An Energy Transition Roadmap for Electrical Utilities – Dimension 1
In the era of accelerating climate change, the path to a sustainable future is more crucial than ever.
Electrical utilities play a pivotal role in this transition, as they hold the key to decarbonizing our energy systems. Our blog series titled "An Energy Transition Roadmap for Electrical Utilities" will explore the multiple facets that utilities must consider in the Energy Transition. This series of blogs will form a comprehensive guide discussing issues from various perspectives – including system level, technical, financial, operations and maintenance, cyber security, as well as the application of Artificial Intelligence to the Energy Transition.
Whether you're a utility executive, policy maker, or industry enthusiast, this roadmap will equip you with the insights needed to navigate the complexities of the energy transition and contribute to a greener planet.
Defining The Energy Transition
What is the Energy Transition? The goal of the Energy Transition is to move away from fossil fuel generation on the production side of the Bulk Electric System and work toward using electric power to replace the use of fossil fuels on the customer side, e.g. electric cars and ground source heat pumps.
The ultimate Energy Transition goal for electric utilities is to have an electric power system that produces, on balance, zero or fewer Carbon Dioxide emissions from generation to customer. It allows for some emission producing resources (e.g. Natural Gas turbines for emergency use), as long as this is balanced by carbon capture and sequestration. For generation sources, this means producing almost all power using non-emitting resources that result in zero carbon dioxide production. Over time, producers of electric power will increasingly shift to non-emitting power production.
In parallel, customers will convert their processes from fossil fuel use to electricity use. For example:
- Transportation moves from gasoline/diesel to electric vehicles
- Space heating moves from natural gas and other fossil fuels to Air Source and Ground Source Heat Pumps
- Industry moves from fossil fueled to electrified and hydrogen fueled processes
- Restaurants and home/institutional kitchens move from gas cooking to electric cooking
The energy transition presents several significant challenges. Chief among them is the need for power producers to move away from fossil fuels while greatly increasing non-fossil fuel energy production. This is necessary to meet the growing demand for electricity, as customers increasingly shift from fossil fuel-based processes to electric alternatives.
The Energy Transition Roadmap
An Energy Transition roadmap for an electric utility is to define rational and achievable objectives that enable the utility to transition away from fossil fuels by continually increasing its emission free generation as its customers move to all electric processes.
There are many dimensions to an Energy Transition plan:
- Dimension 1: The Power System Dimension - Generation, Transmission & Distribution and Customers
- Dimension 2: Technical Dimension - Power System Monitoring and Control
- Dimension 3: Financial Dimension - Producers and Customers Market and Money Rules
- Dimension 4: Cyber Security Protection
- Dimension 5: AI Applications for the Energy Transition
- Dimension 6: The Details of an Energy Transition Roadmap
The rest of this blog discusses Dimension 1. Future blogs will cover the other dimensions.
Dimension 1: The Power System Dimension
Dimension 1 includes the following:
- Electricity production and storage
- Evolving customer electricity needs, including shifts in the technologies they use and how this can be controlled to assist the stability of the electric power system.
- Changes to the transmission and distribution system to enable the electricity to flow from its sources to its customers, including electric power sources/storage at the transmission, distribution, and customer level.
Dimension 1a: Electricity production and storage
How do you get from your current resource mix to a non-emitting mix of generation and storage? There are a lot of organizations around the world that are actively pondering this question and coming up with many scenarios. Some of them only focus on ensuring there is enough power capacity without considering the reliability issues. One can easily build a production system that is non-emitting with enough capacity to provide enough electricity. However, the problem is that there are sometimes long periods of time when the wind isn’t blowing and the sun isn’t shining. There must be a mix of resources that are available and controllable to ensure that power is available when needed, and that there are backup resources available for contingencies.
Most utilities currently have a mix of resources that involves some or all the following:
- Water power
- Fossil power
- Renewable resources (wind, solar, geothermal, wave)
- Nuclear
- Direct load/demand control
- Voluntary load/demand reduction
- Storage (Battery Energy Storage Systems or BESS, pumped water storage, other)
- Geothermal (in its beginning stages in most places, but California has 800 MW of it)
- Third party Virtual generators (that combine small renewables with customer load control and storage into a reliable capacity resource)
The following are emerging resources that are not yet available but are the focus of significant investment totalling billions of dollars:
- Hydrogen based generation – Some utilities are experimenting with a mix of natural gas and hydrogen at this time. The goal in future would be to have hydrogen made from renewable energy and stored for use in electric generation to provide power during intervals when the sun don’t shine and wind don’t blow. While the sun shines and the wind blows and there is too much generation, you make hydrogen and store it.
