Over the last decade, the power industry has been working to build a better grid. First there was renewable energy, then the “smart grid,” and now the microgrid. As the grid has progressed, so has the attitude of the end customer, especially large-scale power users. For many electricity customers, having access to reliable, uninterrupted power whenever they want, for a relatively low cost, is what they consider a natural right. To fulfill that demand, grid operators must investigate and introduce new solutions to meet load demands and keep their customers satisfied. The large-scale power users are especially important because they represent significant portions of the load grid operators are responsible for, and they generate a lot of revenue for power providers.
It sounds simple right? But trust me, it gets trickier than just saying, ‘Yes, we will provide you reliable power.’ The large power users want it all: they want their power generation to be greener, they want it located closer to the them, and they want some governance over that generation.
As the large power users change how they want to consume and generate power, the residential user is fast following that trend. As the world waits for the grid to catch up to changing demands, consumers large and small are taking matters into their own hands. Personal rooftop solar, community solar, and community wind power are accessing the grid at an exponentially increasing rate. In response, many utilities are being forced to revamp their interconnection standards and processes.
The way it worked on the old grid, end users would buy power from the power company. In deregulated states, they now buy power from a power retailer—power delivered by a regulated power company. In the “open grid,” users are finding ways to cut out the power providers altogether. Installing a home battery pack and solar panels might be more expensive than paying a traditional retail or utility provider, but the user’s needs are met: the power is greener, it is closer to them, and they have governance over it.
With the next significant change already upon us, how is the industry going to react?
Thankfully, the opportunity to make changes at the grid level through utility-delivery providers is within our grasp. The costs of grid-scale energy storage, solar, and wind generation are falling quickly, putting the industry in a prime position to continue adding these generation assets to our grid. Simultaneously, we are seeing the price of retail power creep up, making these “greener” assets even more appealing. This widening gap creates the perfect situation where it becomes more attractive to generate power on the grid edge.
We are talking about significant grid changes from the old way of doing business, where the most efficient way, cost-wise, to provide power to many users was through a centralized power plant. These are large generation sites that have the capability to serve thousands of residential sites and hundreds of larger power users at once. This is not the business model for the open grid. Alternative, smaller generation sources are quickly coming down in price and challenging the marginal prices of the centralized power plants, and it’s time to reevaluate how the grid is designed.
If someone put 1,000 “utility-type” people in a room and asked how many thought there would be twice the distributed generation on the grid five years from now, at least 900 hands would be in the air. The other hundred would likely argue that five years was a bit too soon, but that distributed generation would certainly grow quickly on the grid in the ‘near future.’ The point is, the contention that distributed generation is essentially on its way would be a mostly unanimous one.
The emergence of the open grid is here, and it should be power providers’ five-year plan. Distributed generation—solar, wind, energy storage—exists now, but the real flood is coming. You can’t stop it, and you shouldn’t even try. It’s a little like Michael Jordan in his heyday. You couldn’t stop him; you could only hope to contain him.
These changes can’t be made at the drop of a hat. We have 100 years of established standards and investment to overcome. For the grid to accept the flood of additional distributed generation on its way, it first must undergo significant modernization.
Many utilities are deep into this process, some having made incremental, and even some wholesale, change for years. This is how we reached the “smart grid.” Reaching that level was about replacing older switches with smart devices having computing power and communication capabilities.
The old switches required a person to make a “call” on which switches should be activated and in what order, and then how to best restore the load. Another person then had to physically travel to the switch, manually operate it, and then move to the next switch to execute a restoration operation.
Smart switches can be controlled remotely or, even better, by using software that can make the decisions automatically. Within seconds, they can identify the best, quickest, and safest options to restore power to the largest number of people possible. The modernization of the industry began at the turn of the century and has certainly helped address sustained outages, but we still have a long way to go to get ready for the open grid.
Round One, which involves moving to smart switches to empower a smart grid, is a big step. But that step took about 60 years to start. I don’t think any of our power users—residential or commercial—are willing to wait that long for Round Two to start. That begs the question, what is “Round Two?”
