meet new needs. The evolutionary power market shifts are now underway, and utility customers will be capitalizing on the revolutionary bursts driven by dramatic technological advancements along the evolutionary path.