Today’s grids—and the policies that govern them—are often out of sync with technological advances and consumer expectations for a clean, reliable energy system. Clean, local energy resources like energy efficiency, distributed renewable generation, and energy storage are tools that can solve grid problems instead of relying only on building expensive infrastructure projects. Sophisticated technology for tracking energy use can support innovations in how consumers pay and are paid for electricity, rewarding them when they use and produce energy at optimal times. Updated rules, planning processes, and financial incentives can enable the adoption of technologies critical to meet 2030 and longer term emissions reduction targets.
To take full advantage of opportunities to benefit consumers and advance emissions-reducing technologies, almost all of the rules and regulations governing the electric grid need to be updated. The present grid was designed at a time when power plants in central locations exclusively controlled a one-way flow of electricity to consumers. A modern grid needs to accommodate greater consumer control and two-way flows of power. Building the modern grid will require updating the rules that govern grid plans, energy markets, and financial incentives so that clean energy resources can flourish. Utility’s can earn money by achieving affordability and climate change goals. Grid modernization will provide the backbone that supports the carbon-cutting changes in all sectors.
Advanced communication and management systems can help customers control demand and manage usage, or load, to efficiently optimize the grid. These improvements will lower consumer energy bills, maximize the value of renewable energy generation, and reduce overall system costs. The modern grid will empower consumers to better control their energy use and costs, if it establishes fair rates for all consumers.
Optimizing energy usage allows us to reduce demand on the grid strategically, ultimately reducing the peak level of demand when the grid is most strained and expensive to run. Optimization can supply energy according to user needs and when renewable generation is available. Optimization can be accomplished through demand response, active load management, and energy storage. Acadia Center analysis shows that implementation of these approaches together could contribute a total of 10,000 megawatts (MW) of new resources to facilitate load optimization by 2030.
- Demand response (DR) provides the ability to reduce or shift energy consumption during periods of high demand. Traditionally, DR is done through coordination between utilities and large customers. Our forecast shows 4,000 MW of demand response is needed in 2030, twice the level of today, but close to the levels in the market ten years ago.
- Active load management (ALM) is similar to DR but automated so that large numbers of smaller customers can participate, often without a discernible change in service. Smart or programmable technologies make ALM possible. For example, automatically preheating a water heater when renewable generation is available helps optimize the grid and reduce the need for fossil fuel sources. Our forecast requires 1,800 MW of ALM by 2030.
- Energy storage, such as batteries, can store power and release it later. For instance, storage can bank solar energy produced during midday and release it after sunset. Electric vehicles can contribute to grid optimization through smart coordinated charging and storage. Our forecast shows 4,200 MW of electric storage is needed in 2030, equivalent to the battery capacity of just 26,000 Electric Vehicles.
These technologies have all been commercially demonstrated and are critical to optimizing use of the existing grid,1 which will better enable renewable generation to meet demand and reduce customer costs.