Recent extreme weather-driven outages around the country, and threats of more, make clear the urgent need to transition to a variable and distributed resources power system that eliminates the emissions aggravating the climate crisis, scientists agree.
As California's urgent call this summer for customers' help to reduce power demand peaks showed, it is also time to acknowledge this transition's potential temporary threats to reliability and costs, power providers and system analysts are realizing.
"Many don't understand the real intricacies of grid reliability and expansion," said Mark Ahlstrom, VP for renewable energy policy with NextEra Energy Resources and NextEra Analytics, who spoke to Utility Dive as president of engineering think tank Energy Systems Integration Group (ESIG).
The Biden 100% clean electricity by 2035 goal requires quadrupling the current annual rate of renewables build and sustaining that for 15 years, and "we always overestimate how much can get done in the short term," Ahlstrom said. "But I am optimistic because we also underestimate how much can get done in the long term."
Today's perceived power system stability will be transferred to a new system that "will eventually be just as stable," Georgia Institute of Technology Assistant Professor of Civil and Environmental Engineering Emily Grubert agreed. But meeting the challenges of the transition, when neither the present nor the new system is at full scale, "will require winning the trust of electricity users by being upfront about what's going to happen."
Studies like the Edison Electric Institute's The Road to Net Zero and Princeton University's Net Zero America detail ambitious goals. But there are already very real risks of unserved power demand for system operators in California, Texas, the Pacific Northwest, the Midwest and New England moving toward those goals, according to the North American Electric Reliability Corporation's (NERC) May reliability assessment of North America's power system.
To avoid popular and political pushback that could impede the energy transition's success, potential costs and outages from implementing new solutions should be acknowledged, multiple analysts said.
Reliability takes center stage
Parts of North America are at "elevated risk of energy emergencies" and the West's late-summer wildfire season will increase the risk to power system reliability, NERC reported in May. Power providers, regulators, system operators, and other agencies should therefore be maintaining "the highest vigilance," NERC cautioned.
California regulators ordered 3.3 GW of emergency generation in November 2019 and increased the planning reserve margin from 15% to 17.5% on March 25. But the state's own Summer 2021 assessment recommended "extraordinary" preparations and the governor in July issued an executive order to address unmet power needs.
Texas, still reeling from deadly and nearly disastrous winter outages, has increased its planning reserve margin from 12.9% to 15.3% and added 7,858 MW of wind, solar, and battery resources since 2020. But "demand from a wide-area heat event would likely lead to operating emergencies," NERC said. And the Texas system operator's Summer 2021 assessment raised similar concerns.
Extreme weather-driven above-normal demand could also exceed power system capabilities in the Midwest and New England, NERC reported.
The power system's rapidly changing resource mix is driving a "major transformation" that is creating "new opportunities as well as challenges" to reliability, NERC President/CEO Jim Robb told the Senate Energy and Natural Resources Committee March 11.
New risks "continue to emerge" and "severity of risks can increase," a June NERC draft overview of risk priorities co-authored by ESIG's Ahlstrom cautioned.
The transformation requires "a major rethinking" about "energy adequacy" for all 8,760 hours of the year instead of "just meeting predictable peaks," Ahlstrom said. That will require rethinking market designs and procurement approaches, and the "complexities" of integrating distributed energy resources (DER), he added.
Though power system operators may push back against this power system transition, traditional approaches to reliability, such as dispatching natural gas peaker plants, did not prevent the recent California and Texas outages, Ahlstrom said. And increasing change is the coming power system reality, he and others said.
Three realities – operations, cost, land
A net zero emissions power system will require new operational approaches, have real costs, and require land for new transmission and generation, power providers and analysts said.
Engineers are passionate about a successful power system transition, said former ISO New England executive and NERC consultant John Simonelli, now the managing director for power sector consultant Flashover. "Good engineers can solve the operational reliability issues with this transition."
But rigid mandates and policy goals, inconsistent reliability standards, regulatory litigation, and self-interested stakeholders "get in the way of engineers doing their job," Simonelli said. "People could suffer or even die as they did in Texas in February from going too slow."
But, he also acknowledged, "letting engineers do what is necessary, even if it postpones reaching goals, may provide more reliable solutions."
New uncertainties and threats to reliability must be acknowledged and confronted, Simonelli and others said.
"Policymakers and others are setting ambitious goals without necessarily knowing the engineering fundamentals," agreed Telos Energy founding partner and power system engineering consultant Derek Stenclik.
Engineers no longer see high renewables penetrations as uncontrollable, but today's inverter-based resources' non-synchronous frequencies could create reliability issues, he added. Today's power supply is largely central-station generators operating at a synchronized frequency, Stenclik said. As penetrations of non-synchronized inverter-based wind, solar and batteries rise, a failure to synchronize with the system could threaten reliability.
Reliability with high renewables penetrations will also be threatened without more resource flexibility and more resource locational and technological diversity, said Energy Innovation Senior Fellow Eric Gimon. "And that adds uncertainty."
Though many operators will be dissatisfied without traditional dispatchability, new operational and market approaches can protect reliability, Gimon said. The bigger danger is stakeholders "becoming so anxious about reliability that they double down on natural gas generation and create stranded costs."
Stranded assets and other costs concern many power system analysts.