- Hydrogen would also be made for use in long distance trucking and for industrial high temperature processes.
There will also be a need for carbon sequestration facilities to not only remove carbon dioxide from the gas output of natural gas plants but to also remove it from the air. The article “Clearing The Air” in the November 2023 issue of National Geographic looks at many different approaches to removing carbon dioxide from the atmosphere and storing it somehow. Some of these systems are running on a smaller scale, but there are problems with them that are still being worked out.
Each utility needs to look at their current mix and envision what a future feasible mix would be, based on proposed plans, projections and industry research. The main objective is to plan for a resource mix that does not include fossil fuels, except as an emergency resource.
The second step is to look at what the projected costs would be for various scenarios of resource mixes. There are many BESS facilities in existence, so projecting costs for such facilities would not be difficult. Wind and solar can be easily costed. Nuclear power is in a transition phase where large plants are costing billions, and small modular plants are not yet built and working. The projected cost of those has gone up as well. Recent new Hydro facilities have also been very expensive.
There is much work being done and large sums of money being spent to figure out how to make it work.
| Challenges | Potential Solutions | |
|---|---|---|
| 1. System Stability | The existing system has large generators that come with heavy turbine-generator inertias that help the system ride through system contingencies. Renewable generation does not respond to faults with large currents. | The potential solution is to have large BESS(s) with Grid Forming Invertors that can provide simulated inertia and/or other large current injection supports to help the system remain stable during faults. |
| 2. Fault Response | Existing generation produces large current flow in response to faults that is used by relay protection systems to identify fault locations. Invertor based resources don't naturally provide such large currents. | Wind/Solar Farms integrated with BESS with Grid Forming Invertors could be set up to provide enough additional current to enable the relay protection to work correctly. |
| 3. Intermittent Renewable Resources | Supplying load with a large percentage of renewable resources that depend on wind and sun that is intermittent. | Use short term storage like BESS, Pumped Hydro, and others to fill in some of the hours when sun and wind is absent. Produce and stockpile hydrogen when there is an excess of renewable energy available so it can be used to generate power for the longer periods when sun and wind is not available. |
Dimension 1b: Customer Load
Determining the amount of capacity that will be needed to support customer load is another facet of the future plan. There are many good methods for projecting load growth for normal customer activities. However, there are new uncertainties related to the conversion of customer fossil based loads to electric loads. There is some experience and efforts to estimate the resources needed to support electric transportation. There is also now research available that estimates the capacity needed for switching from fossil fuel heat to Air Source Heat Pumps (ASHP) or to Ground Source Heat Pumps (GSHP) (which are more expensive but require less electric capacity). The uncertainty lies in multi-unit residential buildings and commercial and industrial facilities. However, there are ways to estimate these.
The much larger challenge is planning how to replace the fossil fuel energy used in industrial and institutional processes with electric energy (e.g. electric Arc furnaces) or to use Hydrogen, which requires electric resources to produce.
One of the goals of the customer estimate is to have a geographically based load and demand forecast. This may be more complex as more distribution customers add renewable resources, battery storage and load control. There are already many virtual power plants in existence using these resources at the distribution level. Virtual power plants can act like a production resource as well as a load control resource. This means that a feeder may have a forecastable load based on the customers’ electricity needs that should be considered the base load. This is the electric energy and maximum demand each customer will require when their Distributed Energy Resources (DERs), including generations sources, storage and controllable loads are not in service. The utility then must determine the capacity and location of DERs on the feeder. A given customer may have a maximum load consisting of their base load plus the load for charging their BESS when no other DERs are available. A customer’s minimum load would be their base load minus their DER supplied energy minus controllable load minus BESS discharging. The difference between maximum and minimum load could then be quite large. As customers electrify their transportation and add EV charging and electrified heating, this will greatly increase the load.
The main issue at the distribution level will be that the combination of load, renewable resources and BESS (large and small) will make it harder to predict the load profile over time. It may be relatively easy to project the peak loads and the valley loads, but how they vary over time will be complex. There may be market forces in place that send price signals that greatly vary how customers use their production and storage resources versus their own load. Cloudy days with no solar will likely mean higher loads, while sunny times may mean clients charge up their BESS and this may not result in lower loads. Many of the customers with renewables and BESS will participate in a Virtual Power Plant (VPP) that brings some discipline to how the customers will act.