Round Two is the move toward an open grid at the medium-voltage level. It involves the creation of a system that can solve the big consumer needs we’ve identified: better reliability and a greener environmental footprint, all at a lower cost. When the industry achieves the open grid, all feeders will be automated. This will provide the enhanced reliability because each feeder segment automatically will isolate faults and protect unaffected parts of the feeder.
For example, if six smart switches are on a feeder, a utility could end up with one bad segment and five segments that are fault-free. There will be no sustained interruption of service in those five segments and the substation. If the protection is done correctly, a utility could even eliminate momentary outages for those segments. There is no technology out there that will let a utility restore service on the faulted, or “bad,” segment without repairing the fault first, but a utility’s open grid would keep the power on for as many people as possible.
Let’s imagine another scenario, where a fault is preventing the feeder from accessing its main generation source. But this is an open grid with fully integrated automation and ample generation from a community solar farm on the same feeder. If the utility adds one thing—let’s call it the “spark,” which in this case would be an advanced grid controller—it could use the community solar farm to serve the segments previously without power. With the old grid method, and even the newer smart grid method, this wouldn’t work because the main source of power was isolated because of a fault.
Only in the open grid could the utility solve this problem. Automation and distributed generation are key factors that enable the open grid to have this higher level of reliability and a greener footprint.
We have the technology to advance the grid, so why aren’t we seeing more progress? This is the logical, unavoidable progression for how the grid will continue to improve: moving from centralized generation to decentralized generation, and then from standalone decentralized generation to an open grid where feeders have generation and advanced controls embedded. The open grid, with feeder-level microgrids, will satisfy the end user’s wants and needs. It will be greener, more closely located to the end-user, and more reliable. The best part is, this isn’t a hypothetical. The need for these changes is already being identified and solved.
Some of the more extreme grid locations, such as Hawaii, are paving the way for this change. Hawaii has two main issues with fossil fuels. For one, it’s an island paradise. Customers there don’t want emissions, and they don’t want to deal with diesel fuel. There other issue is, there is no naturally occurring diesel fuel on the islands, which makes it incredibly expensive. It was a logical decision to integrate a large amount of renewable generation at the utility and residential scale to avoid diesel costs and emissions.
This radical change, however, caused its own set of problems. Hawaii’s grid, like all old grids, wasn’t built to accommodate this flood of new renewable generation points. There had been no upgrades from the old grid to the smart grid. Utilities there needed to move directly from the old grid to the open grid to make significant advancements in grid automation and modernization. Soon, it will serve as a blueprint for others to follow on their journey to the open grid.
There are hurdles and challenges abound for this journey. One significant issue is ownership. In deregulated states, utilities can’t own the generation attached to the grid. They need to work within a third-party ownership model. Luckily, there are plenty out there. In a regulated state, where utilities are vertically integrated, a utility can own all the assets, which certainly makes the coordination easier to provide greener power and improve reliability.
Other states, such as California, New York, and Illinois, made investments in their grid in the last decade. Those and other states are now primed for the open grid. Illinois, for instance, soon will be one of the hotbeds of renewable integration thanks to the Energy Future Jobs Act that recently went into effect, creating incentives for renewable developers. Whereas Hawaii has the renewables but not the infrastructure, Illinois has the infrastructure, and the renewables are coming. Both states will end up in the same place eventually.
Make no mistake, change is coming. Start your journey today and get busy ironing out the details of your transition to your open grid.
It took us nearly a hundred years to move from the beginning of the grid to the smart grid. My guess is it will take 20 years or less to move from the smart grid to the open grid. But we are well on our way already.
About the author: David Chiesa is the Senior Director of Global Business Development at S&C Electric Company. In this role, David is responsible for the profitable growth of S&C’s market segments globally. This position is focused on expanding the reach of S&C’s products and services in the renewable, data center, microgrid, and reactive compensation market segments. Chiesa began his career in the U.S. Army, serving as a maintenance company commander, a general officer aide-de-camp, and the U.S. forces maintenance manager for the NATO troops conducting peacekeeping operations in Bosnia. He holds a Bachelor of Science degree in engineering from the U.S. Military Academy and Master of Business Administration degree from the University of Maryland.