EDITOR'S NOTE: This is the first of a two-part series. Next up, "Coordinating Grid Evolution."
The transition towards a full-featured, modernized electric grid is underway as the power industry adopts changes in technology, operations, customer relations and business models.
If Grid 3.0 remains somewhat obscure, it’s because the details are still being defined and its implementation will look different at different utilities. Still, an increasing number of individual states, cities and utilities are making valuable progress in designing and building Grid 3.0.
If we define Grid 1.0 as the technology and policy models of the 20th century, Grid 2.0 would be defined as a grid with significant upgrades to equipment such as transformers, meters, relays, etc. A “modern” grid is often thought of this way.
The future grid would be described as implementing systems with foundational information and communications technology, advanced monitoring, control and automation features, increasing integration of distributed energy resources and interactive engagement with its customers. The grid of tomorrow focuses more on modernizing processes than just equipment. Parallel policy innovation will be needed to support such a system, encourage innovation and reward performance.
As noted, progress toward a modern grid will take diverse routes. With more than 2,000 municipal, 180 investor-owned and nearly 900 cooperative electric utilities in the U.S., all with their own legacy infrastructure and diverse customer bases, business models and priorities, every grid modernization roadmap and its supporting business plans will be relatively unique.
What does progress towards a future grid look like?
The most recent Grid Modernization Index or GMI provides a useful measure of progress. The Gridwise Alliance uses the index to make state-by-state rankings based on three broad categories: state support (plans and policies that support grid modernization), customer engagement (based on rate structures, customer outreach and data collection practices) and grid operations (technology deployment).
A glance at the major developments noted by the latest index illustrates the diversity of efforts as well as the potential for knowledge transfer between stakeholders:
California now requires IOUs to submit distributed resource plans for how they’ll value distributed energy resources as distribution grid assets.
New York’s landmark Reforming the Energy Vision proceeding is focused on creating a retail market to leverage distributed energy to optimize the grid.
Hawaii increased its renewable portfolio standard to 100 percent by 2045, even as local utilities struggle to integrate increases in rooftop solar, storage and other distributed energy.
Many other states are similarly, prudently, moving ahead. Clearly, each of these efforts represents ambitious forward movement, while posing obvious challenges – a common characteristic of efforts towards Grid 3.0.
With most grid work focused on the distribution system, state regulators and stakeholders must take the lead, which means that sometimes efforts differ in 50 states and the District of Columbia.
This diversity can be a strength, as long as best practices are shared. The Energy Independence and Security Act of 2007 supports and encourages customer-centric innovation across the grid. It is up to all stakeholders in the power industry to collectively move forward.
Steve Hauser is chief executive officer of the GridWise Alliance.