In order to gain some control of the loads and resources, there will need to be a market that involves VPPs and complex customers not part of VPPs, as well as simple load-only customers (however, they may also have controllable loads).
| Challenges | Potential Solutions | |
|---|---|---|
| 1. Load Complexities | Seeking to understand and quantify the complexities of customer loads and how they vary. | Use smart meters to track hourly customer loads (or smaller intervals) and compare with weather using smart analysis tools and AI. Get customers to register their battery/solar and charging resources. |
| 2. Optimize Resources and Loads | How do you enable customers to optimize resources and loads while also helping to maintain a reasonable power profile for Grid integrity. | Implement a distribution market that incentivizes smoothing the load curve. Allow for Virtual Generators/Loads to be assembled by 3rd parties to play in the market. Market also incentivizes balancing load of feeder as necessary. |
| 3. Complex Power Flows vs Outage Response and Safety | The existence of numerous power sources will complicate how utilities respond to system outage and restore power using Smart Grid tools. | Smart Grid tools will have to become much smarter and there will need to be many more sensors. Utilities, customers and markets will have to agree to rules that ensure the safety of line crews while maximizing distribution customer uptime. |
Dimension 1c: Transmission and Distribution
For a long time, the power system consisted mostly of large power plants and some small ones outside of populated areas with transmission that connected from the plants to these areas. This power was then distributed to the loads in the populated areas. Now there may be many power resources away from the populated areas and many power resources within the populated areas.
There will be a need for many new transmission lines. Some of these will be for large renewable resources to transmit power a long way and may be DC transmission lines. There may be a need for trunk transmission lines around a large city to ensure that power can flow where it needs to. There will also be a need for BESS systems and perhaps synchronous condensers to provide for system stability.
Many customers are going to require an increase in the amount of electricity in order to replace the fossil fuels previously used. This may require upsizing the distribution system to handle the increased loads. However, it will also require handling two-way power flows within the distribution system. The distribution resources will consist of numerous small local solar facilities, some with local storage. There will also be controllable loads. Some distribution level industrial, commercial and institutional (ICI) facilities may have large controllable loads in addition to renewable facilities plus storage that can greatly affect the amount and direction of the local power flow.
The utility may need to upsize the substation transformers and customer transformers while greatly modifying the protection systems and safety procedures to handle the two-way flows. Subdivisions with electric cars, house charging facilities, and ASHPs may need upsized power cables. New subdivisions may be built with all houses having solar roofs, car chargers, ASHPs and local battery storage. Such houses may have large loads in winter when the sun isn’t shining, the battery isn’t charged while the ASHP is working, and the EVs are being charged.
Each distribution utility will also need to increase the capacity of each feeder to handle the maximum load and to have the flexibility to handle the minimum load and even two-way flows.
It will be harder to schedule generation resources when the load pattern is erratic or doesn’t follow a consistent pattern over the seasons. Markets may be put in place to smooth out the load. However, large amounts of storage may be able to smooth out the load enough to sustain grid reliability. One possible solution would be for every Transmission Substation to have a large Grid forming BESS (e.g. a storage resource that can support system reliability). This TS BESS would be used primarily to smooth out the distribution load profile while enabling the local distribution power market to function. The TS BESS would also be able to contribute to Grid reliability when there are contingencies (e.g. a system fault that means a large loss of generation or load) that affect the stability of the Transmission Grid. Grid operators will need to develop new approaches to responding to contingencies; having the TS BESS could be part of this.
| Challenges | Potential Solutions | |
|---|---|---|
| 1. Load Electrification | Each utility will have to increase the capacity of its whole system as the load grows and changes. |
|
| 2. Two Way flows | Substations will need to handle two way flows for times when there is more DER output on a feeder than load. | This will require new protection schemes at the substation to handle reverse flows. There will need to be additional schemes at the transmission level to handle the complexity at the distribution level. |
| 3. Manage flows for stability | The Transmission to Load interface will be more complex and varying. | Transmission utilities may need to get more involved in managing where power goes to maintain system stability and balanced flows. There may need to be a power market that incentivizes power being exchanged at different times in different ways to support system stability and maximize the use of renewable resources. |
The Energy Transition is not just an aspirational goal for electrical utilities—it's a critical imperative for the long term future of our planet. As we have outlined in this roadmap, the Energy Transition is complex and multifaceted, requiring a blend of innovative technologies, strategic planning, and collaborative efforts. For utilities ready to embark on this transformative journey, the right support and expertise are essential. Acumen specializes in guiding utilities through every step of the Energy Transition, from initial assessment and strategic planning to implementation and continuous improvement.
