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As renewables move towards being a major part of and,
eventually, the dominant resource on power grids, panelists at
CERAWeek 2022 by S&P Global said digitalization of grid
management will allow better use of transmission lines in real time
and support more efficient and reliable operations
The current US grid was designed decades ago for delivering
power generated by large coal- and oil-fired generation units along
high-voltage transmission lines. As nuclear and gas power joined
the energy mix, they were assimilated into the same model of
generating controllable amounts of power from a relatively few
sources, and sending it in one direction, from a generator to a
user. A grid operator's job (in simplified terms) was to anticipate
power needs a day ahead and schedule enough power to meet that need
irrespective of the source.
Renewables present grid operators with a different situation,
said David Carroll, chief renewables officer for ENGIE, a
Europe-based utility with operations around the world. The output
of each unit is smaller, there are more of them, and their
performance is less predictable and controllable.
These factors complicate the calculation of how much power will
be available at a given time, and it means that grid operators need
much more data from each power unit—and they need it more
quickly. Digitalization is the answer, and as operators get more
adept at using information in real time, they will be able to
finetune operations and continue to provide the reliability that
customers expect. The "shared nature" of information flowing back
and forth from generator to grid operator, to use Carroll's term,
can be turned to an advantage.
Nick Akins, CEO of American Electric Power, compared the old and
new to the difference between a simple mathematical equation and
"handling multivariate calculations."
"Data analytics will allow operators to have a much better
understanding of the system," Akins said.
Today, a grid operator might receive performance data coming
every 15 minutes from the inverters on a wind power unit, said
Laura Anderson, senior vice president, service controls and
digitalization for Siemens. "You have a 'live' understanding of
what's going on for the grid," she said, which enables real-time
adjustments to keep the grid in balance.
Avoiding unnecessary buildouts
Digital technology could enable greater utilization of existing
transmission line capacity in lieu of adding new power lines, said
speakers. With reliability always a core mandate for any grid
operator, it's not uncommon for twin lines to be installed on key
energy corridors to ensure service. A great deal of the US
transmission network is "100% redundant, literally parallel lines,"
said Chris Shelton, chief product officer, AES Next, the technology
development arm of power distribution company and utility AES.
Many parts of the transmission network never operate more than
one of those two lines, i.e., 50% of capacity. Shelton said that
situation can be changed. "Thanks to digitalization, we can
optimize grid operations, expand our utilization rates, and use
less capital," he said.
New technology allows for shifts of power from one line to
another in fractions of a second. "'Smart wires' can route power
around constraints [on the system]," he said.
This is in addition to a buildout of the transmission network
itself to serve new renewables installations, said Shelton and
other utility executives.
Operators will be able to incorporate artificial intelligence
(AI) as well, said Anderson. This is beneficial for power
providers, whether they use fossil fuels, renewables, or both, she
said. "Our customers need to think about how to pull their entire
fleet together … how to release which power to the grid. What is
the best value [at each point in time]?"
AI will grow in usefulness as battery storage becomes common on
networks, several panelists said. They described batteries as
"virtual capacity," that is, generation for peak periods on an
as-needed basis to avoid the need for new fossil fuel or renewable
power installations.
Rapid response to actual conditions also will enable system
operators to avoid load shedding, a scaling back of power to avoid
an overload of the grid. "In aggregate, peak-shedding is very
costly and [increases] pollution," said Yair Amir, professor of
computer science at Johns Hopkins University who also heads the
Distributed Systems and Networks Lab. "We're not here yet with AI,"
Amir said, but he said he believes it will reach a point when
energy production "can be optimized end-to-end."
Looking further down the line, as rooftop solar becomes more
common, digitalization will enable communication from home or
office rooftop units back to the grid operators, said Aamir Paul,
country president, United States, for Schneider Electric, a French
firm that provides energy and automation digital solutions for
efficiency and sustainability.
"Software allows the different sources [of power] to coexist,"
he said, blending the traditional, centralized power with
distributed generation. Schneider Electric estimates that up to 40%
of US energy production eventually come from a distributed
source.
But for distributed generation to work, "information flow must
be bidirectional," Paul said. "If we just [install] distributed
energy and have traditional generation [not communicating with it]
… then we are not optimizing."
Regulatory impediments
Unfortunately, the way that US utilities are paid for system
upgrades does not incentivize digital upgrades, said Jason Stanek,
a member of the state utility regulatory body Maryland Public
Service Commission (PSC) who also the chairs the Joint
Federal-State Task Force on Electric Transmission. Because
utilities go to their state regulators for approval to recover the
cost of new infrastructure—plus a profit margin—from
ratepayers, Shelton said they have an interest in larger, costlier
projects, especially when they are based on technology familiar to
regulators such as new transmission lines.
"If we have a $20-million digital solution that will have the
same impact as a $400-million transmission project, sometimes the
utility sees the more costly solution as providing a better
return," Stanek said. "As regulators, we need to encourage
outside-the-box thinking instead."
Yet regulators seem reluctant to approve an unfamiliar
technology, even if it saves money for consumers in the long term,
said Philip Moeller, executive vice president of the Edison
Electric Institute. "Regulators need to understand how these new
technologies allow more [power to] flow through," he said.
As the US electrifies sectors of the economy such as home
heating and transportation, power demand could double in some
regions of the country in the next 20 years, said Caleb Stephenson,
executive vice president for commercial operations at Calpine
Corp., the largest US generator of electric power from natural gas
and geothermal resources. At the same time, utilities, states, and
the federal government are eager to reduce carbon from power
generation by adding renewables. "We have to move quickly," he
said. "The pace of innovation has to increase."
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.