Managing Grid Stability and Transmission Congestion
The New York subway officially opened in 1904, yet after more than 100 years, it has remained relatively the same – effective still, but little changed. Similarly, the U.S. power grid traces its beginnings to more than a century ago, and in many ways it’s not tremendously different today than it was then.
While the grid has arguably been a marvel of engineering ingenuity for decades, we’re entering into a new era. The upkeep required for the aging U.S. infrastructure, the rise of renewables, the creation of new technologies and the continuing high levels of consumer power needs all lead to one place – the grid is facing evolving and increasing demands, and nothing is going to change that.
Slowly but surely, the electricity industry is transitioning to a smart grid that will allow for more efficient operations with better features and functionality. With a smart grid, we can have a more responsive electrical system that can make adjustments in real time, prevent potential outages, and be better suited to accommodate the growing impact of renewable energy.
However, remaking the grid requires significant time and an enormous capital investment, especially considering we need to account for what power demands and plant inputs will be not only for tomorrow, but for the next half century or longer. With technology rapidly shifting, we must have a grid that can adapt, expand and repel hackers as well as be more efficient as society’s requirements change.
Companies are working hard to modernize the grid. For example, Pacific Gas & Electric Co. (PG&E), one of the largest combined natural gas and electric energy companies in the U.S., is committed to reaching a 55 percent renewable energy target in 2031.
Even so, as we migrate to a smarter grid and continue to increase the amount of renewable energy sources used to power the U.S., there clearly will be challenges to overcome.
Supply and Stability
At this point, the data is clear that coal is losing share in the marketplace, with natural gas accounting for 34 percent of U.S. electricity in 2016. At the same time, zero-carbon sources will be pressed further into action by some states, cities and private enterprises, with or without the Paris Agreement. Unquestionably, coal-fired plants have several years left, but their detractors and low natural gas prices are making for a difficult existence.
Nuclear power, which has never lacked for critics, is today around 20 percent of U.S. generation, but as we go forward these plants appear far more likely to be decommissioned, such as Vermont Yankee, than appreciated as a source of clean generation that should be added in greater strength to the grid. Only recently, word emerged that Pennsylvania’s Three Mile Island might be taken offline in only a few years. We may hear more of this in the near future.
Where does this leave us? Green energy receives a great deal of backing, politically and in the press, but making a switch is anything but simple. A not insignificant worry about renewable energy, in particular wind and solar, is that the supply side isn’t consistent and there can be substantial fluctuations in the amount of power produced. If producers generate too much power, they can be facing negative pricing situations.
To have a stable grid, the U.S. system will need the right resources to keep the system operating at a generally even level of supply and demand. However, power that’s produced today can’t currently be stored in significant amounts, although that’s changing as new ways of storage are explored and enhanced. This may be one of the most fascinating components of the energy space, as Morgan Stanley has predicted the power storage market may increase from less than $300 million a year to $4 billion in the next two to three years.