e21 Phase 2 Report: Grid Modernization

The basic design of the electric grid has remained largely the same since the first commercial power plant in the United States went into service in 1882. Electricity has for the most part been generated by large central stations, transmitted large distances over high voltage transmission lines, and then reduced in voltage for local distribution and delivery to customers. The vertically integrated system is now changing, evolving to be cleaner and more efficient and to integrate more renewable resources in a cost-effective manner. In addition, customers are installing their own electricity generation, whether on rooftops or through on-site power plants.

Today, the distribution system needs to be able to manage two-way flows of both electricity and information, taking in power and data generated from these customer sites and coordinating many more actors on the system. A modern grid must adapt to increasing distributed energy resources such as storage, electric vehicles, microgrids, combined heat and power, small wind, demand response, and other sources. In short, we are headed for a much more distributed, networked grid that needs to be able to respond to rapidly changing technologies.

Recognizing that a modernized grid provides many benefits to customers, utilities, and grid operators, the phase I report recommended that Minnesota:

1. develop a transparent, forward-looking process for modernizing the grid (which the Minnesota PUC has underway)
2. identify how to achieve a more flexible distribution system that can efficiently and reliably integrate cost-effective distributed energy resources
3. pursue opportunities to reduce customer and system costs by improving overall grid efficiency and better utilizing existing system assets (improving the grid’s load factor)

Toward these ends, the grid modernization white paper does the following: suggests an overall approach and a set of objectives for grid modernization in Minnesota, outlines the functions and technologies needed to achieve those objectives, and offers recommendations and next steps that can usefully complement the Minnesota PUC’s on-going grid modernization process.The five grid modernization objectives identified by the e21 group are:

Objective 1: Maintain and enhance the reliability, safety, security, and resilience of a more distributed, dynamic, and complex electric grid, as and where needed, through such things as establishing cost-effective, real-time ways to anticipate and fix problems on the system; mapping where on the distribution grid distributed energy resources can provide the greatest benefit and using price signals to encourage them to locate in those places; and deploying sophisticated communications technology to coordinate all of the actors on the electric grid while protecting privacy and ensuring cybersecurity.

Objective 2: Enable greater customer engagement, empowerment, and options, including the ability to manage and potentially reduce electricity costs for all customers, including through deployment of advanced meters and improved customer access to their own electricity usage data (usage and price).

Objective 3: Enhance the system’s ability to integrate distributed energy resources and other new products and services in a cost-effective and timely way, by such means as conducting thorough and regular distributed energy resource “hosting capacity” and “locational value” analyses, improving access to that and other relevant grid-level information, and updating Minnesota’s interoperability standards and interconnection processes.

Objective 4: Improve the environmental performance of electricity services, by creating a physical and information technology platform that can optimize the environmental performance of the electric system as a whole—drawing on all available resources to do so, from large-scale renewable generation to responsive customer loads—integrating more renewable energy into the system and better measuring energy savings from efficiency programs.

Objective 5: Promote optimized and cost-effective utilization of grid assets, through reducing peak demand and utilizing both customer-driven resources and the utility’s resources to meet demand at a given time, without overbuilding the distribution grid or power generation sources.

Download the e21 Phase 2 Report: Grid Modernization

You can also view other sections of the report by clicking the links below:

Full e21 Phase 2 Report →

e21 Phase2 Report: Performance-based Compensation Framework →

e21 Phase2 Report: Integrated Systems Planning →