April 18, 2024

The United States of Grid Modernization

John Greene
Policy and Regulatory Affairs Manager
The United States of Grid Modernization

Federal funding has accelerated the pace of the US energy transition in recent years via the IRA, IIJA, and the CHIPS and Science Act. A lot of the conversation has been focused on how we generate energy—will it be a future powered by offshore wind, hydrogen energy, or will distributed solar be the key to unlocking a carbon free future?

See here for the original article on Gridwise

The past few years have kicked off a flurry of activity in the US energy sector with federal funding helping to accelerate the pace of the energy transition. Initiatives such as the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), and the CHIPS and Science Act have ignited new discussions about the future of energy. The federal government may have helped ignite the conversation, however, the most impactful conversations shaping our energy future are occurring at the state level. Many states are exploring how to cultivate new clean methods of energy generation–However, it is the states that are critically examining how we cultivate a more modern grid that are leading the charge into the future (pun intended). 

In much of the country the grid is over a century old and it was designed for an energy system that is no longer relevant. Without grid modernization, the US cannot adequately accommodate the growing demand for renewable Distributed Energy Resources (DERs) needed to meet the federal government’s goal of achieving a carbon pollution-free power sector by 2035. The US Department of Energy estimates that the electric grid must more than double by 2035 to achieve the federal government's goal of 100% clean energy (a study from the National Renewable Energy Laboratory suggests we may need to triple the size of the grid). The findings are staggering, considering the cost, siting challenges, and construction time required for such a prolific grid buildout. The magnitude of the challenge serves to highlight the urgency of focusing on grid modernization in tandem with the expanding clean energy production capacity. 

We are in the age of smart technologies and artificial intelligence and there is no reason that these innovations shouldn’t bleed into how we operate our grid, that is the spirit of grid modernization. Grid modernization is the process of making our grid “smarter” and more resilient through the use of cutting-edge technologies, equipment, and controls that communicate and work together to deliver electricity more reliably and efficiently. This can mean integrating Advanced Metering Infrastructure, installing smart devices at the customer level, or utilizing software solutions like Piclo to enable grid flexibility through the use of DERs.

The United Kingdom (UK) is leading the world in the evolution of flexible energy because of the government's commitment to the cause. Regulators, system operators, and utilities have worked together to map out what the future can look like with a modern flexible energy grid. Together they have produced the research to support grid modernization and flexibility, established the mandate to modernize the grid, and created incentives that support grid innovation and performance. In 2021 the UK’s government and the system operator jointly published the Transitioning to a Net Zero Energy System report which predicted that the transition to a smarter more flexible grid would reduce system costs by up to $12.6  billion a year by 2050.

As the US aims to build the grid of the future, some states are at the forefront of grid modernization efforts as they implement innovative policies and programs. At Piclo, we are monitoring how US states are tackling grid modernization to see where there may be demand for smart grid flexibility. This tracking has evolved into a policy heatmap that qualifies a variety of state and utility policies to measure who is leading on grid modernization in the US. We quantify the seeds of grid modernization by measuring things like the ambition of a state’s renewable energy goals, if a state has DER host capacity models, places where utilities file grid plans, or where utilities consider non-wire solutions. Our mapping has made it clear who the leaders and laggers of grid modernization are. Places like Massachusetts, Colorado, New York, and California are at the forefront of the US’s grid evolution. Beyond their braider policies, these states are thinking consciously about how they want the future grid to operate.

Massachusetts is restructuring how utilities plan for the future through their Grid Modernization Advisory Council's (GMAC) process, at the end of January utilities in the state submitted their final Electric Sector Modernization Plans to the Department of Public Utilities, the state is pushing forward with transformative initiatives.

Colorado is in the process of launching a Virtual Power Plant (VPP) Pilot, exploring new avenues for grid flexibility and efficiency.

New York has had their head in the grid game since it launched its Reforming the Energy Vision in 2014. The state’s efforts have evolved into a number of programs like the Future Grid Challenge and the Distributed System Implementation Plans which showcase the state's commitment to modernizing the grid.

Never one to be a laggard, in California, the state set a load flexibility goal of 7,000 megawatts by 2030. The state’s largest utility, PG&E seeks to catalyze grid modernization through its Innovation Summit and Pitch Fest launched in 2023.

This list represents the start pupils but there are a handful of states focusing on grid modernization because they want to reap the benefits of innovation. These efforts will help them leverage the next wave of technology like Virtual Power Plants (VPPs), DER marketplaces, and transitioning to a distribution system operator system. The implementation of grid modernization strategies enhances the communication of smart grid technologies, enables energy flexibility, and ultimately enhances reliability for customers.

These states will be in the driver's seat as we race to build the grid of the future. These grid modernization mavericks will be best equipped to fertilize the seeds of innovation with government funding and by doing so they will control energy costs, increase grid reliability, and spur economic development in their states. Grid modernization is not some future set in the world of Tron; as the US strives to meet ambitious climate goals our success depends on building a modern grid in the present.

For more information on DER-enabled grid flexibility in North America register your interest

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