Smarter solutions seen necessary to modernize power grids, promote equitable transition

Power grids across the globe are not ready to handle the expected growth in distributed energy resources over the coming decades, a grid expert said June 22. But with the right investments and policy incentives, the grid of the future could offer multiple societal benefits including an affordable and equitable energy transition, a power company CEO said.

The International Energy Agency projects global generating capacity from solar PV and wind to overtake natural gas as early as 2023, and coal by 2024. As such, energy systems around the world are poised to become more decentralized as a number of countries have also made commitments and set ambitious agendas towards achieving a net-zero carbon future.

Asked during the Reuters Global Energy Transition conference June 22 whether grids were ready in terms of flexibility, security and maturity to take on higher penetrations of renewable and distributed resources, Siemens Smart Infrastructure CEO Sabine Erlinghagen said they were not.

Distribution system operators and others around the globe as well as studies and market research had all come to the consensus that 90% of power distribution systems were not equipped for the energy transition, she said. And conventional means of grid expansion and updates would not suffice to prepare those grids in a timely or economical manner, she added.

The sector must look to "smarter ways," she said, suggesting, for instance, the use of meter data beyond billing purposes but to create transparency for better system planning.

"There's huge potential for smarter solutions for getting the grids ready," Erlinghagen contended, starting from the moment interconnection requests come in and with grid stability, resilience and economic viability in mind.

Pedro Pizarro, president and CEO of Edison International, said system operators would need to take on the role of "coordinators" rather than "controllers" of the networks. "We need different tools for grid planning, design and operations," and to be thinking about overall reliability, resilience, resource adequacy, safety and cybersecurity while addressing climate change impacts and risks, he said.

'Regulatory push, marketplace pull'

"We're probably going to need a combination here of regulatory push and marketplace pull that provides appropriate monetization for the benefits that each device is bringing to the grid," he said, adding that "this isn't just about decarbonization."

He contended that the physics tied to greater electrification compared with traditional fossil fuel combustion and the conversion to mechanical energy allowed for more efficient power production that would drive affordability for customers.

"We believe that our average customer in California will be spending 1/3 less of their wallet on energy than they do today by the time they get to 2045," he said.

"So, that means that this transition can not only be affordable, but it can be equitable, as we think about needs across society."

Analysis by Edison International found that meeting California's net-zero carbon goal by 2045 would take an estimated addition of 80 GW of bulk power renewables, and 30 GW of bulk power storage, complemented by 30 GW of distributed energy resources like wind and solar and 10 GW of distributed storage, much of which would be behind the meter.

Achieving that is expected to "require about $175 billion of investment across the economy and another $75 billion to bolster the wire system to be able to share all that," Pizarro said.