October 11, 2017 Grid modernization: Incorporating smart technologies Shawn White, Xcel Energy Mark Dyson, Rocky Mountain Institute Greg Adams, Salt River Project Joanne O Neill, CLEAResult
What has your research revealed about the market for grid modernization? How is this applicable to utilities across the country? Technology
The U.S. grid is aging, with 50% of thermal capacity expected to retire by 2030 GW 1,000 900 800 700 600 500 400 300 200 100 0 Existing US thermal generating capacity retirement outlook Operating in 2016 Source: RMI analysis of U.S. EIA data Nuclear Coal Gas Operating in 2030 Retirements through 2030 Average US coal, natural gas, and nuclear capacity is >30 years old Approximately 50% of these units will reach unit type-average retirement ages by 2030: Coal: 54 y Nuclear: 45 y Gas: 30-50 y 3
Business-as-usual reinvestment would require >$1 trillion in Capital investment through 2030 $billions $1,200 $1,000 $800 $600 $400 $200 $0 Base-case US grid capital spending, 2017-2030 Replacing retiring generators on a like-forlike basis would require ~$500 B through 2030 Forecasts of transmission and distribution investment need suggest a combined $500-600 B on network investment Source: RMI analysis of EEI, SNL, IEA, EIA data 4
Redirecting utility investment towards new solutions can get ahead of the problem, at net cost savings AVOIDING INVESTMENTS IN NEW FOSSIL GENERATION AND PRIORITIZING RENEWABLES AND DISTRIBUTED ENERGY RESOURCES CAN HELP UTILITIES MEET CUSTOMER NEEDS AND PRIORITIES AT LEAST COST AND RISK $billions $800 $700 $600 National net present cost implications of distributed grid infrastructure transition, 2017-2030 DER capex Total ~2-5% cost savings $500 $400 $300 $200 $100 Opex Gas capex Reduce gas capex & opex by $370 B, saving 3-4 billion tons of CO 2 by 2030 Utility-scale renewable capex Invest $350 B in new renewables and DERs $0 Preliminary Source: RMI, forthcoming publication Business-as-usual Plant capital Gas burn Renewables DSM Total Reduce gas generator costs Redirect capital 5
Given all of the changes in the market, how can utilities best take advantage of the opportunities and/or downsize risk? Technology
What is the biggest obstacle inhibiting your organization from leveraging non-wires alternatives to defer infrastructure investments? Policy
Utilities across the country are testing new approaches to infrastructure investment Source: RMI; not a comprehensive list pilot/demo illustrating DERs and/or renewables as grid infrastructure 8
How is your organization thinking about the changing value streams of DSM given an evolving generation mix? Policy
Vision 2025 : DSM Strategy and Planning Create a dynamic portfolio based on optimized energy/ demand usage and savings. 30,000,000 20,000,000 10,000,000 MN DSM vs 2021 Marginal Energy Profile 40 30 20 10 - - 2016 kwh Savings July 2021 Profile $/MWh
Meeting the Challenge: Three Priorities Invest in Our Future Owned wind and solar generation Advanced grid; transmission to support wind Our workforce Enhance the Customer Experience Easy to do business with Economic development and new services Viewing our work from our customers eyes Keep Bills Low Sustainable reductions Efficient and effective processes Good stewards of our customers dollars 3 We will be the preferred and trusted provider of the energy our customers need.
DSM Transformation Does DSM have to save energy? Load shifting Time-value of savings Strategic electrification What value will new technology unlock? Grid Modernization Technology AMI & supporting technology DRMS (Demand Response Management System) Renewable Forecasting Accuracy Battery Pilots Wireless technology (Smart homes, IoT, Smart Appliances)
What is your philosophy on grid modernization and how does this tie into your organization s grid planning? Customer
Connectivity Please contact Salt River Project s Greg Adams (greg.adams@srpnet.com) regarding his Energy Forum presentation.
What is the role of DSM and the customer in the grid of the future? Customer
Batteries aren t the only way to store energy Companies are moving from demand response to demand flexibility: 16
Storage and demand flexibility allow the grid to cost-effectively balance local renewables EXAMPLE: RESIDENTIAL CUSTOMER IN HAWAII COST-EFFECTIVELY PROVIDING SELF-SUPPLY WITH PV, STORAGE, AND FLEXIBILITY Move load into PV production hours Source: The Economics of Demand Flexibility, RMI 17
The right combination of New technologies can also provide all network stability services Volt/Var Short Circuit Contribution Inertial Response Coal Gas Simple Cycle Synchronous Inverter-Based Demand Response Gas CCGT Nuclear Hydro Synchronous Condenser Wind Centralized PV Distributed PV Centralized Storage Distributed Storage Industrial Small / Aggregated Frequency Support Primary Frequency Response Regulation Load Following Spinning Reserve Short-term availability Long-term availability Black Start No service provision Partial service provision Full service provision Source: Contributions of Supply and Demand Resources to Required Power System Reliability Services, EPRI 2015; RMI Analysis 18
Shawn White Xcel Energy shawn.m.white@xcelenergy.com Greg Adams Salt River Project greg.adams@srpnet.com Mark Dyson Rocky Mountain Institute mdyson@rmi.org Joanne O Neill CLEAResult joanne.oneill@clearesult.com Thank you