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Clean energy journalism for a cooler tomorrow

Inside the GridWise Alliance’s plan for $50B in federal funding for the grid edge

Utilities and tech vendors target the gaps between large-scale clean grid investments and EVs, smart buildings and distributed energy.
By Jeff St. John

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The Biden administration’s American Jobs Plan includes $100 billion to boost the buildout of high-voltage transmission grids to connect massive new amounts of wind and solar. It also includes $174 billion for electric vehicle development and $50 billion to boost resilience against climate-change-induced natural disasters.

What’s missing from this plan, at least so far, is funding to modernize the part of the grid that bridges those two realms. More than 3,000 investor-owned, public and cooperative utilities across the country operate roughly 5.5 million miles of distribution grid circuits that connect high-voltage substations to end customers, as well as the hundreds of millions of transformers, grid control devices and electric meters that keep them humming.

That’s the part of the grid that the GridWise Alliance wants to bolster with $50 billion in federal spending over the coming years. The funding target is more than five times the scope of the Department of Energy’s smart grid investment grant program in 2009 and 2010 that it’s modeled on, which drove the first big wave of U.S. utility grid modernization, from smart meters and grid automation networks to smart thermostats and grid batteries.

But Karen Wayland, GridWise Alliance president, said in an interview last week that $50 billion is in line with the major grid transformations needed to meet the Biden administration’s target of a zero-carbon grid by 2035.

The needs are so great,” she said. The Biden administration’s call for 500,000 EV charging stations by 2030 will demand parallel investments in the grid to get the network ready for all these charging technologies,” she said. Likewise, we’re assuming that under the $50 billion for resiliency” the Biden plan outlines, there will be a lot of microgrids. What does the grid need to accomplish all of this?”

The allotment of hundreds of billions of dollars in grid investments laid out in the American Jobs Plan doesn’t clearly line up with the distribution grid investment needs that GridWise’s utility and grid technology vendor members say are needed to hit the decarbonization and electrification goals it lays out, Wayland said.

What’s more, the roughly $35 billion in energy provisions in the Covid-19 relief bill passed by Congress in December did not specifically set aside funds for distribution grid infrastructure and technology deployments, though it did include about $2.35 billion in smart grid research and development.

GridWise has structured its $50 billion plan so that it won’t require new legislation to create new programs, Wayland said. But that will mean bumping up the funding significantly” through existing DOE offices and initiatives.

GridWise’s utility and corporate members obviously have a lot to gain from a federal matching grant program at the scale being contemplated. But so do the utility customers that would otherwise have to shoulder the cost of these investments in state-regulator-approved utility rate cases, said Gil Quiniones, the alliance’s chairman and president of the New York Power Authority public utility.

Bringing federal matching funds to these projects creates headroom for utilities, so they don’t have rate shocks,” Quiniones said. The group has lined up a coalition that includes the International Brotherhood of Electrical Workers and Utility Workers of America labor unions, as well as environmental justice groups including the Natural Resources Defense Council and the Climate Justice Alliance, he said.

There’s value in mitigating the rate impacts of rising distribution grid costs, he said. U.S. utility investments in their distribution systems are rising at a pace faster than historical rates, according to research from the Energy Institute at the University of California at Berkeley’s Haas School of Business. At the same time, designing distribution grids that can capture the value of distributed solar and batteries could significantly reduce the distribution and transmission investments needed to achieve a zero-carbon grid, as indicated by recent modeling from Vibrant Clean Energy.

Technology to create flexibility on the grid edge

GridWise wants to target $5 billion for DOE’s Smart Grid Investment Grant Program — the same program that funded nearly $4 billion in grid technology investments during the Great Recession. GridWise also wants to add $2 billion in borrowing authority for federal power marketing administrations such as the Bonneville Power Administration, which manage hydropower and transmission for large swaths of the country, to help public and cooperative utilities.

While last decade’s funding was largely aimed at hardware to be installed on the grid, this new wave is more directed at enhancing grid flexibility, Wayland said. That’s a key characteristic of power grids that can adapt to the increasingly unpredictable surges and sags in solar and wind power as they grow to a primary energy resource.

Tech solutions include sensors, data analytics, advanced power controls and energy storage, and the software to control all those things,” she said. A major focus will be on enabling distributed energy resources such as rooftop solar, behind-the-meter batteries, EV charging and responsive loads like residential and commercial water heaters and air conditioners, or industrial and agricultural refrigerators and water pumps.

Wood Mackenzie predicts that $110 billion in cumulative investment through 2025 will enable more than 380 gigawatts of flexible distributed energy resources (DERs) across the country, making them a vital resource for balancing the grid. The Federal Energy Regulatory Commission’s Order 2222 directs the country’s transmission grid operators to integrate DERs into their wholesale energy markets.