Costs for new infrastructure and job training should be acknowledged, but those costs can be shared, ESIG's Ahlstrom said. And there will be benefits, like cheaper electricity and job growth. A national transmission system is "a national good because it is the basic infrastructure of a modern economy, and if taxpayers pay, we all come out ahead," he said.
"Like the interstate highway system paid for by taxpayers in the 1950s, transmission expansion will benefit the national economy and national security," agreed former ISO New England executive Simonelli. But it could raise customer rates if costs are not allocated broadly, he added.
A zero emissions transition across economic sectors also requires phasing out fossil fuel generation, Ahlstrom, Simonelli and others agreed. That could have significant rate impacts if not managed well, according to a July analysis by University of California, Berkeley, economists.
Building electrification will cause a 15% decrease in natural gas residential customers by 2030, and a 90% drop by 2050, studies by Princeton, U.C. Berkeley and others have estimated. That could mean annual bill increases for each remaining customer of $30 in 2030 and $1,600 in 2050, they calculated.
Bill increases would also likely "accelerate the transition away from natural gas," and customer exits would push higher rates to those without access to electrification.
But the transition may be eased because it is possible only about 15% of the fossil fuel generation and 20% of the jobs would continue to be sustained beyond 2035, a December 2020 study by Georgia Tech's Grubert found. Almost three-fourths (73%) of U.S. fossil generation "reaches the end of its typical life span by 2035," leaving only 27% stranded over the next 15 years, and policy can address those costs, Grubert concluded.
It is also time to acknowledge that high costs and intrusions on the landscape could impede public support for the acquisition of the massive amount of land needed for new transmission and generation, Stenclik, Simonelli and Gruber agreed.
It is critical that communities understand why land around them is needed for renewables and transmission, Stenclik, Grubert and others said.
Too many projects have been stopped or delayed indefinitely "when the hearts and minds of the public are led by the uneducated and the self-interested," former ISO New England executive Simonelli said. "States have their own agendas, which means FERC's federal authority or eminent domain may ultimately be needed."
"We need to be upfront that going from resources under the ground to resources on the land will change the landscape," Georgia Tech‘s Grubert said. "Communities need to understand they are gaining better air quality and cleaner water."
Communities will allow the transition if they understand and trust their well-being is not at risk, "which is why a universal support system is critical to success," she added. "The more we can do to protect their access to healthcare and jobs and their quality of life, the better the transition will go."
Demand-side resources will also be important, Grubert and others said. "Smart thermostats are a reliability solution" that can reduce the costs and landscape intrusions a transition could necessitate.
Utilities, their customers, and change
To fully achieve the energy transition, changes must also be made to include the demand side of the power system equation, stakeholders and analysts said.
Siloed supply-side thinking comes from regulators' focus on capital investment and on potential cybersecurity threats from DER, but customer-owned resources can unlock a lot of reliability, demand-side analysts and utility representatives said.
Customer-owned DER helped in the August 2020 California outages and in recent threatened "outages that weren't" in the Pacific Northwest, California and New York, said Rocky Mountain Institute Principal Mark Dyson. "Regulators can increase utility and aggregator use of customers' DER as a grid resource, minimize impacts, and allow compensation to customers for allowing their energy use to be managed."
But rising DER penetrations will also have costs and impacts that must be managed, utility representatives agreed.
The Sacramento Municipal Utility District (SMUD) plans to incorporate DER in achieving net zero power supply emissions by 2030, its March 2021 Zero Carbon report said. Building and transportation electrification are already moving customers to utility and third-party DER programs, but they will add new complexity and costs, SMUD Manager of Distributed Energy Strategy Obadiah Bartholomy acknowledged.
As Duke Energy moves toward its net-zero emissions by 2050 goal, "the potential for operational, economic, and infrastructure impacts are real, and the solutions for each are intertwined," Duke Energy spokesperson Bill Norton emailed. But events in Texas and California showed reliability must be "non-negotiable" and deploying and reliably managing distribution system technologies will be key, he added.
"Customers, elected leaders, and the public want a transition," Consolidated Edison Senior Vice President of Customer Energy Solutions Leonard Singh emailed. Beyond 2025, the energy transition will bring challenges, many unforeseen, and require new solutions, including smart distribution system technologies to manage new building and transportation electrification loads.
Surveys show there will be cost increases, and that a limited percentage of customers are willing to pay a small premium for clean energy, said Smart Energy Consumer Collaborative (SECC) President/CEO Nathan Shannon. "But very few are willing to give up reliability. Comfort is an explicit or implicit core value for 94% of utility customers and compromising it could create pushback."
And if customers "lean in" on cost saving opportunities from electric vehicles and smart thermostats, it could add another challenge, Energy Innovation's Gimon said. Recent news about customer complaints over utility management of their energy use "could just be poorly informed customers or lazy reporters looking for easy headlines, but it could increase pushback."
SECC recently found "the majority of customers can be engaged" by programs like those offered by SMUD, Duke and ConEd, Shannon said. And pushback might be tempered because the most recent surveys suggest "people are paying more attention to the public debate" about the need to address climate change.
The energy transition could be easier if "a crisis creates the pressure for change," Energy Innovation's Gimon said. "But we don't want people to die. A better outcome would be for everyone involved to be proactive."
It is not yet clear what the full impacts of the transition will be, Georgia Tech's Grubert added. "Denial gets all the attention, but what people are trying to protect is overlooked. We can either try to avoid harms or we can fail to do that, but if we want an equitable, clean energy system, we need to be careful about the transition."