Charging Ahead with Electrification: It’s All About Assets
As we all know, our energy system is facing some major challenges. Affordability continues to be top of mind for many, and grid reliability concerns in the face of load growth also loom large, whether that growth is coming from new data centers and manufacturing or from the steady adoption of electric vehicles and heat pumps. At the same time, our aging distribution system is in need of reinvestment and modernization, creating a situation where a business-as-usual approach to meeting growing demand (utility capital investment) is neither economically sustainable nor fast enough. Not only does our resource and technology mix need to change, but how we approach these challenges needs to diversify as well. Put simply, there is too much to do for us to expect our energy utilities to address our complex energy system challenges on their own; rather, we need to find ways to collaborate across multiple groups of stakeholders to bring a diverse set of solutions to bear. We also need to be able to bring solutions to market that can be deployed quickly and have near-term impact while setting a solid foundation for longer-term solutions to take hold.
This is why we formed the CHARGED Initiative, along with our partners at RMI and GridLab. We all believe that there are significant untapped opportunities to address the electricity system’s problems in ways that provide clear benefits to customers and that will also drive value for utilities and the advanced energy industry.
As CHARGED enters its second full year, we’re very excited to share three new reports that we think will contribute to the solution set. These include a Geographic Information Systems (GIS) best practices guide for utilities, a flexible grid connection implementation guide for utilities and regulators, and a report outlining the technical and regulatory considerations for a proactive investment framework. All of these reports, along with accompanying fact sheets, can be found in the CHARGED Resource Library.
While these three topics may seem quite different from one another, there are important linkages between them. In a word, these three reports are all about assets, and more specifically, utility distribution system assets. Steadily rising capital investment in distribution infrastructure over the last two decades has been a major contributor to rising retail electric rates. Getting more out of utility distribution system assets, whether existing or new, is therefore key to meeting load growth in a timely manner that also slows the rise in electricity delivery rates and ultimately begins to lower them.
GIS is all about assets – where they are, what their condition is, and how they’re connected to each other. Our GIS best practices guide describes how utilities can leverage GIS to improve how they plan, manage, maintain and operate their distribution systems, regardless of whether they are just starting to deploy and use GIS, or are farther along in that process. It is based in large part on in-depth interviews conducted with GIS users across multiple utilities.
Flexible grid connection is all about getting new loads connected to the grid without having to wait for costly investments in distribution capacity. If grid constraints are preventing new loads from connecting at their rated capacity, and upgrades may be years away, working within those constraints can speed new load connections, allowing companies to move ahead with plans for electrification on their schedule, according to their business needs. This approach mitigates the rate impacts of adding new grid capacity while spreading existing costs over ever-growing electricity sales, driving down retail rates for everyone. There are multiple flexible grid connection approaches that utilities can adopt, and our flexible grid connection implementation guide and associated webinar recording provide detailed information on how to make flexible grid connection a reality.
Proactive investment is all about getting ahead of future load growth in a responsible way; that is, how to best balance the need to invest in grid capacity with the uncertainty inherent in future load growth. By adopting better load forecasting techniques and working with well-established regulatory principles, like prudency, utilities, regulators, and other stakeholders can implement approaches to adding grid capacity that balance the risks of either over- or under-investing in the distribution system. If done well, adding capacity using a proactive investment framework can improve overall asset utilization and lower the total investment required to meet new load. If done in conjunction with flexible grid connection and distributed energy resource solutions that increase load flexibility, the end result can be a more cost-effective system that is better able to serve evolving customer needs in a timely manner.
Want to learn more about proactive investment and how it can support distribution system planning and investment while balancing varying degrees of uncertainty? Register to join us for our upcoming webinar discussion, Charging Ahead with Electrification: A Proactive Investment Framework, on Tuesday, February 24.
As we continue to develop more solutions through our CHARGED Initiative, you can expect us to remain focused on ways to get more out of distribution system assets. We are planning to further explore the interrelated issues of asset utilization, risk management, and grid flexibility, so that we can continue to offer practical solutions to some of the grid’s most pressing problems.