Jack Eisenhauer
10 Trends that Are Changing the Power Grid
Jack EisenhauerDecember 18, 2013

The electric grid has been changing over the past three decades to accommodate renewable power sources, distributed energy resources, and demand response. But expect the pace of change to accelerate due to a confluence of technical, policy, business, and societal factors. Here are ten trends that could have big implications over the next 10 years:

  1.  Growing use of renewable energy resources in the bulk power system
  2. Increasing integration of distributed energy resources in transmission and distribution systems
  3. Growing use of plug-in electric vehicles
  4. Increasing deployment and use of intelligent grid devices on both the utility and consumer side
  5. Changing regulatory policies that encourage low-carbon electricity options
  6. Increasing cyber threats across the power grid
  7. Greater economic consequences of power disruptions on businesses and residential customers due to increased dependence on the electric grid
  8. Changing utility business environment marked by new uncertainties regarding cost recovery, security liabilities, and non-utility players offering niche services
  9. Changing consumer expectations, including greater control over energy choices and privacy protection
  10. Dramatic increase in the analysis of data from smart devices, leading to new service offerings and cost saving opportunities

These trends will change the power grid as we know it in many ways. But perhaps one of the biggest changes is happening behind the scenes. Grid operation and control is becoming extremely complex and traditional architectures and controls are becoming less viable in this new environment. To accommodate non-traditional and intermittent energy resources, newer control methods are being adopted alongside traditional controls as a matter of practical necessity. However, some planners view this ad hoc approach as “emerging architectural chaos in grid control.”

One group that is working to address the issue of grid control is the GridWise Architecture Council. In October, the Council released a draft of its Transactive Energy Framework that outlines the challenges of advanced grid control and defines the attributes of transactive energy systems. What is that? The Framework defines transactive energy as “a set of economic and control mechanisms that allow the dynamic balance of supply and demand across the entire electrical infrastructure using value as a key operational parameter.”

OK, so what does this mean? The best analogy I can muster up is the stock market. Imagine a future in which millions—perhaps billions—of intelligent devices (your home air conditioner, dishwasher, water heater, etc.) constantly bid to purchase electric power based on price and desired function (e.g., indoor temperature), while millions of power sources (solar panels, windmills, gas turbines, etc.) bid to supply power at various prices based on their cost and availability. In the ideal world, all bids would clear at optimal prices and power would flow smoothly. However, unlike electronic financial transactions, the power grid delivers a physical product with outstanding reliability that we have come to expect. Ensuring grid stability, power quality, reliability, cyber security, and customer privacy while achieving economic efficiency becomes a major challenge for a transactive energy future.

What if we do nothing? Many believe this is not an option. Decisions are being made to accommodate intermittent energy sources, often in an ad hoc manner that could eventually compromise grid stability. In addition, many of the benefits offered by smart grid technologies and systems may be lost. To quote one research paper, “It is possible that in a few years all of the smart meters and wind farms installed today will be regarded as another ‘bridge to nowhere’ unless we create the right architecture to make use of these resources, which must include reliable market mechanisms.”