Technologies to monitor and control DERs are lagging behind their proliferation on the grid, however. DER management systems are very complicated to put into practice, pushing the boundaries of how utilities interact with their customers. They also carry high upfront implementation costs that can be hard to justify passing on to ratepayers, particularly if the benefits won’t be realized for years to come.

Grid modernization, from smart meters to EV integration

The same challenge has emerged for simpler, more foundational technology implementations, such as expanding smart meters to utilities that haven’t already rolled them out, Wayland noted.

GridWise’s plan calls for $1 billion to achieve full smart meter deployment across the country, along with $2 billion for advanced communications networks for investor-owned and public power utilities, plus another $1 billion in borrowing authority for the federal agency that supports rural electric cooperatives.

In the past few years, regulators in Massachusetts, Virginia, Kentucky and New Mexico have blocked multimillion-unit smart meter deployments over cost-effectiveness concerns. Similar concerns have led to pushback against costly utility communications networks, like the fiber-optic network that Tennessee public utility Chattanooga EPB deployed with 2009 stimulus grants.

But you can’t do massive electric vehicle deployment or take advantage of FERC Order 2222 without smart meters,” she said. The Biden administration’s plan to direct $100 billion to expand broadband internet access nationwide could help boost utility communications capabilities as well, she noted.

As for integrating electric vehicles and the grid, EV charging could double typical household electricity loads and significantly increase costs for utilities if not managed to avoid adding to peak loads. EV fleet charging for trucks and buses will require managing grid interconnection for loads in the tens of megawatts range.

GridWise is proposing a new $500 million demonstration and deployment initiative that represents the only thing we’re recommending that’s slightly new,” Wayland said, in that it doesn’t already have a clear set of DOE programs supporting it.

Grid-interactive buildings, resilience and cybersecurity

Not all of GridWise’s plan is centered on utility infrastructure. A significant portion is aimed at enabling their customers to interact with the grids they’re connected to.

DOE is already active on this front through its Connected Communities program, which has funded dozens of projects across the country combining high efficiency buildings, appliance electrification and DERs. But more work is needed to link this building-by-building energy flexibility capability with the needs of utilities and grid operators, Wayland said.

We ought to make sure every building has a modern energy management system,” she said. GridWise is calling for $3 billion for installing grid-integrated energy management systems in federal buildings, another $3 billion for state and local buildings, and $1 billion for state block grants that boost rebates for grid-interactive appliances.

The same building-level work can also support the Biden administration’s push to increase resiliency against extreme weather events, she said. Climate change is worsening the threat of grid disruptions, as wildfire-driven blackouts in California and the massive cold weather-driven power outages in Texas have driven home in the past year.

GridWise is targeting $2.5 billion in military and federal building investments, along with $1.5 billion in federal public housing spending, to increase on-site resilience against these disruptions. It’s also proposing that $18 billion in DOE State Energy Program funds be allowed to be used for grid-integrated resiliency efforts, including transmission and distribution planning. Another $500 million would go toward wildfire prevention technology of the kind being rolled out by California utilities at a cost of tens of billions of dollars over the coming decade.

Cybersecurity to protect an increasingly networked energy system is another priority. Years of reports on cyber intrusions into U.S. utility networks have ratcheted up in the past year. The SolarWinds hack believed to be the work of Russian intelligence agencies has exposed swaths of critical infrastructure, including large parts of the federal government. Ransomware attacks such as the one that shut down a major U.S. pipeline network this week indicate how intrusions can lead to active disruptions of energy supplies.

GridWise has proposed $2 billion in federal spending to combat this threat to U.S. utilities, including $500 million to train the workforce needed to combat it, another $500 million for cyber threat monitoring for small and medium-size utilities, and $1 billion to deploy cybersecurity technology.

This is everything from advanced firewalls and software” to catch intrusion into utility information technology systems, to hardware on critical operations technology” that runs grid controls, Wayland said.

This could help in tasks from detecting hackable components inserted by government spy services into bulk power equipment — a threat identified by the Trump administration last year — to preventing hackers, insider threats and even mistakes from operators” from setting equipment to act outside its normal operating parameters, as a hacker is suspected to have done to a Florida water treatment plant earlier this year, she said.

GridWise is working with members of Congress who’ve led previous grid modernization spending pushes, such as Sen. Maria Cantwell (D-Washington) and Rep. Paul Tonko (D-New York), Gil Quiniones said. The group will also be enlisting other organizations that have been modeling the investments needed to achieve a zero-carbon energy system, from industry groups like the Electric Power Research Institute and consultancies like The Brattle Group to research organizations such as the National Academies of Science, Engineering and Medicine and Princeton University.

We’ll bring four or five of them in a room and ask them, What’s the common denominator?’ ” he said. What’s the estimate for X dollars to Y dollars to modernize the grid to achieve all the ambitions of the Biden plan?”

(Lead photo: Sigmund) 

Jeff St. John is director of news and special projects at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging and more.